Incidental stuff

In reply to emptyend, post #320

ee,

Well, I hope you're right, and if that's the case, I'll be the first to stick up my hand and say sorry ' I got it wrong, Well done'

Then you can go and buy something on the Canadian market perhaps;-)

repo

sorry last message was old information !

.

In reply to Isaac, post #321

How comes your expecting newspaper talk though ? It is not really Soco's style to leak things through the press & usually they are ery tight lipped about things like this.

My understanding is that it is a market rumour which will be reported in the press (from whom I heard it). I doubt any leak (and I'm open-minded re whether there is any direct substance to the rumour at all - it is perfectly plausible, but then I could have come up with such a figure myself based on "well-researched suppositions") would have come from a source close to the company.

Re repo's comment:

Well, I hope you're right, and if that's the case, I'll be the first to stick up my hand and say sorry ' I got it wrong, Well done'

I'll only be "right" if the 550p or so refers just to VN. I'm still expecting a bigger price for a whole company deal, in the unlikely case that there is one. The rumour seems to be emerging in a timeframe that is consistent with a February deal though....

Then you can go and buy something on the Canadian market perhaps;-)

Yeah - I've always fancied a chalet at Whistler  ;-)

ee

This from the Telegraph tonight...

http://www.telegraph.co.uk/finance/markets/marketreport/8120233/FTSE-today-market-report-live.html

Surging ahead too, was Soco International. The oil explorer advanced 23.2 to 365p amid speculation that it could be in a suitor’s sights. Previously, Sinochem has been mooted as a potential predator.

...but all that proves is that they read Stockopedia...

A lot of chatter in the mkt backing the 550p story but none know if true and whether SIA or just Vn.

Reckon SIA will be well bid in the morning.

In reply to emptyend, post #325

market rumour which will be reported in the press.....

FT report:

Bid rumours helped Soco International jump 6.8 per cent to 365p. The explorer has been linked with state-owned companies including Sinochem and Korea National Oil Corporation at a price of about 550p per share.

A more tenable reason for Soco’s strength came in an RBS upgrade to “buy”.

Recent well failures in Africa have distracted from Soco’s main project in Vietnam, which will be transformational for company cash flows when it starts production in August, RBS said.

Doesn't add anything to the vague rumours that Darron had heard, other than confirming a number that I'd heard earlier.

ee

I think the institutions will wake up tommorow & get buying like someone has just whacked them over the head telling them to buy.

Not so convinced a hostile bid won't work. If there was a time to go hostile then now is it IMO.

As I said yesterday I'm sure the large holders are just as disappointed as we are about the recent drilling in Vietnam/Africa & they will pressurise management to sell.

BlackRock is a publc Investment manager that hold abouts 10.5% of the shares.

It won't surprise me if the core holders that we all felt the management have a strong influence over are divided in their views & KNOC/Sinochem goes hostile and manages to pick up decent slugs of Soco.

No disrespect to Soco management but 2 years ago they had a lot of credibility & the last year the exploration in 2010 was talked up only to return 0.

So people may not be as supportive as they were a year or two back.

If the right price comes along then I intend to sell up - but IMO there is a deal to be done here & think the management are willing sellers at the right price too.

KNOC/Sinochem only need to get PontOil on board and it will game over IMO.

I think it is worth posting details of Institutional holders of Soco :

http://markets.ft.com/tearsheets/businessProfile.asp?s=sia

Considering a lot of the analysts had their target prices around £4, IMO it is very likely the above institutions will sell around £5.50 - IMO there is a deal to be done here. 

It's in the Express now so it must be real....


"SPECULATORS targeted oil explorer Soco International yesterday as leading UK shares were pumped up to a 32-month high

Mid-cap Soco, whose shares have been slowly recovering ­following disappointing updates last year from operations in ­Vietnam and the Democratic Republic of Congo, surged 23¼p higher to 365p as traders ­suggested a £1.8 billion bid was in the pipeline"

http://www.express.co.uk/money/view/224003/Market-Report-Soco-fuelled-by-1-8bn-bid-hope

MARKET REPORT by GEOFF FOSTER: Chinese send Soco soaring

Punters went loco for Soco International just before the close as rumours of a £5-a-share bid approach did the rounds. Shares of the oil and gas exploration group spurted to 370p before closing 23.2p or 6.8pc up at 365p amid whispers that Sinochem Petroleum could be sniffing around again.
The Chinese state-controlled oil and petrochemicals group expressed an interest in acquiring Soco's share of two offshore exploration blocks in Vietnam a couple of years ago but walked away. Dealers heard that it now wants to buy the entire company lock, stock and barrel.
Soco's assets in Vietnam are large and look attractive to any predator. Broker JP Morgan Cazenove in a note last month chose Soco as the most attractive takeover candidate in the European exploration and production space.


But Soco has disappointed followers of late with news that the third and final exploration well in the Democratic Republic of the Congo has been plugged and abandoned. It followed two previous unsuccessful wells on the Nganzi licence.
Broker Evolution Securities has pointed out that the exploration portfolio now looks thin and that makes Soco a sitting duck for a takeover, especially with production set to ramp up to 30,000 barrels of oil per day by mid-2012.



Read more: http://www.dailymail.co.uk/money/article-1348450/MARKET-REPORT-GEOFF-FOSTER-Chinese-send-Soco-soaring.html#ixzz1BSbrZR27

I would have thought we would get a more decent rise today. Makets clearly sceptical.....let it be.

I do wonder though why did'nt management confirm or deny the rumours today ?

Also why is it that Sinochem is more prepared to quote a price this time round whereas in 2008 no price was mentioned ?

In reply to Isaac, post #333

I do wonder though why did'nt management confirm or deny the rumours today ?

Also why is it that Sinochem is more prepared to quote a price this time round whereas in 2008 no price was mentioned ?

Sigh! It isn't Sinochem!

Sinochem is merely the name that came up before, so the lazy journos (and traders) are just trotting it out again.....and any other plausible name they can think of (thereby showing they don't actually have a clue who it is!). And it isn't them who has said anything about price either.....it'll be some intermediary letting a figure slip about some deal that may or may not come to fruition. It is clearly not even half a story.

There would have been a price discussed last time (otherwise it wouldn't have been regarded as serious enough to warrant disclosure) - but the difference this time would be that 550p (assuming that to be an accurate element in the rumour) is sufficiently close to a sensible price for Vietnam (at least) as to warrant some serious discussion.

No management ever confirms or denies rumours unless it is forced to (save for the Smith and Nephew denial of ALL and ANY talks in recent days, aimed at nipping the media feeding frenzy in the bud). It is wasteful for companies to allow managements to be continually deflected by pointless speculations that are actually more likely to destroy shareholder value than to create it.

Actually I'm quite surprised that the market has even had half a sniff of a deal - but I guess if one was trying to set up an auction with a handful of possible buyers there would be enough advisers around to let something slip (especially if they realised all the bids were well above the market price and saw some form of opportunity).

ee

Interesting, thanks ee.

How do you see the current process playing out? Your best guess? Do you think a deal will still be done by Feb?

I just had a look back at the Dana deal & that took almost 3 months to complete as the initial approach came in July.

I think one exciting thing about Soco is a number of suitors are interested which therefore warrants a premium on the price. And what is interesting is how much of a premium is the question to be asking because factors such as market value is simply not enough as one needs to consider the location of the reserves as well as the ability to secure a decent flow of production coming on stream needs to be considered.

A company can buy x number of bbls from the market at a certain price but there is a limitation of doing such business which is you can only by a max number of of bbls directly from the open market as one needs to factor in costs of Storage & costs of charting the cargoes from a to b.

Whereas buying an asset like TGT which has about 20+ years of production & being able to store that Oil in the ground for next to nothing & produce it over many years at a price agreed in the current moment in time needs to be paid for at a premium to market price IMO. Basically by NOCs buying assets like TGT it is in effect them securing future reserves.

My money is on the Japanese if these bid rumours are true. The Chinese have been pretty active,as have the Koreans on the M&A front. My Soco stake, albeit small, is up for grabs at 550p.

Whilst many may think that this is not reflective of the true NAV of Soco, one only has to hark back to Knocs takeout of Dana (again, the price was not fully valuing the assets & prospects of the group) but, and an important but, it was at a very decent premium to where the stock had been trading for a while. Whilst the difference here is that management have a far bigger "interest", and are thus able to dictate somewhat whether they get taken out or not, I do feel that 550+ might be enough to entice them. I could be wrong.But it would entice me.

Anyone entice see 550p as enough?

Issac,

No chance of an acceptable bid before the summer IMHO.

Buffy

Buffy

I don't think anyone knows when a bid will come. It could happen tommorow. One can never rule these things out.

I am certain of two things though.

a) Soco will be bid for at somepoint
b)Management will do their best, to get the highest price possible

This is one where you just need to sit patiently and wait - Just like one had to wait with Dana IMO.

Isaac,

I can accept that even if they get the extension for TGD they might be prepared to do a deal with someone fairly quickly; but have a think about how Soco will get a decent value for TGT.

My point is that you WILL 'just need to sit patiently and wait' !

Anyway I got out on the TGD news, so I'll keep an eye out for an attractive re-entry price. If it doesn't come, hey ho...

Buffy

Buffy

I am going to stay put. There is undoubtedly quite a lot more going on in other stocks and it is the reason why Was got out today. The grass is not always greener on the other side tthough.

I am going to see how this pans out. If I get it wrong, well that's life.

You pays your money and you takes your chances....

well I was disappointed with the price action today, but thinking back to the dana deal , I recall that initial reaction was muted, even though a approach was announced with a price. this created an opportunity to buy quiet a lot of stock at around 13 / 1400 the take out price was considerably higher.

I worries me that some reports are saying management will consider offers over 400, I would have hoped quiet a lot over 400 !

K