SP Angel, a member of the London Stock Exchange gave Sound Energy a ‘buy’ recommendation, after a considerable increase in activity, placing the business up for ‘multiples’ of upside, according to the British market news website Proactive.
SP Angel’s new price objective is 8.2p per share, indicating a big potential when compared to Sound’s current share price of 2.59p.
“We think Sound’s recent share price strength reflects the market only just waking up to its potential as it enters the execution phase of its Tendrara gas development in Morocco,” SP Angel analyst David Mirzai said.
“Sound currently offers investors an attractive entry point to those seeking exposure to a low-carbon energy play in an emerging setting that benefits from strong gas pricing and domestic demand.”
The gas project at Tendrara in Morocco is moving forward after years of steady progress, according to Graham Lyon, executive chairman of Sound Energy.
The necessity for alternate gas supplies following the Ukraine crisis, as well as Morocco’s own economic needs, has sparked interest in numerous debt financing and other possibilities for the next phase.
Sound Energy previously said that Italfluid, which is carrying out the facilities for Sound Energy Morocco East Limited (SEMEL), a wholly-owned subsidiary of Sound Energy, has made progress on the Tendrara Phase 1 gas project development.
Sound Energy said it is advancing financing discussions for Phase 2 of the project.
The British company said in a statement that it expects to complete preliminary engineering and site preparation in the next six months, as well as begin foundation work.
As for Phase 2, the company says it has been able to significantly advance financing discussions, with strong interest from international service providers and Moroccan banks.
“Following the signing of the binding gas sale and purchase agreement with ONEE in November 2021, we have been able to significantly advance financing discussions and I am pleased that not only do we have strong interest from established international service providers, but also from a number of Moroccan banks, which underscores the potential and strategic importance of this nationally significant Moroccan gas development project,” said Graham Lyon, Sound Energy’s executive chairman.
Tendara is among the basins that have witnessed intensive exploration activity, as part of a partnership between the National Office of Hydrocarbons and Minerals with 25% and SDX Energy with 75%.
The British company stressed that there is a point to collect natural gas, which is the “DRJ” station in the Atlantic Free Zone in Kenitra, and the industrial zone in Kenitra, through the network of natural gas transport pipelines in the region, adding that the marketing of natural gas currently concerns seven customers, equivalent to 150,000 cubic meters per day. from natural gas.
Regarding the exploration and drilling efforts made within the framework of the partnership between the National Office of Hydrocarbons and Minerals and “SDX Energy”, the same source revealed that during the last five years, 22 wells were drilled and natural gas was discovered in 16 of them, and 14 wells were connected to the existing gas pipeline network.
The British “SDX Energy” company announced the discovery of natural gas at a depth of 1158 meters in a field located in the “Lalla Maimouna” area, in the province of Larache.
Before that, Sound Energy announced the discovery of gas in the Tendrara region, near the city of Figuig, in the vicinity of the border with Algeria, on an area of more than 14,500 square kilometers. The discovered stock was estimated at 20 billion cubic meters.
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