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Sound Energy PLC on Thursday said it swung to a profit in 2021 on a reversal of impairments and lower administrative expenses, as it continues to progress its operations in Morocco.
Sound Energy shares were down 3.8% to 1.66 pence each in London on Thursday morning.
The Moroccan-focused upstream gas company reported pretax profit of £2.5 million in 2021, swinging from a loss of £18.8 million in 2020.
The swing to profit came on the back of a reversal of impairments on development assets and exploration costs to a gain of £4.0 million compared to a loss of £9.8 million a year before.
Administrative expenses were cut by 41% to £1.7 million from £2.9 million.
‘2021 was a year of delivery in pursuit of monetising our significant discovered gas for our phase 1 micro liquefied natural gas project. This included the successful conclusion of a number of major agreements and the delivery of key project milestones that very clearly demonstrated our commitment to delivering against our promises,’ Executive Chair Graham Lyon said.
In July 2021, Sound Energy signed the phase 1 development LNG sale & purchase agreement for the mLNG project for the TE-5 Horst. This is a 10 year take or pay agreement between Afriquia Gaz, which is a fuel distributor in Morocco, and Sound Energy Morocco East Ltd, a subsidiary of the company. Sound Energy's subsidiary will provide a daily quantity of between 475 and 546 cubic metres of LNG to Afriquia under the agreement.
‘During 2022, we will continue to work tirelessly to deliver additional value for our shareholders through meaningful progression on both the Phase 1 mLNG project and the Phase 2 gas pipeline development in our energy transition strategy in order to deliver increased future company growth. I look forward with confidence to delivering a similarly productive 2022,’ Lyon said.
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