SOUND ENERGY PLC Continuing to Fuel the Energy Transition
Annual Report & Accounts
for the year ended 31 December 2022
Continuing to Fuel the Energy Transition
Sound Energy is an AIM quoted transition energy-focused business, currently playing an important role in developing lower carbon energy solutions
for Morocco.
Strategic and Financial Direction
Key Priorities
- Moving to revenue generation in 2024
- Delivering phased gas developments at Tendrara
- Maturing and delivering creative financial solutions to grow the business
- Further infrastucture-led exploration and appraisal to unlock additional gas resources
- Diversification and portfolio development
- Continue to prudently manage costs and financial resources
Read more in the Financial Review on pages 22 to 23
Operational Highlights
Micro LNG Phase 1
- Construction of LNG storage tank and wellhead maintenance continues at site
- Work has included site preparation, excavation for the tank foundation, laying the concrete base for the tank foundation and several other activities
- Reduced operating cost by 7%
Phase 2
- Commenced potential partner selection process and received non-binding indications of interest from credible and well-funded parties
- Developed relationships with various vendors to conduct Engineering, Procurement, Construction ("EPC") and potentially Operations and Maintenance activities for Phase 2 development
- Continued negotiations with Attijariwafa bank on arrangement of a long-term project senior debt facility
Exploration
-
Approval of the Company's application to enter the optional First Complementary Period under the Grand Tendrara Exploration Permits consisting of 2 years to
1 October 2024 by ONHYM - commitment to drill one well (awaiting final approval from Moroccan Energy and Finance Ministry) - 12-monthextension to the Anoual Exploration Permits initial period to
January 2023 by ONHYM (subject to final approval from Moroccan Energy and Finance Ministry) - 12-monthextension to the Sidi Moktar Exploration Permits initial period to October 2023 (subject to final approval from Moroccan Energy and Finance Ministry)
Net 2C Resources1
283 Bcf
1 2C certified by RPS Energy Consultants Limited 2018, net (75%) recoverable resources, includes non- hydrocarbons, common examples of which are carbon dioxide and nitrogen.
Our investment
proposition summary
- Largest onshore operator in Morocco and focused leadership team with track record of delivering value
- Advanced in monetising Tendrara's significant 377 Bcf1, 2C gross (100%) discovered gas resource through an innovative phased development
- Scalable Phase 1 mLNG FID sanctioned 2022 with First Gas expected within 24 months, unlocking the route to cash flow
- Phase 2 pipeline gas sales, preparation for FID, and thereafter, before first revenue in around 24 months, generating significant value
Read more in Reserves and Resources on pages 14 to 15
- Value upside as trading at a deep discount to Net Asset Value supported by SP Angel equity research valuation
- Assessing a basket of Energy Transition growth opportunities in, and beyond, Morocco
- Multiple near-term catalysts for a re-rating with attractive ESG credentials
View our Corporate website
Get the latest reports and presentations at
www.soundenergyplc.com
1 2C certified by RPS Energy Consultants Limited 2018, gross (100%) recoverable resources, includes non-hydrocarbons, common examples, two of which are carbon dioxide and nitrogen.
Contents
STRATEGIC REPORT
Executive Chairman | 4 |
LNG and the Energy Transition | 6 |
A Compelling Case for Morocco | 7 |
Our Business Partnerships | 8 |
Business Model | 10 |
Partnering Through the Value Chain | 12 |
Reserves and Resources | 14 |
Our Strategy | 16 |
Portfolio Review | 16 |
LNG Project Review | 20 |
Financial Review | 22 |
s172 Statement | 25 |
Sustainable and Responsible Business | 27 |
Principal Risks and Uncertainties | 34 |
GOVERNANCE REPORT
Chairman's Corporate | |
Governance Statement | 38 |
QCA Code Principles | 39 |
Overview | 40 |
The Team | 42 |
Board Activities | 44 |
Shareholder Relations | 38 |
Health, Safety, Security & Environment | |
Committee | 46 |
Audit Committee | 48 |
Nominations and Remuneration Committee | 50 |
Directors' Remuneration Report | 51 |
Directors' Report | 55 |
Statement of Directors' Responsibilities | 57 |
Independent Auditor's Report to the | |
members of Sound Energy plc | 58 |
FINANCIAL STATEMENTS
Consolidated Statement of | |
Comprehensive Income | 65 |
Consolidated Balance Sheet | 66 |
Company Balance Sheet | 67 |
Group and Company Statements | |
of Changes in Equity | 68 |
Group Statement of Cash Flows | 70 |
Note to Statement of Cash Flows | 70 |
Company Statement of Cash Flows | 71 |
Note to Company Statement of | |
Cash Flows | 71 |
Notes to the Financial Statements | 72 |
OTHER INFORMATION
List of Licences and Interests | 99 |
Shareholder Information | 100 |
Sound Energy plc Annual Report for the year ended 31 December 2022 | www.soundenergyplc.com | 01 |
Strategic Report
Group at
a Glance
Where we operate
Morocco and gas: a compelling case
Greater Tendrara
Strategic relevance
Exploration potential in the Triassic TAGI reservoir of 7.52 Tcf gross/5.64 Tcf net (arithmetical sum of mid-case unrisked GIIP) identified in sub-salt concepts, leads and prospects
Ownership
Operator with an effective interest of 75%
ONHYM holds the remaining 25% interest
Partnerships
Long standing partnership with ONHYM. Additional partners currently being considered
Anoual
Strategic relevance
Exploration potential in the Triassic TAGI reservoir of 11.51 Tcf gross/8.63 Tcf net (arithmetical sum of mid-case unrisked GIIP) identified in the sub-salt concepts, leads and prospects
Ownership
Operator with an effective interest of 75%
ONHYM holds the remaining 25% interest
Partnerships
Long standing partnership with ONHYM. Additional partners currently being considered
Sidi Mokhtar
Strategic relevance
Unrisked exploration potential 8.9 Tcf gross/6.7 Tcf net (arithmetical sum of mid-case unrisked GIIP) TCF gross original gas in place. Sound believes the pre-salt plays have been overlooked in the region
Ownership
Operator with an effective interest of 75%
ONHYM holds the remaining 25% interest
Partnerships
Long standing partnership with ONHYM. Additional partners currently being sought
Read more in the Market Drivers on pages 06 to 07
Tahaddart Power | N | |||||||||||||||||
E | A | |||||||||||||||||
N | ||||||||||||||||||
400MW | M | E | D | IT | E | R | R | A | ||||||||||
(DharDoum | (Oued | |||||||||||||||||
El Makhazine | ||||||||||||||||||
4 x 400MW) | 2 x 400MW) | |||||||||||||||||
Oujda | AinBeni | |||||||||||||||||
C | Mathar | |||||||||||||||||
I | ||||||||||||||||||
T | (AlWahda | |||||||||||||||||
N | ||||||||||||||||||
A | Rabat | 4 x 400MW) | 120km | |||||||||||||||
L | ||||||||||||||||||
T | ||||||||||||||||||
A |
Casablanca
Sidi MoktarPermit
Marrakech
O
C
C
O
R
O
M
Anoual Exploration
Permit
Tendrara
Production
Concession
Greater Tendrara
Exploration Permit
Power Stations (coal or dual fuel) Power Stations (gas)
Planned Gas Power Stations (gas)
02 www.soundenergyplc.com
Maghreb - Europe Pipeline
Proposed routing of pipeline to GME
Sound Energy plc Annual Report for the year ended 31 December 2022
Strategic priorities
1 | Unlocking cash flow |
2 | Pipeline to power generation |
3 | Unlocking portfolio potential |
Strategic principles
Opportunity | Partnerships | Scalable growth |
assessment | We nurture | We look to scale |
We carefully | our existing | within our means |
review relevant | partnerships and | with a firm eye |
opportunities in | seek to develop | on costs, but |
the transition fuel | new ones to | understanding |
and renewable | ensure we remain | of the enormous |
energy space, | a competitive | growth potential |
both in Morocco | and shareholder | in our acreage. |
and further afield, | value accretive | |
for projects that | company. | |
could align with | ||
our strategy. |
Our Vision
Fuelling the energy transition through a focused and compelling value proposition, we assess multiple opportunities to develop, diversify and grow our business organically, and inorganically, in Morocco and beyond.
The future
The transition: We are committed to the
1 energy transition and view gas and mLNG as transition fuels.
Portfolio diversification: We see portfolio
2 diversification as a key strategy in reducing risk and optimising shareholder returns.
Sustainable shareholder value: We continue to
3 work towards revenue generation via our Phase 1 and Phase 2 projects.
Strategic Report
What ESG means to Sound Energy
We are aligned to the following UNSDGs
Social
We are committed to making a positive contribution to the communities in which we operate. Our operations will deliver energy, jobs and investment into local communities and the wider economy, and we are committed to delivering this in the most sustainable manner.
Governance
Sound Energy's strong corporate governance culture ensures that all stakeholders are treated with fairness and respect.
Environmental
At Sound Energy, we are environmentally focused and compliant with all international and local operating standards. We have a keen focus on energy conservation, which includes a CO2 recovery project at Tendrara Eastern Morocco. We are also advancing the development of renewable sources (solar and wind) at Tendrara to fully run all operations.
Read more on pages 27 to 33
Sound Energy plc Annual Report for the year ended 31 December 2022 | www.soundenergyplc.com | 03 |
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Sound Energy plc published this content on 15 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2023 08:17:19 UTC.
