Sound Energy Moroccan Gas Discovery “As Big As Belgium?”

I’ve had a lot of meetings in London over the past 2/3 weeks with numerous sources and city contacts, chasing up news, views and opinion on various company’s. Theatre visits, wine bars, restaurants, emails, phone calls and posh ‘cafés’ have taken their toll on my wallet. Not to mention travel-costs and losing my Oyster card, (some where in the West End) which had £34 quid on it! Never an easy task trying to sort the wheat from the chaf.  One always gets to hear of a lot of ‘personal’ chaf, some of It can be, funny some of it can be down right rotten. As you can read in the last séries of articles. Finally I can now blog on the last company I’ve been researching.

Tendrara Moroccan Gas Discovery.  As big as Belgium?


Sound Energy (LON: SOU) Have had a phenomenal 2016 so far with their share-price smashing through 60p+ from 14p earlier in the year. They’ve come back a tad on profit taking and recent Director sales and Cornerstone Investor warrant conversions. There’s been the usual wailing and gnashing of the teeth among traders and investors who themselves, like me, have taken profit and derisked. Why some think that Directors and Institutional backers shouldn’t do what every man, jack and his wife has been doing (taking profit and derisking) is just one of those odd quirks of the retail investor community. Every one is in it to make money. And making money is exactly what the golden boy of the London AIM, Sound Energy CEO ‘Jimbo’ Parsons has achieved not only for his share holders but for all stakeholders. I believe congratulations are in order not only on the current Tendara success story but on a new addition to the Parsons family.

The sound energy team formed circa 5 yrs ago with a goal to build a Mediterranean oil and gas company. Parsons secured a partnership led strategy with a global oil field services company Schlumberger funding wells and a cornerstone investor securing the register. The company (unlike most on the AIM) are share-holder friendly and transparent in their communications. Some would say that they’ve been deliberately conservative, others think some what innovative in their approach (e.g. webcam) with shareholders which seems to be paying dividends. There’s actual trust in the company from Private Investors, their cash position is very robust.

The first well in Morocco, Tendrara TE-6 (Gas Discovery) has been a storming success and likely the making of the company. It is a commercial find and will get bigger. The whisper is that the Moroccan  gas field could be as big as Belgium! Which would make it a huge connected discovery of Global Scale. That is what is on the cards here. A potential connected gas find the size of Belgium, with multiple TCF {Trillion Cubic Feet} potential. Which is why the share-price is not only defying gravity but the naysayers.  The possibility of a significant gas column within a continuous extended structure. This structure may include and extend beyond the reservoir identified at TE-2, some 30km to the North East. A further well (the Company’s third well – TE-8) will be required at the edge of the potential structure to confirm this and is now being planned for later this year.The Company, together with Schlumberger, is now preparing for the second well at Tendrara (TE-7, located approximately 1.3km from TE-6) using sub-horizontal drilling techniques which are expected to significantly increase the individual well flow rate in a success case.

This is why sentiment is with the company and the market will run with it. Not forgetting that they still have Badile in Italy scheduled for Q4 2016 and the funding of Schlumberger.

The value of Sound Energy shares could be in pounds by the end of 2016. For each TCF of gas the rule of thumb is £1 per share. Sources are indicating that if Morocco turns out to be what the City of London and respected analysts are discussing then it’s a double digit share price in pounds rather than pence. That is to say it could be in excess of £5 to £10+ per share. And here is why. There’s a growing whisper that a global (Shell) oiler operating next door to the Sound Moroccan acreage is taking an interest in them. Indeed “I put it to you” as a well known blogger likes to say, Shell have surrounded the SOU position to the north, west and south in Morocco by picking up the adjacent reconnaissance licence and yes looking for gas.  If Tendara is proved up, even by just two/three TCF then they will be taken over by Shell.  Parsons has got the company positioned for success and almost certainly a target for being bought at some stage. There will be a bidding war, if the Moroccan gas discovery grows in size. My sources are also indicating that ‘Jimbo’ has been approached by a footsie 250 company, Jimbo has turned them down. Why? Share options, which are in the millions,  stand to make him tens of millions of pounds should Morocco come in. Obviously he’s in it to win it.

The second Tendrara well (TE-7) is due to spud later this month. News is imminent on this. While the outpost well Tendrara TE-8 is pencilled in for spud in Q4 2016. Of all the resource companies on the AIM Casino SOU are one of a handful of genuine real deal resource plays, a professional management team with a potential Global Gas Discovery on the cards. They are on the cusp of a journey that could transform them and those who have the nerve should; Hold Your Shares! Big Play this guys!

I’m in!





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7 Responses

  1. NealZ says:

    Malcy’s Blog. Have a read of it he’s called SOU all the way up and he is also saing £1 for every trillion cubic feet of gas.

    Will be happy if its only 3tcf.

    Tendrara is big. Would be ecstatic if its half the size of Belgium.

    Nice write you.



  2. Michelle says:

    A £3 target is achievable. Sound bit of research Dan.

  3. daz says:

    “A £3 target is achievable” You’re jesting bro1 Has to hit way in excess of a fiver. Listen to Malcolm Graham Wood

    Could be over 10 TCF of gas. Over well I’m holding until the next leg up. Sound as a pound.

    • Blaimgame says:

      Looking for £5 minimum here by spring next year. £10 realistic target depending on size of reserves. Will deffo be bought out at some point, most likely by Shell.

  4. chilledwine says:

    Thanks for your endeavours on this piece. May I say what I’ve been saying to some on the chat sites. “Dan Levi is an articulate well rounded blogger. Best is, he’s tea total and a sobering influence on the AIM Cesspit”

  5. SyreetagpGww says:

    Thanks for the read geezer… Good stuff keep it coming.

  6. murphy says:

    Cheers D