AIM-quoted Sound Energy (SOU:AIM), one of the big junior market success stories of 2016, gains 7.6% to 84.75p as it agrees revised terms to its acquisition of the Sidi Moktar licence in Morocco.
The new terms effectively allow Sound to benefit from the surge in its own share price and secure a cash injection which can be put towards the cost of future operations.
In March, Sound entered into an agreement with PetroMaroc to acquire a 50% operating interest in the Sidi Moktar licence in Morocco.
Under the original terms Sound proposed to pay by issuing around 21.3 million shares, with the Sound share price bobbing around the 16p mark at that time.
With the shares moving materially higher since then thanks to success on the Tendrara licence (also in Morocco) Sound has renegotiated the terms so that PetroMaroc will receive all of the proceeds of a share sale up to a value of 50p per share, the remainder will be shared equally.
FinnCap analyst Dougie Youngson has a 'buy' recommendation on the stock and a 104p price target. He comments: 'Given the recent share price appreciation this renegotiation makes a great deal of sense and could yield significant new cash flow for Sound to help fund its ongoing work programme.'
