PetroMaroc Corporation plc (TSX VENTURE:PMA), an independent oil and gas company focused on Morocco (the "Company" or "PetroMaroc"), is pleased to announce that it has reached a non-binding heads of agreement (the "Heads of Agreement") with a specialist Mediterranean gas company. Sound Energy plc, listed on AIM (AIM:SOU) ("Sound Energy"), under which Sound Energy partners with PetroMaroc on onshore gas licences located in Morocco (collectively, the "Sidi Moktar Licences").
The Heads of Agreement contemplates a transaction (the "Proposed Transaction") pursuant to which Sound Energy would acquire the Sidi Moktar Licenses in consideration for (i) issuance to PetroMaroc of ordinary shares in the capital of Sound Energy with a market value of GBP £3,650,000; and (ii) granting to PetroMaroc of (a) a 10% net profit interest in any future cash flows from the Kechoula structure within the Sidi Moktar Licences; and (ii) a 5% net profit interest in any future cash flows from structures within the Sidi Moktar Licences other than the Kechoula structure.
The Proposed Transaction is subject to a number of conditions precedent, including the consent of PetroMaroc's debentureholders, receipt of the various required regulatory approvals, as applicable and other customary conditions.
D. Campbell Deacon, PetroMaroc's Chief Executive, commented: "This transaction creates a strong partnership between PetroMaroc and Sound Energy whereby both parties are incentivized to develop the Sidi Moktar licence and PetroMaroc is positioned to leverage off Sound Energy's operating capability in country and balance sheet whilst retaining material upside. We look forward to the near-term testing of Kechoula by the joint venture".
Additional details of the Proposed Transaction will be disclosed if and when a definitive agreement is executed by the parties. There can be no assurance that due diligence will be satisfactory, that a definitive agreement will be entered into, that the required third parties' consents and applicable regulatory and shareholder approvals will be obtained and that the Proposed Transaction will be ultimately consummated.