INVESTOR PRESENTATION Q2 2019
A MID-CAP MOROCCAN GAS COMPANY New seismic de-risking structures BOLD REGIONAL GAS STRATEGY I T EXPLORATION UNDERPINNED BY Test planned at second TAGI A L PROGRAMME Y discovery (TE10) Strong gas demand and local pricing Moroccan Cornerstone Investor (OGIF) Multiple strategic partners Production Concession awarded DE-RISKING Gas Sales Agreement approaching EXISTING LOW COST 0.65 TCF DEVELOPMENT DISCOVERY Development Funding under discussion IN EASTERN MOROCCO RECENT SECOND TAGI DISCOVERY FURTHER (AT TE-10) TESTING UNDERWAY CONSOLIDATION MOROCCO SIGNIFICANT EXPLORATION POTENTIAL Eastern Morocco up to 34 Tcf O C Southern Morocco up to 11 Tcf STRONG C O Carbon consciousness driving R THEMATIC O transition to gas M POSITIONING Slide JOURNEY SO FAR... 1 Introduction of Introduction of Acquisition of Moroccan Successful drilling and TE-10 Gas Strategic Partners Cornerstone Investors onshore gas portfolio extended well test in Discovery Eastern Morocco (2018) Investor Tendrara, Anoual, Schlumberger, (2016/17) Presentation Matarka, Sidi mokhtar Enagas Q2 2019 Volumetric estimates are Gross unrisked GOIP
THE TEAM James Parsons Brian Mitchener JJ Traynor Mohammed Seghiri Chief Executive Offjcer Exploration Director Chief Financial Offjcer Managing Director, Morocco Over 25 years in Oil & Gas Over 36 years experience Over 30 years experience Over 18 years’ experience in strategy, general management, in Oil & Gas exploration in oil & gas and fjnancial leading complex European and M&A and fjnance across including as Regional markets, including as African projects across difgerent Europe, South America and General Manager Exploration Executive Vice President sectors, including Gas Storage, Central America at BG, Vice President of Investor Relations at Shell, Oil&Gas Exploration and Power International Exploration Managing Director of oil & Production. Joined Sound 12 years with Royal Dutch Shell for Africa at Statoil and 22 gas research at Deutsche Energy from OGIF where he years with BP Exploration. Bank, and as an Exploration was Managing Partner. Specialist in restructuring, Chartered Geologist, Geologist with BP funding and growing small and a past President of listed upstream companies; the Geological Society’s qualifjed accountant Petroleum Group Joined Sound Energy in 2011 Slide 2 Investor Presentation Q2 2019
COMPELLING MOROCCAN CASE FOR GAS N A E Tahaddart Power N A R R 2 x 400 MW E T I D Morocco E M • Low risk emerging market Oued Growing gas Dhar Doum penetration El Makhazine • Gas increasingly 4 x 400 MW 2 x 400 MW replacing other fuels Oujda • Circa 90% hydrocarbons Disadvantaged C imported from Algeria I supply position T N Al Wahda A • GME pipeline ownership L Rabat 120km 4 x 400 MW T transitions to Morocco in 2021 A • New Gas Agency and law Casablanca under discussion • 10 year tax holiday Top quartile fiscal terms • Thereafter 36% net government take (31% Corporation tax and Sidi Moktar Onshore 5% royalty after 10.6 Bcf) Anoual Exploration Permit Marrakech Tendrara KEY SHAREHOLDERS Production Concession Retail O Institutions C Greater Tendrara Directors C Slide Exploration Permit O Moroccan Cornerstone 25.6% R Investor (OGIF) O 3 A I M R E G 2.1% 60% L A Investor Presentation 12.3% Q2 2019 Gas Maghreb-Europe Pipeline Proposed routing of pipeline to GME
EASTERN MOROCCO: EXTENSION OF PROVEN NORTH AFRICAN BASIN GREATER TENDRARA – 8 years remaining 47.5% interest Exploration 14,559 km 2 permit acreage, Operated 10 wells drilled ANOUAL Atlas Mountains – 8 years remaining T U N I S I A High Plateau 47.5% interest Exploration 8,873 km 2 permit Operated Atlas Mountains Benoud PRODUCTION CONCESSION Ghadames – 25 years remaining Oued 47.5% interest Exploitation 133.5 km 2 M O R O C C O Mya A L G E R I A permit Timimoun Operated Continuity of the Algerian Triassic Province Illizi and Saharan Hercynian platform Ahnet Play type: gas discovery with condensate- Slide light oil shows in the Lower Triassic sequence; 4 TAGI and Paleozoic sand objectives 0 km 300 N Investor Presentation Q2 2019
EASTERN MOROCCO: EXISTING WELLS 28m net pay, 17 mmscf/d 32 mmscf/d after stimulation & clean up: TE-8 TE-9 TE-10 TE-6 TE-7 achieved post-stimulation Successful Extended Well Test (2016) (2017) (2017) (2018) (2018) Dry Dry Discovery JK-1 Triassic TAGI TE-10 discoveries and leads SOUND 2018 with c.21 Tcf potential. A N O U A L TE-6 SOUND 201 6 2500 to 3500m depth TE-4 TE-9 TE-7 7 TE-8 TE-2 SOUND 2018 SOUND 2017 7 SO S SO O OUN OUN UN UND 20 U N N 20 20 2 2017 0 017 0 17 7 TE-5 TE-3 RR-1 G R E A T E R T E N D R A R A TE-4 SBK-1 TE-1 TE-4 Palaeozoic concepts, additional 13 Tcf potential, 2500 to 4000m depth. Slide 5 Investor 5 0 K M Presentation Q2 2019 Volumetric estimates are Gross unrisked GOIP
TE-10: DISCOVERY (DEC 2018) ‘NE LAKBIR’ STRUCTURAL + STRATIGRAPHIC PLAY POST–DRILL DISCOVERED GOIP (TCF) GROSS* LOW MED HIGH Structural 0.03 0.08 0.17 Stratigraphic 0.584 1.43 3.41 Stratigraphic volumes include the structural volumes TE-10 drilled ca. 110m gross TAGI succession with gas shows throughout Up to 15.4 m net pay identifjed Gas bearing net pay intercepted in and below structural closure (1943m MD), suggest the gas accumulation most likely extends updip into the NE Lakbir structural-stratigraphic trap Well will be tested H1 2019 to Slide 1943 establish reservoir deliverability and hence commerciality 6 Investor Presentation Q2 2019 *Sound Energy Internal Estimate
TE-10 TESTING OPERATIONS Slide 7 Investor Presentation Q2 2019
N A Tahaddart Power E N EASTERN MOROCCO: A R R 2 x 400 MW E T I D E M COMMERCIALISATION Oued Dhar Doum El Makhazine 4 x 400 MW 2 x 400 MW 25 year concession approved September 2018 Oujda Enagas led consortium providing FEED and C I potentially vendor fjnancing through Build Operate T N Al Wahda A Transfer (BOT) for both pipeline and CPF L Rabat Anoual 4 x 400 MW T A Production will connect to the GME pipeline near Casablanca Ain Beni Mathar village, via a new 20 inch Pipeline GSA under discussion ( Ofgtake expected to be either domestic power plants for gas-to-power G M E P I P E L I N E Tie-in point generation (transit via GME line) or export to 80 bar Anoual Exploration Southern Europe) Permit Marrakech Tendrara Production PROSPECTS, LEADS AND RESOURCES Concession TENDRARA O GAS EXPORT C Paleozoic 120 km PIPELINE 34 Greater Tendrara C Exploration Permit O Diameter: 20 inch R O HIGH Anoual M Identified TAGI leads 5.5 GAS VOLUME (TCF) 21.2 TCF Inlet point Slide 110 bar Greater Tendrara 20 Identified TAGI leads 14.7 3 8 MID ..n Central Gas Maghreb-Europe Pipeline Processing 7 Facility Proposed routing of pipeline to GME (CPF) Investor LOW TE-5 HORST 60MMSCFD Presentation Development & Prospective Volumes 1.0 1 Q2 2019 4 0 2 All volumetric estimates are Gross unrisked GOIP
SOUTHERN MOROCCO: EXTENSION OF THE MESKALA PETROLEUM SYSTEM SIDI MOKHTAR ONSHORE Jorf Lasfar Power Plant 75% interest Exploration 4,711 km 2 permit Operated Tahaddart Power 2 x 400 MW Safi Chemicals State owned Plant Phosphate Oued Plant (OCP) Dhar Doum El Makhazine 4 x 400 MW 2 x 400 MW PROSPECTS, LEADS & RESOURCES High Case (11.2 Tcf) 11 Al Wahda 10 Rabat Chichaoua 4 x 400 MW Meskala 9 Best Case (8.9 Tcf) Gas Field Casablanca GAS VOLUME (Tcf) 8 Planned 7 New Low Case (6.7 Tcf) Phosphate 6 Plant 7.6 5 O C 4 C O Marrakech 3 R Slide O 2 0.6 M 0.6 1 9 0 Triassic (TAGI) leads Liassic Triassic Lower Triassic Best Case & Paleozoic Gas Maghreb- Investor Europe Pipeline Presentation Q2 2019 All volumetric estimates are 100% - Gross unrisked GOIP
SOUTHERN MOROCCO: PLAY SUMMARY Sidi Shallow (1000m to 3000m) 0 1 0 2 0 3 0 4 0 k m N T Gas discovery (Kechoula) in the Argovian and Lower Liassic with 2 wells on structure ( Koba-1 and Kamar-1) Jurassic gas Koba-1 and oil Recent success perforating discoveries Meskala Kamar-1 1000-3000mMD and clean up test of Argovian in JRP-1 Kechoula discovery (Koba -1 well) Sidi Deep (3000m to 4500m) Deeper pre-salt potential 8.9 Tcf mid case GOIP , unrisked. low case - 6.7 Tcf, best case - 8.9 Tcf, high case - 11.2 Tcf Triassic leads 9Tcf potential Latest subsurface work suggests 3000-4500mMD at least two high impact prospects Slide KEY Exploration wells 10 MESKALA targeting the Jurassic GAS FIELD GAS DISCOVERY Triassic LEADS Investor Line of Section Presentation Q2 2019 Volumetric estimates are Gross unrisked GOIP
CURRENT EXPLORATION CAMPAIGN = NEWS EVENTS Q2 2019 April May June July ONGOING GSA HEADS FOR EXISTING DISCOVERY TE-10 FLOW TEST TE-11 EXPLORATION WELL TE-11 FLOW TEST Slide 11 Investor Presentation Q2 2019
APPENDIX Slide 12 Investor Presentation Q2 2019
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