Sound Energy Live Discussion

theprior 14 Oct 2018

Fireside chat earlier Thanks for posting, mm. Very interesting. Only read part and Have a busy Sunday morning so will read the rest later. Thanks again TP

moneyman59 14 Oct 2018

Fireside chat earlier FSC pt 3 Question from Ifonlyihad Morning James and the team. James what happened to the top gear investors event that you were going to hold. Are the investors event a thing of the past. James Parsons (Chief Executive) I have one more in the planning stage and believe it may include a Veyron. 11:25 AM Question from DavidLane Thanks for all the time and effort to keep us informed and in the case of the Deep Dive provide an excellent insight into the many ingredients and techniques required to bake the cake. James Parsons (Chief Executive) Thank you 11:25 AM Question from MikeGP As we approach the TE-9 spud,… I would just like to thank all of the team,. including the guys on site for all your efforts and hard work. Fingers ( and everything else) crossed that we get the result we all are hoping for. Best, M James Parsons (Chief Executive) Thank you 11:25 AM Question from Needler You mentioned the Repsol and Shell how are relations with the neighbours. Are you speaking Brian Mitchener (Exploration Director) John Argent has been in contact re our operational learnings. this is normal company policy to share such information 11:27 AM Question from fsheridan84 You described TE8 as the paleozoic play opener. What does this mean in practical terms, what did you learn in TE8 about the Paleozoic that you can apply to the drill campaign and resource estimates? Brian Mitchener (Exploration Director) I think it would be worth you listening to Roger Whites presentation at the deep dive meeting. this is one of a number of sparse data points that we are timing to the seismic to gain a better insight into the Paleozoic prospectivity 11:29 AM Question from Lewis_Suffolk Can I ask about our brokers view on our share price as I remember a target price of 60p and a top price of £2 being mentioned, but do they also have a base price for the existing discovery? Also is this still their view? JJ Traynor (Chief Financial Officer) Sorry but with MIFID 2 regulations we are not allowed to share price targets or analyst research. JJ 11:31 AM Question from BILLFISH Using the other Morrocan pipeline(which delivers gas to Kinatra) which is an 8 inch pipe capable of delivering 24 mmcfd before compression gives 150mmcfd as the approx capacity of a 20 pipe prior to compression. What capacity range are you targetting for our pipeline a) in basic uncompressed configuration and b) with the maximum compression that the pipeline specification can handle? JJ Traynor (Chief Financial Officer) Several options, with different levels of compression, as you say. We think of the 20" line as 240mmscfd 11:31 AM Question from JamesParnips I am pleased that the rig move happened without incident, however, not long ago TE9 was going to spud in July. Brian cautioned it may be early August. Why the extra time before getting the rig rolling? Brian Mitchener (Exploration Director) this delay was entirely related to the additional seismic required to define the A structure and ensure that we had got the risking to an acceptable level pre-drill. this seismic data is difficult to process an dit takes time I am afraid 11:32 AM Question from Charlie James, your trading plan has caused much consternation amongst PIs and it may well have contributed to wiping significant value off the share price. How can you justify selling your so called golden tickets ehen you have been so bullish at presentations and most recently in the preface? Can you see the obvious contradiction between your message and your actions? James Parsons (Chief Executive) Thank you for this question. I acknowledge this is a contentious issue albeit I don’t believe it has a lot to do with our business fundamentals. I have been very public about my reasons for using a trading plan. In essence I have built up a significant equity stake in Sound through a combination of options which have vested, bonuses paid in shares over the years and direct equity purchases. Currently that is 2.6M shares, which I believe is a very healthy equity position for a CEO. I set up in April an equity equalisation plan with the objective of holding 3.1M shares by end March 2019 (although the precise amount will depend on the share price etc). My role as a CEO is to set a strategy for the business (together with the Board obviously) and then execute it and along the way to explain it to shareholders. I am not here to provide investment advice. I am bullish about the business as I believe in what we are doing and that is also consistent with my chosen equity holding. The trading plan is simply the way to lock in my 3.1M chosen equity position in March 2019. The recent RNS was actually an increase in my holding (the sale element was to cover tax etc and I retained the net amount). So - bottom line - when I invest in companies I do look at what equity the leader owns. I think that is a fair question. And I am proud of my equity position both now and my chosen position end March 2019. I basically don’t see the huge contradiction that you refer to (although of course I acknowledge every investor would always prefer I held more shares). 11:32 AM Question from DavidLane Has our marketing to IIs stopped? Do we not have the right profile for their funds? JJ Traynor (Chief Financial Officer) Marketing continues - IIs have about 9% of the shares. Recent meetings in Edinburgh and London, and more planned 11:33 AM Question from ingson How does the Moroccan government view Sound? They have several options on the go such as bad from Algeria, LNG imports and various foreign countries investing. Is Sound considered important they appear to be sanguine about timelines? James Parsons (Chief Executive) I believe we are seen as a partly Moroccan owned, expert and very important upstream player in county. That is exactly the positioning we want. 11:34 AM Question from Mani Drilling to TD of TE9 will take 35-45 days. BM has stated testing will begin 4-6 weeks after TD. I imagine Testing will take about another two weeks. How can it be possible you expect results of TE9 by End-November? Brian Mitchener (Exploration Director) There are different levels of results. end November we will understand if there is gas or not. the testing will determine producible gas and this will be available January 11:34 AM James Parsons (Chief Executive) We’ve had a record number of questions today, and to make sure we can answer as many as possible, we will be closing to any new questions in 5 minutes. 11:35 AM Question from Kempseyman James in the past you have used the word “consolidation” in reference to our Moroccan assets. would you say a little about what you mean buy this concept. Thanks James Parsons (Chief Executive) The consolidation phrase is used when referring to bulking up our presence in country. 11:36 AM Question from GozoMike It took three wells, TE5,6,7 to quantify the gas within TE5 horst. How can we quantify TE9 and TE10 with only one well per structure? Brian Mitchener (Exploration Director) As with the Te-5 horst, the wells determine the range of volume uncertainty. subsequent appraisal on Te-9 and 10 is required in the event of success to continue to narrow the range. 11:37 AM Question from luca1963 Ciao James, what about GSA? why these is this delay? is it related to the increase of oil and natural gas? James Parsons (Chief Executive) Hi, please see answer above Question #1108 11:37 AM Question from Rog How do you determine if an offer should be put to a shareholder vote or not? James Parsons (Chief Executive) I would expect the Board to consider an offer on the basis of price / risk allocation, quality of bidder (in country and counterparts risk) and alternatives. Thats just my perspective. 11:38 AM Question from pocherman one question all want to know is why the continued delay on GSA? Guided July, August, September…surely doesn’t take this long to get a figure even allowing for bureaucracy? It is like tomorrow, it never comes! James Parsons (Chief Executive) Hi pocherman, please see Question #1108 11:38 AM Question from Mick What would it take for Brian to buy some shares and for James to reconsider his Trading Plan and make selective additional purchases in the market…this would give pi’s a tremendous amount of confidence… James Parsons (Chief Executive) Thanks for this question. We are an executive team of an oil and gas business. We are here to execute the strategy the Board (which we form part of) has designed. I stand by my line that 2.6M shares (with a view by end March to increase to 3.1M) is enough for any investor to see I have skin in the game. 11:39 AM Question from George_Prior Brian, thank you to the answer to my prospect inventory Q. Further to that…Does the model your team have built hold either/or potential? In so much that you have stated a world class source and world class seal - so if any of the drills ‘miss’ we quickly discount some existing leads of the basin model but become encouraged by others? I guess my question is based on a potential positive spin from real drill data like TE8 as such any data for a purchaser is valuable assuming source/seal mean HCs are down there somewhere? Brian Mitchener (Exploration Director) In the event of success or failure any interested party would naturally look at the number of similar trap types within a play fairway to provide a valuation of the licence 11:40 AM Question from BILLFISH Is the 60 mmcfd specified in the production concession a daily limit or can the prospective purchaser increase the daily production to a level comensurate with the capacity of a 20 inch pipe? James Parsons (Chief Executive) That will depend on the reservoir performance. The 60mmscfd is our mid case production profile. 11:40 AM Question from MoneyDan You are negotiating a GSA what happens if we hit the black stuff do we need an OSA? JJ Traynor (Chief Financial Officer) Oil is fungible hence we would have to get it to purchasers such as refineries or a tanker port, where we would be payed a benchmark price, sometime adjusted for shipping cost and oil quality. Hence no to your question 11:40 AM Question from MrZiggy Is there any connection between C4 energy and Sidi Moktar? James Parsons (Chief Executive) There is no connection between C4 and any of Sound’s assets. 11:40 AM Question from Cheemap Have you got any plans to hold an investors evening in the midlands (preferably in bham)? It always seems to be either north or south. JJ Traynor (Chief Financial Officer) Thanks, and will look into it 11:41 AM Question from Ciaranp What is the role of rothchilds In the company James Parsons (Chief Executive) Our advisor for corporate defence and marketing the portfolio. 11:41 AM Question from ingson Why do you think it was important for the investors in the cash raise to remain under 3% and so he anonymous? Do you know if they have held onto all those shares or sold? They certainly have not bought more to take them above 3% even though the share price is below the37p they paid. JJ Traynor (Chief Financial Officer) It was their decision, basically. We don’t have insight into their share trades, if there have been any 11:42 AM Question from ingson What is the minimum porosity that Schlumberger can extract gas from rock? Brian Mitchener (Exploration Director) The TAGI ranges from 0.1 to 10mD permeability, which we have no problem stimulating. Unconventional rocks range down to 0.001mD and mechanical stimulation techniques have clearly been applied globally. 11:42 AM Question from simon.w Sidi news releases through 2017/18 confirm a new 8-year Sidi license has been awarded. What was the start date (2017/18?) and what is the end date (2025/26?) of the license – the start and end dates are not detailed in Q3 18 corporate presentation. Sound’s website has the start date of licence as August 09 (the old license). Please advise. Thanks. James Parsons (Chief Executive) Hi Simon, please see earlier response Question #1206 11:42 AM Question from Lewis_Suffolk Can I ask about our brokers view on our share price as I remember a target price of 60p and a top price of £2 being mentioned, but do they also have a base price for the existing discovery? Also is this still their view? JJ Traynor (Chief Financial Officer) See previous answer 11:42 AM Question from ingson You have always said the share price is of little importance only the price at liquidation matters - have you changed your attitude in recent days? James Parsons (Chief Executive) Fundamentally as an executive team we are here to grow the Net Asset Value. That is our primary focus. The share price of course is a function of demand / supply and whilst long term we expect it to track fundamental business value, short term we don’t pay too much attention. Of course it would matter if we were raising equity, which we are not. 11:43 AM Question from GozoMike Sidi Moktar. Have you considered selling SM rather than waiting for a farmin? James Parsons (Chief Executive) Yes but i would rather retain the asset for now. 11:43 AM Question from Trendman Brian, if you were transported back in time to 1965 with just the latest basin model & seismic (no future well information though) where would you drill just one well on our Tendrara licences. The current rig would be available and the aim would be for maximum financial gain? TE2, TE5, SBK1, RR1, TE9, TE10 or somewhere else? Brian Mitchener (Exploration Director) Te-9, I the best defined trap at TAGI and Paleozoic levels and would be the best basin opener 11:43 AM Question from Jcorsellis Have negotiations reached a point where the sale price is contingent on volumes proved? / are you at the HoTs stage? James Parsons (Chief Executive) We cant comment further on this - apologies. 11:43 AM Question from iank Great preface speech James. Thank you for all the hard work by the team and I look forward to the forthcoming drill results. James Parsons (Chief Executive) Thank you 11:46 AM Question from Wanger18 Would also like to say thanks to the team. I remain fully invested and behind that team. My only suggestion would be when giving timescale guidance , maybe go a little longer with initial guidance. If it’s less then you won’t get the usual crowd complaining like they do when it’s longer than originally said. Thanks James Parsons (Chief Executive) Thank you. You are right of course. I think I mentioned the book Catch 22 last FSC also 11:47 AM Question from MikeGP So in terms of valuing the asset,… if we work with the company guidance of £1.50tcf, is the calc based upon the following. A drilled, flow tested find would be valued at circa £1.50 x say 50% recovery x 90% CoS x X/Tcf?… where do we go with that after… is inferred as above but only 10% CoS? JJ Traynor (Chief Financial Officer) Would not mix up exploration risk with discovery economics. A TCF recoverable discovered is the figure to which you apply the £1.50 sensitivity. Pre-drill, you could risk that calculation of course. 11:47 AM Question from KevinRyan Hi James .You say “The other way of looking at this is… if our basin understanding is correct, some or all of these wells will work.” cheeky question ,how confident percentage wise are you of your basin understanding. good luck James Parsons (Chief Executive) Very confident based upon the data that we have. 11:48 AM Question from Edman Thanks guys, some great answers and a straightforward insight to our potential. Here till the end GLA. James Parsons (Chief Executive) Thank you 11:48 AM Question from Seaton JP can you say if you are already in advanced discussions regarding LE with potential purchasers? James Parsons (Chief Executive) I cannot comment on this - my apologies - I know this is frustrating. 11:48 AM Question from MattSherman75 Can any lessons or correlation be drawn from what was learnt in the Paleo at TE-8 and what is being seen in the current seismic mapping off the Paleo? James Parsons (Chief Executive) Hi Matt, please see Question #1194 11:48 AM Question from ingson Will you be able to inform shareholders of any gas find is commercial at the end of November before testing? James Parsons (Chief Executive) End November we should know if we have a success on our hands or not. Testing will provide the flow rate. 11:49 AM Question from Cheemap With the prospect of the LNG project landing, how would that affect SOU in a sale process. By that, I mean would we still be attractive to a buyer? Thanks JJ Traynor (Chief Financial Officer) LNG is mid-2020s at the earliest, and won’t be needed at all if we are as successful as we want to be with the drill bit. Would not see this as linked to the sale 11:49 AM Question from KeeptoFacts James, you just said you are not committed to drilling ANY of the wells. given you expect to spud next week at TE9, this seems rather odd. could something happen before spudding next week to remove the need? thanks. James Parsons (Chief Executive) Question #1289 11:49 AM Question from Drule Why has the number of interested parties in Sidi fallen to just a few? James Parsons (Chief Executive) Hi Drule, please see Question #1252 11:50 AM Question from nonti Brian. Can you give an example of another O&G (in a previous life) project where you encountered unexpected disappointing results but then by using more advanced techniques and methods you drilled again and identified a significant find? JJ Traynor (Chief Financial Officer) Clare oil field in the icy waters off northern Scotland. Discovered in 1977, but not put on stream until 1997, after technology breakthroughs in drilling, seismic and reservoir modelling. BTW this is a 5 billion barrel oil field in the, er, Palaeozoic. JJ 11:26 AM Brian Mitchener (Exploration Director) West of Shetlands has always been a difficult place to explore. Application of AVO analysis unlocked the Tertiary prospectively and seismic identification of fractures allowed better placement of wells to unlock tight rocks eg. Clair 11:50 AM Question from smithd13 Assuming T9 is successful and $8 gsa, can you remind everyone what that’s worth to us. Also however there are a number of analogous areas, how many are there and how does a success of T9 impact their cos? And of course same question for value of them. Thanks JJ Traynor (Chief Financial Officer) 1TCF of recoverable gas for Sound is worth approx £1.50/share 11:50 AM Question from JamesParnips Coming back to “other companies” Othe companies have been quite open about the fact that they have a data room and they have a load of interest. Cove, for example. Why are Sound being tight lipped about it? James Parsons (Chief Executive) I am not planning to negotiate a sale of the asset / company in public. It just isn’t the way to maximise value. 11:51 AM Question from JamesParnips I see that Echo is commissioning a 3D seismic programme in Argentina. Did we consider 3D, especially in a limited area around TE9 location? If 3D is right for Echo, why not us? Brian Mitchener (Exploration Director) we do not need 3D at this stage of the exploration programme to define well locations. once hydrocarbons have been discovered then we would acquire expensive 3D seismic. 11:52 AM Question from MikeGP TE9 follow up… BM,… no data until TD,… do you mean TAGI TD or Paleo? Brian Mitchener (Exploration Director) Palaeo TD and logging 11:53 AM Question from BILLFISH In answer to previous questions you intimated that due to the synthetic arrangement SLB would have no option but to follow SOU when it came the Liquidation Event. Now that the synthetic arrangement has been replaced by a participating interest are SLB still aligned with SOU on the LE or are they pursuing a different end strategy more suited to themselves James Parsons (Chief Executive) SLB will make their own choices regarding staying or selling. With the direct position they can choose what they do independently 11:53 AM Question from SpongeBob You have said the discussions with enigas/consortium have gone well,could you enlighten us more ie exact locations,permissions granted,date of civil work commencement etc.Or will it progress or hold until our drill success or sell. JJ Traynor (Chief Financial Officer) Enagas activities are going well, and we hosted their CEO in Rabat this week. Enagas are currently doing FEED (detailed engineering and costing), which will complete this year. There are various baseline surveys underway on the ground. Construction will not start until the final investment decision, which is expected in mid-19 (by Sound or whoever owns the asset then) 11:54 AM Question from Hawthorn Might we here more on Luca’s baby please? Sarah Dees (Investor Relations) Question #1081 11:54 AM Question from MattSherman75 Are you able to give any insights or numbers on the broader number of prospects in the license please? Has anything new been discovered in the seismic in the TAGI or is it just the Paleo where new structures are emerging? Brian Mitchener (Exploration Director) we are in the process of remapping the TAGI as well as the Palaeozoic. New TAGI prospects are emerging 11:54 AM Question from Blackangel Does the seismic data allow you to see how thick the gas bearing band is a at the drill locations or are the more two dimensional indicatications on a horizontal plane Brian Mitchener (Exploration Director) Right now, no we cannot determine the thickness of the gas bearing zones 11:56 AM Question from Beetleboy JJ please can you explain why you are meeting with IIs? Surely with the company being fully funded, and the LE so close, there is no need to involve any other investors, II or otherwise? JJ Traynor (Chief Financial Officer) The II meetings are to market the shares on the secondary market, and not for a new equity placing. More buyers means a higher share price 11:56 AM Question from Richardlcullen Thanks for all the teams hard work and should we have success and a good LE, will there be a farewell to sound party? Perhaps to move the faithful on to the next project! Sarah Dees (Investor Relations) Thanks Richard! Lets see 11:56 AM Question from landron Good Morning, are we expecting to find the same results of T8 Paleozoic, in the drilling of T9 and T10 Paleozoic. Thanks. Brian Mitchener (Exploration Director) No we are hoping to penetrate different stratigraphic intervals with more potential 11:56 AM Question from MikeGP So,… TE-9 we are looking at spud next week, w/c15 Oct… then say 40days… drill complete, circa…5/6 weeks… late November,… then 4 weeks testing ( hopefully!)… so results just before Xmas. Is that fair? JJ Traynor (Chief Financial Officer) Drilling to TD approx 45 days. If we test, there will be a few weeks gap to rig up for that 11:44 AM Brian Mitchener (Exploration Director) more likely January for test results 11:57 AM Question from fsheridan84 What are current thoughts on Anoual versus Tendrara? Brian Mitchener (Exploration Director) Anoual will be progressively explored following this campaign 11:59 AM Question from MrZiggy What is the point of bringing in more II’s at this stage? JJ Traynor (Chief Financial Officer) see early answer 120 PM Question from MikeGP Would you agree that it would be highly un-likely for any one to make a formal offer without the GSA in place? JJ Traynor (Chief Financial Officer) we think we can achieve the best value with a GSA in place 120 PM Question from ingson You trumpet large new finds at Tendrara in the palaeozoic that dwarf what we know about so far. Why is a new basin model out of the question when it would be larger than the present one and would be a great selling point? Surely worth it? Brian Mitchener (Exploration Director) right now we need to plug in the new information that we will gather from wells and seismic. the results will be the main selling point 121 PM Question from MikeGP In what way does the TE9 Paleo play differ from TE-8? Brian Mitchener (Exploration Director) we expect to drill into the Paleozoic at a deeper stratigraphic level 123 PM James Parsons (Chief Executive) Thank you everybody for joining todays Fireside Chat, and for the questions, we have received. We look forward to seeing many of you in Morocco next week! 126 PM Question from bo42 From Algeria what is the percentage of hydrocarbon in the paleozoic that comes from the very oldest rocks and from the newer rocks Brian Mitchener (Exploration Director) 80% trapped beneath the salt, 20% in Palaeozoic, below the Hercynian Unconformity. But the stats are really dominated by the supergiants, Hassi R’Mel (produces from the Triassic) and Hassi Messaoud (produces from the Cambrian which is Palaeozoic) these hold > 56% of discovered reserves.

moneyman59 14 Oct 2018

Fireside chat earlier FSC pt 2 Question from Bandialos Will the GSA price be in dirhams like for the case of SDX? JJ Traynor (Chief Financial Officer) All the discussions have been for US $ 10:44 AM Question from MattSherman75 Good morning, very much enjoyed your preface James and would like to add a large thank you to the geological team for an excellent insight to the geology, the risks, the analysis under taken and the opportunities at the Deep Dive. James Parsons (Chief Executive) Thank you. We value your support. 10:44 AM Question from fsheridan84 After the drilling campaign, will there be an exercise conducted in-house to attribute value to the similar structures on the license, or would you leave this to third parties? Brian Mitchener (Exploration Director) we would expect to conduct this ourselves 10:44 AM Question from dessaco ok we’ll get the results for te9 next year, right? James Parsons (Chief Executive) End November, ceteris paribus. 10:44 AM Question from Mani Yesterday SOU tweeted that rig-up was 74% complete. Four hours later SOU released an RNS stating Rig-up was complete - how was this possible? James Parsons (Chief Executive) The percentages include the inspection and certification time, thats all. 10:45 AM Question from Jcorsellis What are the chances of Sidi Moktar being farmed-out this year? Brian Mitchener (Exploration Director) sorry it is an ongoing process 10:45 AM Question from Kempseyman Good morning team would you please give us your latest thoughts on selling the assets versus selling the company as a whole James Parsons (Chief Executive) Personally I have a preference for the Company (mainly due to tax leakage with the asset sale) but this will be initially an asset process so that bidders can receive data and value the portfolio. 10:47 AM Question from nacer When can we expect to reach the Tagi in TE9, and get some first interesting updates ? Brian Mitchener (Exploration Director) no data will be available until we have reached TD and logged the well 10:47 AM Question from ingson Any news of oil deposits at Anoual and what scale are you talking about? Brian Mitchener (Exploration Director) the seismic data over this area will be available end October and will be avaluated through November 10:49 AM Question from GozoMike When is the Q4 presentation going to be available on the website James Parsons (Chief Executive) Next week. There are a few minor changes I wanted to make and having been in Morocco this week on important business we haven’t prioritised it. 10:49 AM Question from Queenofwands9 James,more questions about GSA again? I hold a large amount of shares,and couldnt care less if you didn’t finalise the GSA until a week before the LE. Whats the rush? its VERY important. James Parsons (Chief Executive) That is my perspective also. I simply refuse to trade pace for the outcome. It is too important for that. 10:50 AM Question from GozoMike Sidi Moktar. Are Schlumberger interested in a farmin? James Parsons (Chief Executive) No comment. 10:50 AM Question from BILLFISH One of the surprising takeaways from the Deep Dive was the news that you are rowing back from producing CPRs as they are broadly in agreement with your own numbers. Normally a company in agreement with the CPR numbers would be shouting this from the rooftops. Your reluctance to provide the CPRs does not seem to have a positive effect on the share price. Would you reconsider this stance and provide the market with the latest post siesmic info?. JJ Traynor (Chief Financial Officer) Thanks for the feedback. The board has an exploration / development advisor who gives us an independent assessment of the work we do. This is lower cost, and quicker. It doesn’t mean we will never do CPRs again, but we think this works better in the stage we are in. 10:50 AM Question from Wanger18 I know an official guidance of 31% for COS has been stated. What about internal thoughts in the team. Unofficially higher? James Parsons (Chief Executive) I can tell you that our partners have it higher. But I don’t want to start providing different estimates to the RNS’d answer. 10:52 AM Question from Lewis_Suffolk Can I just clarify the £1.50 NAV for every extractable tcf of gas. Is that an extractable tcf of gas is worth £1.50 to sound or is it £1.50 for the tcf and then sound have their 47.5% share so it worth only 71p to sound. JJ Traynor (Chief Financial Officer) 1TCF of recoverable (‘extractable’) gas for Sound is worth approx £1.50/share 10:52 AM Question from Jordan427 Rig up of TE-9 seems to have taken an unusually long time - what were the reasons for this, and do you expect TE-10 rig up to be considerably quicker? I assume the derrick will move in one piece? Thanks Brian Mitchener (Exploration Director) The rig up time is on schedule, it is in nether Saipem or SE’s interest to delay. The rig move from Kobe to Te-9 well site started on 8th September and was completed in 11 days on 19th September. This rig move involved 219 truck loads (in daylight hours for HSSE reasons) with our contractors driving 164,061km. And was completed without incident. The Saipem rig was stacked in Kobe for some 18months and completely dismantled for transit to site. The rig is now being reassembled, refurbished and, as is usual practice, undergoing recertification by a third party engineering company. Services, equipment and consumables are being sourced from across the Schlumberger portfolio (centres in Tunisia, UK, USA, France, Rumania, Algeria,Holland,Colombia,Italy, Canada,and Oman). In the case of the move from Te-7 to Te-8 the rig was not completely dismantled and no recertification was required, and in addition all services and equipment were present at the site. There is no comparison of rig up schedules between these two very different modes of operation. Once the rig has been recertified for operations, we will commence spud, and not before. the rig move and up for Te-10 will take two to three weeks 10:52 AM Question from pablo2 Brian, in best case with TE-9 we drill for 30 odd days but then testing won’t start(rigless) for another 4 to 6 weeks, for how long I don’t know. Will we receive any indication of expectations before testing has started and before testing has finished? Brian Mitchener (Exploration Director) following the petrophysical analysis you will be informed whether we intend to test. It will then be 3 or 4 weeks before we provide an update on the test results 10:55 AM Question from Sound2017 Is there a possibility that the existing gas you have discovered, may be non-commercial as happened with badile JJ Traynor (Chief Financial Officer) You can’t rule that out, but remember we have an anchor project in the basin (Te-5) which is economic in its own right. Smaller discoveries, if that’s where we end up, can be tied into this facility. In fact, larger finds can also be tied into Te-5 and the pipeline, which improves the economic case all round. 10:55 AM Question from Drule why has the number of interested parties in sidi fallen to just a few James Parsons (Chief Executive) We have had a few questions on this. We cant provide running commentary on a live farm out process. We will update the market on the outcome once we know it. I don’t think the Sidi farm out is critical to our strategy right now. It makes sense for the right terms but will I believe be superceeded by events in Eastern Morocco. 10:56 AM Question from Del77 James Earlier you indicated LE may be summer 2019 In January in a RNS you committed to staying with Sound until march 3019. Are you prepared to extend your committment to Sound until LE is completed Many thanks for arranging thus FSC D James Parsons (Chief Executive) We guided in January 2018 I believe that I would be in the post for between 12 to 18 months. I think this dovetails quite nicely. 10:57 AM Question from Jcorsellis IS there AVO over TE-9, TE-10 and will there be over TE-11 once the location is confirmed? Brian Mitchener (Exploration Director) Jack, as I indicated earlier the data has a lot of inherent noise, and this will be the case until we receive the final processed data which will not precede the wells. At present we can identify windows of potential AVO over the Te-9 and 10 structures and we at present collating this information. The Paleozoic is too deep and too tight for any AVO analysis. 10:58 AM Question from JamesParnips Sound have built an impressive organisation, with some of the best people in the industry, great partners and a huge seismic database. It’s like an elephant. But the elphant is balanced on one foot, which is the 31% COS for TE9. Other companies might have done the drilling before building the “elephant” Can you comment on your strategy here, please? James Parsons (Chief Executive) That’s an interesting question. The way I look at it is we need the skills to unlock the basin so a good chunk of my time post TE6/7 was spent building a team with the necessary skills. That includes partners (SLB, Enagas etc). I don’t think we would have come this far without the staff and partners. 10:58 AM Question from Thorough What are you hoping to achieve on the site visit next week? I am not sure it will be worthwhile now as we will essentially looking at a rig in early stages of operation before any results. A bit like the Sidi trip which frankly was not worth the expense given that it became a side show. James Parsons (Chief Executive) Next week’s trip is an opportunity for those investors that wish to see the live operation. It is not intended to provide price sensitive information (which wouldn’t be allowed anyway). As a company we pride ourselves on our transparency with investors. Each investor can make their own decision whether they wish to attend. 110 AM Question from Chewyroach Hi all and thank you for all your hard work. Do global forces, like the Trump effect help our current situation ? I am thinking that Russia, China and other large has users will want our assets. Are you finding interest from all corners of the world and is the Morrocan State helping us in this matter? JJ Traynor (Chief Financial Officer) Good question. I think that Russia is more important in the regional energy mix. They have traditionally been a reliable supplier of about 30% of continental Europe’s gas, even during the Cold War. The last decade has seen Russia using gas supply as a political tool (eg Ukraine). Europe is reacting to that by wanting to diversify it’s gas sources, which has made new projects like Tendrara more appealing to a broader market. I think fundamentally that Tendara will be Morocco gas, and not exported, but the interest from European buyers is certainly there. 110 AM Question from Edman Morning James and the team, hopefully we start drilling next week on TE9, if we hit the sweet spot in both the Tagi and the Paleozoic do you envisage an offer which would render the other 2 drills unnecessary or are we committed to 3 drills no matter what. Thanks James Parsons (Chief Executive) We are not committed to all the wells, or any of the wells. 110 AM Question from Lewis_Suffolk Would just like to say thank you for the preface and I’m wishing the team every success for the 3 wells. I know a little early for Christmas but if the team have been good (do hope they have) would it just be a successful well on the Christmas wish-list or would you like the well to show something in particular? James Parsons (Chief Executive) I’d like to see a commercial flow rate pre stimulation. Thats my definition of success. 111 AM Question from RichDennis I appareciate this has been discussed in great depth - not least by Jason - but how confident are you that you have the right theory regarding the “cementing” at TE-8 and that 9, and 10 are avoiding similar features? Brian Mitchener (Exploration Director) we are confident in our theories related to the core analysis from existing wells. We have modelled these results to the best of our abilities using third party specialists. however if you had the opportunity to walk along the TAGI outcrop in one of our recent trips you will have seen how rapidly the environment of deposition can change. the best we can do is build on this knowledge. 111 AM Question from GozoMike Have we received any, or all,of the money from sale of land at Badile and Italian VAT reclaim? JJ Traynor (Chief Financial Officer) We have receivables for Badile land and VAT totalling some $3million. 111 AM Question from Bandialos Regarding the planned acreage expansion in Morocco, would you look at the hot shale area in the Zag region for unconventional gas? Brian Mitchener (Exploration Director) we have reviewed the Zag region, and like many other companies we believe the area has limited potential 112 AM Question from JamesParnips Can you provide any more info on the Moroccan Consolidation/last Xmas baby? James Parsons (Chief Executive) I was discussing this externally in country this week. We will need to provide guidance through the RNS when and if we get that far. I acknowledge it has been a long wait. 113 AM Question from DavidLane What will be the installed capacity for the CPF & pipeline? JJ Traynor (Chief Financial Officer) CPF will process 66 million cubic feet per day. This will result in 60 million cubic feet per day of sales gas. Pipeline (20") can transport 240 million cubic feet per day. The pipeline is scaled to accommodate further exploration discoveries. 113 AM Question from Boderisimus Jason discussed ground-truthing along the Trarid fault to the north of the NE Lakbir structure. How is this progressing and what would a positive result tell us? Brian Mitchener (Exploration Director) we have conducted all the transects described by Jason. we are now awaiting 21 days before collecting the data for geochemical analysis. this data will tells whether some of the possible indications of leakage on seismic are real or not and whether these data can be used predictively 114 AM Question from JamesParnips You mentioned earlier that Sidi and T. Are. Ore linked than originally intended. Can you explain that a little, please? James Parsons (Chief Executive) As a general statement we have been surprised (positively) by how much there is overlap between the Sidi farm out and interest in Eastern Morocco. I really cant comment further on this. Apologies for that. 114 AM Question from pugmiester1 thanks James and the team you have my full support as the old saying goes eyes on the prize!! James Parsons (Chief Executive) Thank you 114 AM Question from Tier1 do you have enough cash available to drill all 3 wells? JJ Traynor (Chief Financial Officer) Yes. My usual caveat that we reserve the right to access further cash, should that it present itself. Capital raise is not on the table today. 114 AM Question from MoneyDan Could there be any LE restrictions imposed by the UK government. i.e. would we be able to sell the company to Russia? James Parsons (Chief Executive) I am not aware of any such restrictions. For me its about four things: 1. A prospective purchaser who would do the right thing for Morocco 2. Cash 3. Cash, and 4. Cash 116 AM Question from Briank Sorry JJ for the same question. What do mean by recoverable; is it P10 or the mid case or…. JJ Traynor (Chief Financial Officer) the sensitivity works at each “P” outcome. Take your pick! 116 AM Question from Soundingoff If the basin study isn’t going to be updated, will we receive any further information on the Palaeozoic analysis (expected to finish end of month)? Brian Mitchener (Exploration Director) once we have reached a conclusion we can provide some more information. the basin study will not be updated until after this campaign as there is no new information 117 AM Question from MikeGP JJ,… do you feel that the independent assessment carries sufficient weight to re-assure a major,… or is it a case that they will carry out their own assessment come what may? JJ Traynor (Chief Financial Officer) Majors don’t use CPR really for M&A - they have in house gurus for that job 117 AM Question from Jcorsellis Is the internal view on TE-9 CoS >35%? James Parsons (Chief Executive) We are required to stick with the formal CPR guidance so I’d rather not confuse things with different perspectives on risk. You have to remember these %'s are very formulaic. The other way of looking at this is… if our basin understanding is correct, some or all of these wells will work. 117 AM Question from simon.w If a Sidi (funding) partner is not secured: what is the estimated cost of the initial phase mandatory work programme (total US$) and what is the US$ deposit/guarantee placed in favour of onhym, which will be lost if the initial work programme is not completed? James Parsons (Chief Executive) The estimated cost for the initial phase in the permit is USD$3m. The deposit/guarantee in place amounts to USD$750k together with a parent company guarantee of the same amount. 118 AM Question from Drule Why has the parties looking at sidi fallen from several to just a few? Brian Mitchener (Exploration Director) this is a normal process to focus on the most interested parties 118 AM Question from NickHarris Excuse my ignorence but if we hit Gas at the first target depth and then carry on to second target will this cause any problems with the initial find ? Great work btw JJ Traynor (Chief Financial Officer) Luxury problem. We will run casing over a shallower discovery to protect it, and then drill deeper. 118 AM Question from Hodgieman Hi, great work everyone, really excited for the next 6 months! However, should all 3 wells fail what would be the plan? Would there still be a LE? James Parsons (Chief Executive) Our strategy to drill and sell isn’t dependant on the well outcomes. Obviously the price is very different but the strategy remains. We will of course, as a Board, keep this constantly under review. 119 AM Question from soundsgreat Hi guys, can you confirm that Repsol & Shell representatives attended the Deep Drill presentation and if so does this suggest ongoing collaborative analysis of the geology? Brian Mitchener (Exploration Director) Nobody from Shell or Repsol was present at the deep dive. we have however discussed there upcoming seismic plans and the issues we came across re logistics 11:12 AM Question from ingson Everything sounds wonderful at the moment but what is your biggest fear for the next six months? James Parsons (Chief Executive) Call me old fashioned but what I really want to avoid is that we have operational problems with the wells. They are simple wells (much less complex than our semi horizontal TE7 well) and we have an excellent team but I demand from my team an on time and on budget performance. 11:12 AM Question from Gibbo Good morning, have we ever received an offer for the company that has been rejected by the board James Parsons (Chief Executive) No comment 11:12 AM Question from bens427 Good morning JJ, how can you put a value on a TCF without the important figure of the GSA. Is this not a driving factor. JJ Traynor (Chief Financial Officer) Thanks for the question. The £1.50/share/TCF sensitivity has quite a few assumptions baked into it - for example an $8 gas price. A $1 change in gas price has a 20% impact on the NAV, as does a 1 year delay in first gas 11:13 AM Question from dgfletch Hi James You commented to me in Chester that the Chinese may be potential buyers and mischievously mentioned that you had visited the far east frequently at that time. Any further comments. The use of emoji will suffice. James Parsons (Chief Executive) It is true that some of my travel in recent months has been further afield with a very specific agenda. 11:14 AM Question from Poolie Good morning James and team,on a lighter note you mention in your speech about ‘discovering what’s at the bottom of this rabbit hole,well I have 3 gorgeous ferrets willing to help !!!With the team to the end. JJ Traynor (Chief Financial Officer) Great! Please send a pic! 11:15 AM Question from Tommyt91 How often are you engaging with ONEE re: the GSA? Is it simply the $ value you’re negotiating with them, or are there other factors at play? James Parsons (Chief Executive) The main aspects are price and volume. The nature of the negotiation is weekly and the Minister is involved. 11:15 AM Question from ingson Was the palaeozoic charged with gas when you drilled into it at TE8. Brian Mitchener (Exploration Director) some gas was encountered while drilling through the upper part of the Paleozoic, but the sands were tight and the state of the hole prevented a full analysis 11:15 AM Question from Mick Should the next three wells be dusters, how will Sound move forward. What’s the worst case scenario and What contingency plans are in place? Do these options include a further equity raise at say a failure of say the first two drills? JJ Traynor (Chief Financial Officer) Mick, we have funds in place for this well campaign, with my normal caveat that we retain the right to raise capital should it present itself. 11:16 AM Question from Cheemap When we drilled te8, we said something along the lines of ‘party in the paleo’… what did we learn at that point apart from that we had the full sequence on sands stones which existed ( I think) Brian Mitchener (Exploration Director) we learnt that there were potential reservoirs in the upper section of the Paleozoic 11:17 AM Question from Blackangel can you explain the rationale behind Marco pulling out as a corner stone investor when the potential gains here are so huge? James Parsons (Chief Executive) CIP distributed their shares to the ultimate shareholders. I didn’t interpret this as them pulling our as a cornerstone investor. Marco remains an NED and a key thought partner for me in securing the right outcome for us all. I am not aware of Marco or any of his investors selling but of course the Company cant be sure of this as it won’t trigger TR1s. It wouldn’t be that logical for them to sell at these levels when they held previously tbh. 11:18 AM Question from Tucknroll James in an earlier FSC you referred to a Bulletin Board thought. I have looked at some of these and see you and Sarah quoted verbatim. In the interest of transparency could any responses to emails etc be made public vis an Investor page on our website, please? James Parsons (Chief Executive) Thanks. We will give this some thought. 11:19 AM Question from Simonperkins When do we expect to receive the full details linked to the GSA.? Within the next 2 weeks or longer? JJ Traynor (Chief Financial Officer) No detailed timetable to share, I’m afraid. Suffice it to say we are pushing hard on this 11:19 AM Question from Beetleboy James, Brian, and JJ, thanks for this today. It’s been very reassuring, and also informative. Like all other LTHs, I’ll read between the lines of what you can’t say, and hold on to my golden tickets! JJ Traynor (Chief Financial Officer) Thanks much, and looking forward to the well results! 11:20 AM Question from Jordan427 Do you believe a LE involving multiple majors to be a possibility if Tendrara is as large as we hope? Perhaps some kind of joint venture consisting of 2 or more majors? Or do you expect 1 company will want it on their own? JJ Traynor (Chief Financial Officer) Open to ideas of course. I would expect this to be a single company transaction 11:20 AM Question from tanfinch Hi James Great speech this morning Will the IPO for C4 occur after the Sound LE / James Parsons (Chief Executive) Right now I am rather focused on our wells in Morocco. C4 is for later. 11:21 AM Question from ajbjasus Any chance of a “worst case scenario” on sale price should we struggle on the next 3 wells - ie a price for the existing discovery plus potential ? JJ Traynor (Chief Financial Officer) That is always an option, but we would all be happier with some new discoveries! 11:22 AM Question from KeeptoFacts James, you just said you are not committed to drilling ANY of the wells. given you expect to spud next week at TE9, this seems rather odd. could something happen before spudding next week to remove the need? thanks James Parsons (Chief Executive) Apologies if this generated confusion. Let me put it this way - we are planning three wells back to back and we start drilling next week. I am not ruling out however that we will sell the portfolio before the end of the third well, or indeed anytime. 11:23 AM Question from Soundingoff question from daveyboy71: There’s an article on the Scotforth website (22-2-18) regarding DHM of the tendrara licence. Was this commissioned by Sound or is this done by a third party? Also the on going ground truthing taking place at te9 and 10 locations- if successful, as in with results of te9 drill, will this have any bearing on te10 (although ground works have started) and 11 location? Brian Mitchener (Exploration Director) this was not commissioned by SE and we cannot comment not the merits of this work. as I indicated earlier the transects to detect potential seepage have been completed . after a further 21 days we will retrieve these data for geochemical analysis. these data will then be used to determine whether we can be predictive about the potential of the prospect invertory. 11:23 AM Question from Blackangel putting drill results to onside, do you think that once we have the GSA signed the Company will be valued more precisely by the market James Parsons (Chief Executive) I believe the GSA is a critical factor for our valuation so yes there should be more line of sight for investors once the GSA is agreed. I cant really comment on the market (the rules don’t allow us to). Apologies. 11:24 AM

moneyman59 14 Oct 2018

Fireside chat earlier Q&A. FSC pt 1 Thank you for listening to my preface message this morning, this is an exciting time for us all! For those who have not been able to listen, please visit www.soundenergy.com. Brian and JJ join me this morning, we look forward to your questions! 9:55 AM Question from Dodge Is a the chance of success for TAGI TE10 and Paleozoic TE10 separately available Brian Mitchener (Exploration Director) Similar to Te-9, 31% for the TAGI and higher risk for the Paleozoic 9:56 AM Question from Sound When will the 3 wells be completed by.? Thanks James Parsons (Chief Executive) Good morning ! We expect to have completed all three wells by February / March, obviously dependant on the need for testing in each case. 9:57 AM Question from pablo2 Have we got a Spud date for next week yet? Brian Mitchener (Exploration Director) Depending on the certification checks on the rig, we expect to spud next week 103 AM Question from Jcorsellis What date will TE-9 be spudded? Brian Mitchener (Exploration Director) Depending on the certification checks on the rig, we expect to spud next week 103 AM Question from ajbjasus Hi James - you referred to 10 bagger today. From which entry point would you base tis ? (!!!) James Parsons (Chief Executive) In the speech this morning specifically referred to an 11x on resources discovered in the upside case if TE9 and 10 came in. I think the best way of providing some perspective to your question is… we have huge running room / upside potential in Eastern Morocco (34 Tcf!). We have made one discovery which is material but small relative to the running room. Our next three wells are intended to prove both more volumes and the basin model in general - hence increase the value we get for the exploration potential. So - bottom line in the next six months we hope to have more discoveries (which will receive “full value” for) and be able to demonstrate externally line of sight on the exploration value. This, we believe, is how to maximise value. I don’t think the share price has anything really to do with the sale price, which will de driven by an asset valuation. 104 AM Question from Steve1232 What’s the expected dril time for TE9 Brian Mitchener (Exploration Director) 35 to 45 days 104 AM Question from pugmiester1 would it be possible to sell the business now and share risk reward . JJ Traynor (Chief Financial Officer) Thanks for the question. Yes in theory it is possible to sell the business ahead of the well results. Ahead of the well results, any buyer would want to apply a discount to the success case value, and we would want to sell for the full value. There are examples of company sales where there are follow on payments, depending on post closure events. 104 AM Question from Beetleboy Is it fair to say that what Luca was working on has now been abandoned? James Parsons (Chief Executive) No that is not correct. In fact this week in Morocco we had external meetings on this. 105 AM Question from A1defiant Are we restricted to the sidi farm out due to not wishing to sell or partner with a potential competition for the buyer for Eastern Morocco James Parsons (Chief Executive) They are perhaps more linked that we had originally intended to be honest. But no it is not a restriction. 105 AM Question from Dazzgedd Great speech earlier James, the story and passion remain the same, at the deep dive we were told TE10 will start during TE9’s drilling, will TE11 overlap TE10 as well Brian Mitchener (Exploration Director) That is not correct, the wells will be drilled back to back. Any testing will be conducted rimless and will then overlap with the drilling operations 106 AM Question from dessaco when will we have the results for te9? end of november? James Parsons (Chief Executive) Yes, broadly. 106 AM Question from Modernlife Will the Veyron zone likely be the target for the TE11 drill James Parsons (Chief Executive) Very possibly. It is one of multiple candidates. 107 AM Question from Richard Drill to depth at TE9 is 30-45 days, who long after that will the testing take? Brian Mitchener (Exploration Director) The testing will most likely begin 4 to 6 weeks after the well has reached TD 107 AM Question from goliver With the volatility in the share price, why was the RNS left until yesterday? JJ Traynor (Chief Financial Officer) Hi Goliver. You are right that there is a lot of volatility in the market - us and most other stocks. This is at least in part due to macro factors such as interest rate changes, and news around trade wars etc. We had planned to make the RNS today, but felt that given the substantial share price moves this week, that we would move this up to yesterday. 107 AM Question from ingson Since the deep dive has your knowledge of the palaeozoic moved on with further seismic interpretation? Brian Mitchener (Exploration Director) Correct Roger White has continued with his seismic mapping to build a better picture of the potential 108 AM Question from Bobsnest I am on the Thursday site visit, will you have spudded by then? JJ Traynor (Chief Financial Officer) Hi Bob. I will see you there next Thursday. Spud expected next week 109 AM Question from MikeGP The basin model was amended following receipt of CPR 1 in June; given that the company is no longer going to instruct CPR’s 2 & 3….are you intending to update the Basin model further? And if so, when is that likely to be issued? Brian Mitchener (Exploration Director) There will be no further update on the basin model until we have the well results 10:10 AM Question from MikeGP LE event: If the company was unable to reach an agreement on an LE., at what point in the current programme will we need to commit to FID and when would you anticipate first gas sales revenue? Assuming we do at some point receive an offer acceptable to the Board, ie the LE event. What is the process and potential/minimum statutory timescale? ie an offer letter issued,… EGM,… vote,… then legals etc., James Parsons (Chief Executive) The process and rules around a sale are very different if it is an asset sale versus a company sale. We intend for FID to early / mid 2019. The sequence here is close the GSA, finish FEED, sign the BOT and then we will be ready to for FID. My aspiration is to get everything ready for FID and then sell with it all nicely packaged. As a sidenote - we have just btw hit 1,000 participants in the FSC! 10:10 AM Question from bodazapher Will there be an rns at each casing point with indications of gas? JJ Traynor (Chief Financial Officer) RNS at each casing point. You typically don’t see gas at casing points. Gas indications should come when we enter the reservoir section, and we will update you on that as appropriate, depending on what we see. 10:12 AM Question from Seaton Why has the rig at TE 9 taken so long to be erected and why has the timeline stretched out so far? Brian Mitchener (Exploration Director) The rig up time is on schedule, it is in nether Saipem or SE’s interest to delay. The rig move from Kobe to Te-9 well site started on 8th September and was completed in 11 days on 19th September. This rig move involved 219 truck loads (in daylight hours for HSSE reasons) with our contractors driving 164,061km. And was completed without incident. The Saipem rig was stacked in Kobe for some 18months and completely dismantled for transit to site. The rig is now being reassembled, refurbished and, as is usual practice, undergoing recertification by a third party engineering company. Services, equipment and consumables are being sourced from across the Schlumberger portfolio (centres in Tunisia, UK, USA, France, Rumania, Algeria,Holland,Colombia,Italy, Canada,and Oman). In the case of the move from Te-7 to Te-8 the rig was not completely dismantled and no recertification was required, and in addition all services and equipment were present at the site. There is no comparison of rig up schedules between these two very different modes of operation. Once the rig has been recertified for operations, we will commence spud, and not before. 10:12 AM Question from Jcorsellis If the TE9 result will be known pre-Christmas, when will the TE10 result be known? JJ Traynor (Chief Financial Officer) Jan-Feb is our latest estimate 10:13 AM Question from MikeGP GSA Whilst the time line that was muted in the past has been and gone, it’s clear that negotiations are on-going. Where are we in the process and what is the current thinking in respect of time scale? Are there any milestones, technical/legal or otherwise, which need to be addressed before we could sign, for instance? If so what are they and are they within our or a third parties control? Has the rise in oil price helped or hindered our GSA negotiations and is it possible that we might now exceed the figures quoted by the company in previous guidance? Is it likely that the value of the GSA be linked to (i) the price of oil and (ii) the volume of gas supplied? James Parsons (Chief Executive) Thank you for the GSA question. Let me just start by stating that the GSA is one of the most important negotiations we have ever done. It’s impact on our valuation / NAV now and for volumes as yet undiscovered is critical. It’s impact on a future sale is huge. As we said in yesterday’s RNS we had Minister meetings on this earlier this week. I would describe it as “coming together nicely”. Yes the fact commodity prices have strengthened helps us. I acknowledge that we tried to predict the timelines and may have been too aggressive. But I think you will forgive us when you see the result. Let’s see ! 10:13 AM Question from MikeGP TE-10 There has been some frustration at the perceived length of time that it has taken to mobile and set-up the rig at TE-9. In order to avoid that with TE-10,… could you please comment on the anticipated schedule for TE-10… ie mobilisation of rig,… rig set-up, certification period etc. Brian Mitchener (Exploration Director) The rig move and rig. up is expected to take two to three weeks. no further certification required 10:14 AM Question from fsjamescampbell Are there any intricate / differences in geology, over the planned drill sites TE9, 10 & 11 that are positive when compared to the TE5 horst now that seismic data has been digested. Brian Mitchener (Exploration Director) If you mean at surface? we are gathering seepage information over each location to determine whether it is possible to predict success. if you mean in the subsurface the geology is very similar 10:16 AM Question from Blackangel Morning James and team.Are you planning to tweet regular drill depth progress or will it just be RNS notifications of successful casings? Brian Mitchener (Exploration Director) RNS notifications of casing points reached only 10:17 AM Question from Mick Hi James, hope you are OK and sanguine about the market’s! can you include any comment about OGIF and now the lock in has expired on their 270M shares are they likely to hold the lot until the LE or are they partially derisking? It’s a factor in me deciding how much to hold/ re-invest in next few months, Good wishes today, Thanks, Mick James Parsons (Chief Executive) It is difficult for us to provide comment on behalf of a shareholder - not least as we don’t have unique insight into their intentions. Of course every shareholder has the right to do what they want with their shares. What I would say is being such a significant shareholder there are TR1 requirements so material trades should be fairly obvious to us all and you can make your judgements based on that. What I can share is the OGIF/AFG (the management company) have been very supportive and helpful with a series of things in country - BOT and GSA included. Personally I consider Mr Mohammed Benslimane a friend as well as a shareholder. 10:17 AM Question from Peter_T How come rig up took so long on TE-9, was there a problem Brian Mitchener (Exploration Director) As per my previous answer - The rig up time is on schedule, it is in nether Saipem or SE’s interest to delay. The rig move from Kobe to Te-9 well site started on 8th September and was completed in 11 days on 19th September. This rig move involved 219 truck loads (in daylight hours for HSSE reasons) with our contractors driving 164,061km. And was completed without incident. The Saipem rig was stacked in Kobe for some 18months and completely dismantled for transit to site. The rig is now being reassembled, refurbished and, as is usual practice, undergoing recertification by a third party engineering company. Services, equipment and consumables are being sourced from across the Schlumberger portfolio (centres in Tunisia, UK, USA, France, Rumania, Algeria,Holland,Colombia,Italy, Canada,and Oman). In the case of the move from Te-7 to Te-8 the rig was not completely dismantled and no recertification was required, and in addition all services and equipment were present at the site. There is no comparison of rig up schedules between these two very different modes of operation. Once the rig has been recertified for operations, we will commence spud, and not before. 10:18 AM Question from peterbwilliams53 Hi, great opening speech James. Bravo! What’s with the delays to the GSA? Anything sinister in the hold-up? James Parsons (Chief Executive) Quick answer - nothing sinister. I have address the GSA question more broadly here: Question #1108 10:18 AM Question from Beetleboy James and team, please can you explain how the GSA gives an indication of the future £/TCF rate, if it is only selling gas back to Morrocco? Surely this is vested interest? JJ Traynor (Chief Financial Officer) Thanks for the question. The GSA we are negotiating is with the Morocco power company ONEE. They would pay the production joint venture (Sound, Schlumberger, ONHYM) this gas price. This is a commercial transaction, and we would argue that it is in Morocco’s interest to have a domestic source of gas supply, rather than imports such as Algeria gas currently, and potentially LNG in the future. For the country, this is all about balance of payments, and jobs. 10:18 AM Question from Jag11 Hi, do you foresee the ‘rugosity’ encountered in TE8 to be a widespread problem in other Tendrara wells? Brian Mitchener (Exploration Director) We have discussed this at length and we are using a different mud which will not react with the formation and should result in a very straight borehole 10:20 AM Question from Neilgeorgeson From the data collected so far does the paleo have more potential than the tagi? With thanks James Parsons (Chief Executive) Yes - significantly more. It would be the gamechanger for the basin. It is also we believe what Shell and Repsol are changing to the North. But the Paleo has also more risk as it is previously basically undrilled. 10:20 AM Question from Mthane Prior to the LE will there be an announcement that the Company has opened a data room to allow potential purchasers to gain access to all relevant information ? JJ Traynor (Chief Financial Officer) Mthane, we expect this to be a closed door process. 10:20 AM Question from A1defiant How many prospects are there for TE-11? (I know you’re still to receive the final processed data) but am guessing you’ve got a few numbers from preliminary reports? Brian Mitchener (Exploration Director) we have three or four options at the moment which we are high grading 10:20 AM Question from Rog Are you still expecting LE within next 6 months or so? James Parsons (Chief Executive) I am hoping by summer 2019. The basic idea is drill three wells then market the portfolio. Of course it could be earlier… 10:21 AM Question from NickHarris Great speech, thank you. I take it the rig is now fully oprational ? Brian Mitchener (Exploration Director) Very close now and we expect to spud next week 10:21 AM Question from Wasp Good morning. Gasprom have announced that they are looking to invest in the infrastructure of Morrocan gas. Do you know if there has been any interest in becoming a producer in Morroco? JJ Traynor (Chief Financial Officer) We haven’t heard that Gazprom want to invest in Morocco upstream. Remember this is a Russia state entity that make a lot of statements about interest etc. There is a very old plan (decades) for a Nigeria to Europe gas pipeline, that Gazprom are interested in, but it’s never got off the ground, to be honest. 10:22 AM Question from Blackangel Are any members of the sound team involved in negotiations surrounding construction of a gas terminal in Morocco. How entwined are with with the Moroccan government in relation to their energy supply and its future? JJ Traynor (Chief Financial Officer) We’re not involved in Morocco’s ideas on LNG imports. Tend to think that domestic gas can meet their energy needs! 10:23 AM Question from Jcorsellis Given your knowledge of the industry, is it your belief that Shell/Repsol are going through the motions on their Licence(s) whilst awaiting the result of the three drill schedule, or do you interpret their actions/progress a signalling that they are taking the Palaeozoic potential very seriously? James Parsons (Chief Executive) My take is both - they are taking the Palo very seriously and they are watching. 10:24 AM Question from George_Prior In what estimated timescale can the prospect inventory incorporate data from te9/10/11 drilling Tagi/Paleozoic horizons be they failures, modest successes or gangbusters. That question is based on getting some expectations pre b2b drilling so when we get to wherever we end up whilst on that journey we have some idea of where we are on the timeline. In a summer interview with MGW Brian set a conservative tone to the potential upside because more data is required particularly from the Paleozoic. Given the hard yards he and the team have gained building the 4D model from areal grad, seismic, source rock, basins and mapping over time is that model capable of quickly ingesting drill data and producing or disqualifying prospects? Brian Mitchener (Exploration Director) one reason for drilling multiple play types is to allow us to understand the dependency with the greater portfolio. therefore as you point out, we will be able to gauge the quality of the prospect inventory very quickly following the well results. if required the basin model will be updated after the well results, but the timeframe depends on the upgrades required 10:24 AM Question from Wanger18 You say March for drills completed! Is there any guarantee that we won’t have 3 months delay on top of that like TE9. Or is it now a case of the ball is rolling and barring anything out the ordinary the timescales should be fairly accurate? James Parsons (Chief Executive) These are live operations so there can always be delays but to be honest these are simple vertical wells and we have done a few in this geology now so I am not expecting significant delays. If you do see delays it frankly is more likely to be me slowing things down on purpose for other reasons. 10:25 AM Question from BILLFISH The production concession lasts for 10 years. To exoloit this concession a potential purchaser has to sign up to a 15 year Hire Purchase agreement to use the infrastructure facility. What is the rational behind this asymetry JJ Traynor (Chief Financial Officer) Production concession is for 25 years from 3/9/2018, with a potential extension of another 10 years. The infrastructure agreement (BOOT) with Enagas is for 15 years. They should pay for the development, and then own the infrastructure they build for 15 years, and after that pass it back to Sound. 10:25 AM Question from Bobsnest What is C4 Energy Limited James Parsons (Chief Executive) It is a private company set up by Marco Fumagalli and myself for life after Sound. It will be IPO’d. 10:26 AM Question from ingson If there is no corporate or operational reason for the share price fall why do you think it has fallen? JJ Traynor (Chief Financial Officer) We don’t have a lot of visibility on why our shares move up and down on a daily basis. I think that there has been a general market sell off due to the increase in Fed rates and US-China trade spats, and some profit taking in commodity sectors. We are not immune to that. In addition, it would be normal for investors to take active positions in Sound as we are entering a transformational drilling campaign 10:28 AM Question from BILLFISH James and the administrator are the only two people who know what is in the trading plan. James to what extent did this knowlwdge inform your decision to hold the Deep Dive event on the same day that the administrator exercised your instructions JJ Traynor (Chief Financial Officer) Billfish. I don’t buy this. James’ options timing was set up 3 years ago. His trades on the Deep Dive date were an option vest with sale to pay trading costs, tax, national insurance, and James’ shareholding increased as a result of this option vest. Trading plan was set in April. The Deep Dive date was set by the availability of the venue. The trading plan details are know by the board, not just James and the administrator. 10:33 AM Question from g.bramati Good morning, what’s happening to the share price? There’s a lot of volatility James Parsons (Chief Executive) We cant provide commentary on the share price but I do note global equities meltdown these last few days. I’m honestly not sure I buy the theory that the global context affects our stock materially. I’m much more interested in our industrial strategy than the share price. Having said that I will also be honest that I do feel the pain. For me from three perspectives - firstly as an investor, secondly as a professional who has spent 7 years building this business and thirdly (as you may be able to imagine) from the often direct feedback from investors (that third angle can be quite aggressive at times but I don’t take it personally). 10:33 AM Question from Jcorsellis Subsequent to drilling TE8 the Company obtained AVO coverage of the TE8 location. The AVO result was very telling. Have the Company obtained AVO over the TE9,TE10, and potential TE11 locations? Brian Mitchener (Exploration Director) Modelling suggests that from our data in Te-6 there is evidence that the more porous sandstones are suggesting the presence of gas which is evident on seismic in a small area around Te5,6 and 7. The seismic data at present on the 3D is still too noisy to extrapolate away from these wells onto the Te-5 Horst. Equally it is difficult to extrapolate on the 2D seismic over the Te-9 and 10 locations. we see windows where there appears to be AVO anomalies, and we continue to build this information right now. 10:34 AM Question from Jcorsellis With numerous other candidates looking promising, might we drill a 4th well? James Parsons (Chief Executive) Never say never but it is not currently the plan. We certainly have enough candidate prospects - I just don’t think we will need to. 10:34 AM Question from Seaton At the Norwich event I asked about the timing of the GSA. You said July, early August at the latest (the figure is more important than the date) However its now October so why such a delay? JJ Traynor (Chief Financial Officer) Thanks for the question. In the end, the GSA negotiations are with government bodies - we can’t control that timing, much as we’d like to. We are pushing hard on this, rest assured, including meetings with the minister in Rabat this week 10:34 AM Question from Jcorsellis Are there any changes to the NAV per Tcf? Or does the £1.50 guidance hold true for now? JJ Traynor (Chief Financial Officer) Guidance is not changed 10:35 AM Question from Boderisimus Has the Eastern Morocco New Petroleum agreement been approved by the Energy and Finance ministries in order that TE-9 will count as one of the two exploration wells we are committed to? James Parsons (Chief Executive) Apparently the Minster will sign very shortly (I was in Morocco this week and personally checked that). But either way the well has been confirmed to count as a commitment well. So this is not an issue. 10:35 AM Question from simon.w Sidi news releases through 2017/18 confirm a new 8-year Sidi license has been awarded. What was the start date (2017/18?) and what is the end date (2025/26?) of the license – the start and end dates are not detailed in Q3 18 corporate presentation. Sound’s website has the start date of licence as August 09 (the old license). Please advise. Thanks. Sarah Dees (Investor Relations) The Sidi Moktar 8 years exploration permit has been awarded on 9th April 2018 so will expire on 9th April 2025. Will ensure all is updated and thanks for the question. 10:35 AM Question from pugmiester1 is the gas agreement getting very close James Parsons (Chief Executive) Yes 10:36 AM Question from Dodge What is the timeline for sorting the financing on the existing discovery (fallback plan)? JJ Traynor (Chief Financial Officer) This is making good progress. The Enagas consortium should bring $186 million (100% basis) of this finance, and we expect to conclude that in the first half of 2019 10:37 AM Question from DavidLane Are 3 wells enough for appraisal? If TE9, 10 & 11 are successful could we keep drilling up other opportunities James Parsons (Chief Executive) With TE9, 10 and 11 we are appraising. We are exploring new structures. There are many more wells we could drill - both exploration and appraisal - but we have decided to drill three more exploration wells as we believe these will demonstrate the potential of the business. 10:37 AM Question from RMsully Hi guys, do you you see us getting to the end of all 3 drills or is there a high potential that, depending on results, we get taken out beforehand? James Parsons (Chief Executive) Let’s find out together. I do have a view but the rules don’t really enable me to comment on this. 10:37 AM Question from andy9196 how are the GSA discussions going on ? With the recent rise James Parsons (Chief Executive) Question #1108 10:38 AM Question from Cheemap What kind of measures have we taken to mitigate the risk for the up coming wells which we encountered at te8? Are the bod confident what we’ve left no stone unturned in order to achieve success for te9/10 besides the usual risks which are associated? Thanks Brian Mitchener (Exploration Director) I think as evidenced by the deep dive we have conducted all possible technical work to mitigate subsurface risk. We cannot mitigate the Te-8 reservoir result completely and that is reflected in the risking of Te-9 and 10. we believe we are in a more high energy part of the fluvial TAGI system and right now that is the best we can do. 10:38 AM Question from Jcorsellis What is the difference between Schlumberger’s previous synthetic interest and the interest they now have and should we read any significance into the decision to convert? JJ Traynor (Chief Financial Officer) On the ground, in the joint team and the operations, there isn’t really a difference. From a financing / legal perspective, they will become a joint owner of the licence, rather than being simply entitled to a share of the profits from production. We think the decision to convert (which was always their right) shows strong commitment and conviction to the licence 10:39 AM Question from Jcorsellis At what point will the decision be made on the location of TE11 and will the timing of that decision enable the groundworks to be completed before the rig could otherwise leave TE10? Brian Mitchener (Exploration Director) we have set ourselves a target of early December to confirm the Te-11 well location and ground works can be completed to meet this schedule 10:39 AM Question from gmarchy General comment; I think the rallying call just now was superb JP. It provided me with a bit of confidence, after a tough period for the SP. I felt you seemed more assertive and almost angry that before, which is good in my eyes! Hopefully everyone will share my sentiments and back the team in the coming weeks and months to completion. GM James Parsons (Chief Executive) Thank you. Yes to be honest whilst I absolutely understand the sentiment and frustration driven by the share price - this is no time for anything other than laser like focus on the drilling. I’m simply not getting distracted right now. I would also like my team to have the full backing of our shareholders at this critical stage. 10:41 AM Question from MikeGP Oh,… and good morning all! JJ Traynor (Chief Financial Officer) Morning Mike. JJ 10:41 AM Question from Jcorsellis Given the increasing belief that the Palaeozoic may be transformational because of the size of the potential structures/traps, has the Company’s thinking moved on to deciding that the Palaeozoic will be drilled by the Company whatever the results of TE9 and TE10? Brian Mitchener (Exploration Director) As long as we can delineate a prospect the Paleozoic target will be drilled as it will be independent from the Te-9 and 10 results 10:41 AM Question from BILLFISH James at Easter time this year you were guiding TE9 would spud around 26th JUne. Now we know it is going to be next week. What caused the guidance you gave to be so far from actuality James Parsons (Chief Executive) The seismic was a little slower than we expected and I wasn’t prepared to start drilling until we had the seismic fully processed and understood. Mistakes are expensive in this business and this is too important to get wrong. 10:42 AM Question from Dingdangdo At the Deep Dive there was lots of great information about TE-8 but there wasn’t really any mention of the poor borehole condition. Could you please explain what we’re going to do differently in the upcoming wells to avoid this occurring again? Brian Mitchener (Exploration Director) we are using a different non reactive mud, in a vertical well bore. we do not expect to incur the same issues 10:43 AM Question from Thorough Please can you update us on the funding situation for the company if we drill all three drills. How much cash do we have, how much will they cost and what will be the residue cash after drilling. JJ Traynor (Chief Financial Officer) $33 million cash presently, which is sufficient to leave us in a good position after the wells are drilled. As I always do, I caveat that we do reserve the right to access further capital, should it present itself. Capital raise is not on the table today. 10:43 AM Question from Beetleboy James, you have been consistent with your prediction of the LE, despite what the derampers/idiots say, of October ‘18 to March ‘19. Do you still stand by this? James Parsons (Chief Executive) My current thinking is between now and summer 2019. Yes it could be a lot earlier. 10:43 AMC has

ps200306 14 Oct 2018

Fireside chat earlier LOL @ “Bitchy knitting circle” … apt description of the LSE SOU discussion. I webscrape it and mail myself a digest so that I can scroll through the dross at high speed. I’m sure there’s a few lurkers on here, like myself, who don’t have much to say but appreciate the commentary from those who know what they’re talking about. I’ve been invested in SOU for a couple of years (and PVR for longer than that). Pity iii self-immolated so effectively with the new format. Nice to see a few people still here.

moneyman59 13 Oct 2018

Fireside chat earlier Email me at [email protected] for full transcript. MM59

theprior 13 Oct 2018

Fireside chat earlier Couldn’t check in for the FSC yesterday, waiting for Sarah to send me a transcript. But wouldn’t expect comments from JP on the LE, he’s not even given much of a time frame (and even that seems to be a mobile event ) but, from what I’ve heard he’s using the timing of drills as a negotiating tool so we’ll not know about the LE till the last minute I guess. I was always quite conservative about the end game and 11x from here , between £3&£4 ps seems about right to me. Have a good weekend TP

moneyman59 13 Oct 2018

Fireside chat earlier Q&A was good yesterday-thought comment that Sidi farm out likely to be overtaken by events in Tendrara was interesting plus JPs departure in 6-8 months dovetailing with LE also v telling. Note Qs that got no answer - has there ever been an offer for Sou, and what criteria is used to decide if an offer is put to shareholders (from me) got either no comment or none at all!! All be over soon one way or another. 11 bagger mentioned, but from what SP? Regards MM

theprior 13 Oct 2018

Fireside chat earlier Only me, mm, (and R94, lol) Yes, I miss the old gang too, and the banter. One or two finding their way back to the ii boards but I think SOU has lost a lot of followers because of the destruction of the sp over the last twelve months. I’m still enthusiastic, and now the drillbit is about to turn again, I’m expecting a steady rise. I too tried LSE but haven’t found many interesting conversations on any of my stock boards. Just a lot of feeble one liners, mostly illinformed and some, just insults. Have to scroll through so much dross to find anything useful. But, hey ho, things can only get better! ?? Atb, TP

moneyman59 12 Oct 2018

Fireside chat earlier Is there still anyone posting on here TP? Been over on LSE but like a bitchy knitting circle with few informative posts. Miss the old iii gang. MM59

theprior 12 Oct 2018

Fireside chat earlier Can’t find a transcript of Q&A but here’s link to JP’s opening speech. [link] TP

theprior 11 Oct 2018

3 cranes Rig up today. Stunning footage on webcam. Spud next week. TP

Ripley94 10 Oct 2018

Bad news tomorrow? SOU… XXXX And again @ 32p

theprior 02 Oct 2018

3 cranes TP

theprior 02 Oct 2018

3 cranes Malcy has thrown in his twopennyworth today as well. He has put in a bit of an allrounder in his blog with a bit of enthusiasm to boot. #excitingtimesahead. (as he says) TP