Sound Energy to cut expenses by 50% after failed Morocco well test
The cuts will include cutting staff numbers and staff costs, and are already underway
Sound Energy announced that its TE-10 gas discovery at Tendrara in Eastern Morocco did not produce commercial flow rates. During a stimulated well test undertaken with Schlumberger, gas flowed to the surface, but did not achieve a commercial flow rate.
The company announced that with two exploration wells in its three well exploration programme concluded, it has "initiated a structural cost reduction programme aimed at materially reducing the Company's ongoing operating expenditure, including reductions in staff numbers and staff costs."
It expects to reduce its general and administrative expenses by more than 50%.
"Whilst clearly disappointed with the outcome of the recent well test at TE-10, the team and I are encouraged to have delivered gas to surface from another TAGI discovery and remain confident in the potential of our Eastern Morocco basin," said Sound Energy CEO James Parsons. "We have now completed the TAGI element of our current exploration programme and expect to update shortly on our forward looking strategy."
Sound Energy's portfolio in Eastern Morocco includes the Tendrara Production Concession and 24,000sqkm of exploration acreage. The company will make a final investment decision on the TE-5 Horst discovery towards the end of 2019.