Incidental stuff

In reply to xigris, post #1032

...I don't usually have anything worth saying.

Have you met Isaac? :)   Thanks for the info, it's reassuring to see some confirmation.

In reply to xigris, post #1032

Xig,

This is of course completely consistent with the responses given to a number of other people who have asked similar questions since the interims (albeit that I haven't seen November specified previously). I'm in little doubt that the (potentially) relatively extended timeline is due in part to the difficulty of deciding when enough production data has been acquired to draw some good conclusions about connectivity...and no doubt this issue forms a big part of the 25% incomplete and is the subject of ongoing meetings.

ee

Thanks Xig and ee,

I like the fact that 75% into the reserves update process, the company are still pointing at the purchase of the minority interest as a sign of their confidence in a positive upgrade. Had their confidence shown signs of being misplaced as the audit of reserves has progressed, perhaps they might not still be drawing a shareholder's attention to this?

If connectivity takes longer to prove and a big upgrade takes longer to count...heck, I don't mind waiting until Christmas. The only downside is the strong impatience:noise correlation on these boards.

I think I might have just broken the pointless speculation rule.

Mark

In reply to emptyend, post #1034

.....and no doubt this issue forms a big part of the 25% incomplete and is the subject of ongoing meetings.

And quite possibly the 25% still to be done is the trickiest part of the total exercise.

I suspect the quote of 75% complete may be misleading anyway and not to be taken too literally........many who have been involved in projects will be aware of the 80/20 rule: 80% pf the work takes 20% of the time, and the last 20% of the work takes 80% of the time. I'm just happy it's being done and we're getting positive noises from the company - if November becomes January, so be it.

Redhill

In reply to redhill, post #1036

And quite possibly the 25% still to be done is the trickiest part of the total exercise.

I suspect the quote of 75% complete may be misleading anyway and not to be taken too literally........many who have been involved in projects will be aware of the 80/20 rule: 80% pf the work takes 20% of the time, and the last 20% of the work takes 80% of the time.

Certain to be true, IMO, especially given the connectivity comments.

Purm also makes a perfectly logical point.

Time isn't crucial - but getting a decent assessment may well be. But I'd still stick with the thought that if I were a buyer I wouldn't be wanting to wait for the i's to be dotted and the T's crossed on this report - I'd be getting a deal done rather than risk losing out.

ee

Buying the minority interest is certainly a vote of confidence, from Soco management, and I too am hopeful of a big reserve upgrade. However you also have to ask why the seller of the minority interest sold. They were AIUI party to equal info as Soco at the time and so one would expect that they would not have sold if they were of the opinion that a large upgrade was pending.

To be fair though the price paid for the minority interest seemed more than fair even if no reserve upgrade happens.

Despite what people might think I'm pretty bullish on the Soco share price. Having said that I think it pays to remain sceptical until the facts are out in the open, rather than paying up front for any upside (not that this is the case here anyway).

Log

Hi Log

The minority interest's cost apportionment was racking up compound interest IIRC which may have made a deal more of a win/win , more speculatively we are also not privy to the small print which may have a cap on the size of the carry forward which may have been relevant if a reserves upgrade necessitates more CAPEX

Cheers

Buying the minority interest is certainly a vote of confidence, from Soco management, and I too am hopeful of a big reserve upgrade. However you also have to ask why the seller of the minority interest sold. They were AIUI party to equal info as Soco at the time and so one would expect that they would not have sold if they were of the opinion that a large upgrade was pending.

Yep! Just like one questions why PTTEP walked away prior to the last drill on TGD I remain very sceptical. And I really disregard comments made off the records to private  investors at the AGM.

The management really need to use the appropriate forms of communication, which is via a RNS. It really is not that difficult to message to the markets that Soco are reviewing reserves and they expect news in November.

However, management choose not to. One has to ask WHY? Maybe as they lack confidence in the size of any potential upgrade or perhaps even consider it not to be material.

So it begs the question why do certain people think we are due a significant upgerade that is material to the NAV?

The assets are worth what someone is prepared to pay for them. I think Soco should do a deal with the highest bidder, I think this is probably the best time in a LONG time to sell the company given where Oil price is, buoyant stock markets and steady but decent growing production from Soco.

These days I hardly call any management up in any of my shares, I mean what do you expect them to say other then what you want to hear? So what is the point? It is only worth calling to get clarification on an RNS/or improve ones understanding else I think one should make their decisions based on the information communicated via the right channels.

In reply to Isaac, post #1040

However, management choose not to. One has to ask WHY?

It is very straightforward from where I sit. Why encourage people to move in and start trying to buy you out before you have all the ammunition you need to have such discussions?

The other explanation is that they have already got a deal lined up in principle (subject to a bunch of conditions, the most important of which would be the reserves assessment). But I'm sure you'd all be rushing to dismiss that as hogwash ......:-)

begs the question why do certain people think we are due a significant upgerade that is material to the NAV?

..because some "certain people" engage their brains and pay attention to things that have been said to others*, as well as the large amount of information (re OOIP etc) that is in the public forum.

*I've heard nothing at all directly, but there are multiple sources including a number of people here....and you are welcome to disregard such comments if you wish.

These days I hardly call any management up in any of my shares

I'm sure that comes as a massive relief. Perhaps they will be able to get on with their jobs......

ps....re rhomboid's point about compound interest, my understanding is that the carry for the minority would have taken at least another 2-3 years to work off, due in part to compound interest at 9% having been charged on the funding of the minority for the last decade+.

I see that Talisman have just thrown their CEO overboard. Wonder what the reasons are for that.....

Interesting news out of Vietnam about PetroVeitnam being split up:

HANOI--Vietnam's state-run PetroVietnam Oil & Gas Group and PetroVietnam Finance Joint Stock Corp. (PVF.VH) will be spilt up this month, the government said Wednesday.
The government wants PetroVietnam Oil & Gas, better known as PetroVietnam Group, to shed non-energy activities like civil construction, property development and stock investment, the government said in a statement posted on its website Wednesday.
"Right now PetroVietnam Group is experiencing a major restructuring and we can't say for sure how or what will happen, but one of the possibilities is PetroVietnam Finance will be converted into a bank in the near future," an executive at PetroVietnam Group headquarters told Dow Jones Newswires Wednesday. He declined to be named because he isn't allowed to speak to the news media.
PetroVietnam Oil & Gas currently owns 78% of PetroVietnam Finance. Morgan Stanley owns 10%, according to PetroVietnam Finance.
The government will list the PetroVietnam Group-controlled PetroVietnam Ca Mau Fertilizer Co. Ltd. "at an appropriate time," according to the statement. However, PetroVietnam Fertilizer & Chemicals Corp. (DPM.VH) will remain an affiliate of PetroVietnam Group, the statement added without defining PetroVietnam Group's stake in either company.
The government has asked PetroVietnam Group to submit proposals for divesting itself of PetroVietnam Finance, the statement said without giving details.

In reply to djpreston, post #1043

Must make sense for them to strip PV right back to the core. IIRC there was some property/construction-related scandal in the fairly recent past, so I guess this move is a follow-on from that.

ee

Soco is too low especially if the Oil price continues to hoover at around current levels as the cash generation is huge.............I personally think we are ready for the next leg up. Perhaps target £4 by year end.

The markets want to go higher IMO.

I doubt a deal will get done anytime soon, I think the directors like their salaries and are not ready to give that up just yet IMO.

Issac, I agree, but I think the year end prospects depend largely on the reserves review, £4 by year end is by no means out of the question, could be more if there is a significant reserves update. I too am surprised, that this share price isn't rising, especially with relatively high oil prices, qe3,  and some positive signs in the eurozone.   

Of course what I think means nothing,  the market is clearly skeptical about a takeover in the near future,  mind you the market thought the same about DANA too not long ago,  to mention only one !

Still we'll see, 

cheers K

In reply to kenobi, post #1046

Of course what I think means nothing,  the market is clearly skeptical about a takeover in the near future,  mind you the market thought the same about DANA too not long ago,  to mention only one !

What I think means nothing either.

However, in relation to Dana the market had no expectations whatsoever regarding a takeover, as it wasn't even thought to be a likely target (except by a few like me who thought it was too cheap). The curiosity here is that analysts would all dispassionately recognise that VN is capable of being sold - but none of them seem to be trying at all to make any estimates of value in an M&A situation (not since the JPM note in the spring that considered the read-across from Perenco, anyway....).

ee

Yes I'm staggered that the takeover potential isn't mentioned.

we can but hope that at some point there will be some analyst reviews of the sector, then potential takeovers or asset sales might be bought into it. In the meantime, lets wait until November and hope that the reserves review/upgrade is eyecatching enough to warrant a re rating,

K

In reply to kenobi, post #1048

Yes I'm staggered that the takeover potential isn't mentioned.

That isn't my point. Takeover potential has been mentioned quite frequently in the past - though less (rather than more!) attention seems to be paid to it recently - BUT there is no attempt at all to quantify what the potential value might be under such a scenario!

They don't even say "we can't make a proper assessment of value until there is a reserves update" ...which at least would indicate that they have considered the situation and provides a not-unreasonable defence for analysts who are constrained to deal in published facts rather than speculation.

Two 300,000 bbl cargoes to be sold from TGT over 8 days in early November. That is over and above the 40,000 bopd that they have been selling on the medium term contracts (at Brent +$6.60 or so)  in H2....so I guess that suggests production is going to plan.

In reply to emptyend, post #1050

Good morning ee, Barbara and I are in the Cap d' Agde after a good party last night. The naturists are asking why I am on my laptop so much, when there is so much to see and do here.

Does that mean that daily production from TGT is 77,500 BOPD? i.e. 300,000 every 8 days = 37,500, Plus the original 40,000 BOPD.

That seems a bit high but we can hope

In reply to MadDutch, post #1051

No it doesn't. You can't infer much about the daily production rates in fact, save that they are well above 40k......not unless you are certain there have been no unreported cargoes.

The only relevant deduction I would make is that the sale of two cargoes in short order is associated with an attempt to properly test the production limits of the FPSO in the days before or after the sale.

Re Cap d'Agde incidentally - you can spare us the running commentaries this year.........  ;-)