Sound Energy gives Tendrara contractor notice to proceed

16th Feb 2022 14:27

(Sharecast News) - Sound Energy announced the issue of a notice to proceed to its contractor to Italfluid Geoenergy on Wednesday, for the Tendrara Concession mLNG Facilities project, onshore Morocco.

The AIM-traded firm said the notice was issued to the contractor by its wholly-owned subsidiary Sound Energy Morocco East (SEMEL) and, following an initial payment of $5m by SEMEL, would oblige the contractor to execute the works for a gas processing and liquefaction facility, as part of the first phase of development of the Tendrara Concession.

Following the issue of the notice, the company said it had also notified Afriquia Gaz that, under the loan note subscription agreement, all necessary undertakings and agreements had been completed and that the project contract was now in full force and effect.

As a result, the loan note subscription was also now in full force and effect, and the group said it intended to immediately draw down part of the funds available under it to meet the initial payment.

"We are delighted to have issued the notice to proceed to Italfluid and to have satisfied all conditions to give effectiveness to both the project contract and loan note subscription agreement, which means that following receipt of the initial payment by Italfluid, the execution phase of our fully funded phase one micro LNG development of the Tendrara Concession will be underway," said executive chairman Graham Lyon.

"This is a key milestone for the company and we look forward to working with our strategic partners, Italfluid and Afriquia Gaz, together with our joint venture partner, ONHYM, in developing the project and delivering gas to the Moroccan market in around two years."

At 1244 GMT, shares in Sound Energy were up 5.5% at 1.9p.