Sound Energy shares touched fresh all-time lows this week as the oil and gas company fails to inspire investor confidence amid slow progress in developing gas assets in Morocco.
The Moroccan assets hold great potential, yet the market has learned little of development progress in recent months and shareholders are seemingly growing frustrated with further perceived delays.
The company did a sterling job in securing project-level financing for Tendrara last year boosting shareholder hopes for the commencement of sustainable production at the project.
However, investors have received little in the way of official releases from the company in recent months, apart from a series of updates about restructuring financing agreements and the conversion of loan notes.
The Sound Energy share price has been dogged by ongoing loan note conversions.
Companies that are subject to persistent convertible loan note conversions can fall into a ‘death spiral’ of regular shareholder dilution as loan note holders are issued new shares.
Sound Energy’s convertible loan note holders last converted notes into fresh equity in November, exercising a £250,000 tranche at 2.25p.
The note holders have an additional £250,000 remaining to exercise. With Sound Energy shares trading at 0.60p yesterday, should the holders wish to exercise, they may have to do so at the lowest level for Sound Energy on record.
