British gas company Sound Energy PLC has sold its subsidiary, Sound Energy Morocco East Limited, to Morocco’s largest mining company, Managem, the two companies announced on Friday.
The transaction is worth $45.2 million in total, Sound Energy said, adding that the sale was key to expanding production in Morocco’s eastern gas field, known as Tendrara.
The field is expected to start producing 100 million cubic meters per year starting next year, Managem said in a statement.
Managem plans to increase production to 280 million cubic meters, when the field is connected to an existing gas pipeline that connects Morocco to Spain, Managem added.
“The group is actively seeking other gas assets in Africa,” said Imad Toumi, CEO of Managem, quoted in the press release.
As part of the agreement, Sound Energy will continue to hold a 20% interest in the Tendrara production concession, as well as a 27.5% direct interest in the Grand Tendrara exploration concession and the of Anoual exploration.
In addition to Morocco, Managem, listed in Casablanca, operates in six African countries and produces cobalt, copper, zinc, gold and silver.
Morocco imports most of its gas needs, currently estimated at 1 billion cubic meters (bcm), which is enough to power two small power plants in the northwest and northeast of the country.
Its gas needs are expected to increase to 8 billion cubic meters, according to energy ministry estimates, as the country seeks to reduce its carbon footprint.
