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Sound Energy - Capital Network: Brief Overview.

Written by Lionel Therond

Sound Energy (SOU.LON) is an AIM-listed upstream gas company with a balanced exploration and appraisal portfolio focussed on three strategic assets in onshore Morocco and Italy. The share price has trebled in the past year, following drilling success in the Tendrara licence of eastern Morocco. The work program of the next 12-18 months has the potential to de-risk additional gas resources in Morocco and Italy, providing short-term catalysts for further upside in the share price. However, any disappointing drilling results might leave the stock rather exposed given recent momentum and lack of certified reserves, although we recognise that the optionality in the portfolio would remain substantial.

Sound Energy (SOU.LON) has two other strategic licences. Sidi Moktar in western Morocco and Badile in the Po Valley of northern Italy. Both Sidi Moktar and Badile are targeting onshore gas resources located in proven plays located close to infrastructure. For both licences the company benefits from a strategic partnership with Schlumberger which minimises Sound Energy’s financial exposure to the remaining appraisal risk inherent in these licences and lowers the risk profile of the company.

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