Detailed discussion of Soco's assets should take place on other threads, but this thread is to discuss the latest valuations both by ourselves and analysts, sentiment (ie will the shares go nowhere because there's not much upcoming news) and likely moves in the share price in the next six months. How should the shares be valued? How reasonable is it that any drilling without a firm commitment further than several months away is ignored by the market?
I haven't seen many recent analysts' reports on Soco, but I have one from Cazenove with a core NAV of 1370p and no doubt considerable explo NAV on top of that. I imagine that's approximately concensus, but maybe with crude rising again these concensus NAV figures will start to rise. Has anyone any other recent broker estimates?
My view, as stated elsewhere, remains that in the absence of much to get the market excited the shares will wander aimlessly for the rest of 2009. I've previously guessed that if crude were $65 at Christmas 09, then Soco's SP would be somewhere near £13 then, and I'm still very happy with that guess. What does anyone else think?
Of course unexpected bids and other events may overtake this, but these sort of events may happen to any company, and perhaps Soco (where management seem unlikely to accept bids since they believe there is considerable value not recognised by the market) is one of the less likely companies to be affected by the unexpected. The key new news for Soco might be (a) a bid (IMO unlikely), (b) some sort of presentation by management of the drilling data they claim to have that demonstrates a significant strike has been made at E, currently ignored by the mkt, or (c) possibly hitting oil off the Congo.
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As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.
SOCO International plc is an international oil and gas exploration and production company. The Company has oil and gas interests in Vietnam, which includes Block 9-2 and Block 16-1; Republic of Congo (Brazzaville), which includes Marine XI Block and Marine XIV Block, the Democratic Republic of Congo (Kinshasa), consists of Nganzi block and Block V and Angola, which include Cabinda Onshore North Block. The Company's operations are located in South East Asia and Africa. It holds its interests in the Republic of Congo (Brazzaville), through its 85%-owned subsidiary, SOCO Exploration and Production Congo SA (SOCO EPC). It holds its interests in the Democratic Republic of Congo (Kinshasa) through its 85%-owned subsidiary SOCO Exploration and Production DRC Sprl. Te Giac Trang (TGT) field’s Phase I production began on August 22, 2011. Total production net to its working interest from continuing operations, during the year ended December 31, 2011, were 5,437 barrels of oil equivalent per day. more »
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In reply to adam, post #1101
I'm losing the will to live and have other important things to do, so this will be my last comment on this non-issue.
Yes PMO is larger in terms of market cap (and EV, given their debt) - but so what?
I was making the point that their share price has been rising. It is a directional point, unrelated to liquidity, market caps etc. If the market was seriously concerned (as you have been suggesting) their share price wouldn't be rising - they produce 15,200boepd in Vietnam....and according to their recent results (note 2) their Vietnam operations account for 57% of their operating profits!
It is complete hogwash to suggest that the market would sell SOCO International (LON:SIA) based on Vietnam concerns whilst simultaneously buying Premier Oil (LON:PMO). It is clear that whatever the reason for the recent weakness in SOCO International (LON:SIA) (and the error-strewn Nomura note is as likely a reason as any) it has nothing at all to do with any coincidental marine skirmishes.
ee
To spell it out for you as you seem to be hard of thinking.
Well one of the points is that they have 10x the trade volume and Vietnam is (still) only 7% of their reserves. How does that compare to Soco???
You also did not address the other points I made about liquidity and tightly held share register (thus exaggerating price movements), so it is somewhat pointless in someone who is rude and doesn't bother to read properly.
Soco is much much more about Vietnam than Premier (7% of their reserves). It is very illiquid and tighly held stock so that already pronounced sensitivity to events in the region would become magnified.
You've made my day.
In reply to adam, post #1103
I'm a suspicious old sod, but someone who is both abusive and obsessively focussed on a single topic that is likely to be (for the foreseeable future) of only tangential relevance, seems clearly to me to have an undeclared agenda. I've no idea what that agenda is - but I'd suggest you stop pursuing it, as you plainly have no logical arguments.
If you really think that the City wouldn't care about 57% of the profits then frankly there is nothing I can do for you.
Oh - and Vietnam is also Premier Oil (LON:PMO) 's second-largest sovereign exposure, after the UK, with over $700mn of balance sheet assets.
It is completely inconceivable that Premier Oil (LON:PMO) shares would be bought if those profits and assets were actually considered at risk.
Thanks for the information. I got that from your rantings.
You mean because I disgaree with you?
So you're a parnoid, suspicous old sod.
Well at least we agree on something.
I'm tempted to let this go because you are such a bore too, but I'll try one last time to explain to you, but I expect you are just purposefully just misdirecting here.
Nobody is saying that.
It's not very difficult unless you are being obtuse to understand that Premier is a broader mor eliquid stock that just had its results on March 21st a day after the incident and Soco is a stock that is narrowly focused on Vietnam, very illiquid and prone to exaggerated price movements on little trading. Hence it is hight likely indeed that the Vietnamese skirmishes could have had an affect on the share price and much, much less lilkely that they would affect Premier. Therefore you are talking a load of Horlicks.
In reply to adam, post #1105
I'll just add that Premier Oil (LON:PMO) 's results:
1) mentioned Vietnam 30 times
2) showed that the largest increase in production (a 5-fold increase) was in Vietnam, which now tops their production in both Indonesia and the UK
3) indicated they had reorganised management to include Vietnam as a separate division
4) reported capex plans to drill 3 wells in Vietnam this year, including a 40% paying stake in the Ca Voi well in May....which is in block 121 off Eastern Vietnam. Roughly 40% of block 121 is claimed by China and lies within their "9-dash map" line !
I'm very happy to leave Adam's posts up there, now that his true colours have been clearly shown to all.
The bits you forgot
Indonesia 108
Pakistan 75
North Sea 48
Norway 48
Mauritania 48
Falklands 15
I make that 342 (THREE HUNDRED AND FOURTY TWO) occurences of words that don't fit into your mis-direction (remember the other points i raised that you have ignored.)
Using your figures 40% of 7% reserves is, well 2.8% of reserves.
So on balance (a phrase you are probably not familair with). Vietnam has importance to Premier but not as much as it does to Soco. Which is of course entirely the point.
Then to mention again the other bits of my post you failed to address, namely:
1) The lack of liquidity in Soco's shares and exaggerated price movements
2) The almost exlusive focus on Vietnam comapraed to Premier comparitvely less so.
3) The ten times greater trade in PMO stock and its more widely held nature versus Soco
Which means that your holding up of Premier as proof that Soco price not influenced by Vietnamese skirmishes with their super power neigbour is of course at best weak and more likely entirely bogus
Good grief adam, what's your point in all this? Are you suggesting we all sell up or what? I think it reasonable to assume that shareholders who have owned their shares for anywhere between 1 and 13 years are fully aware of the location of Soco's assets, and have also probably heard of China, ASEAN, Japan, the South China Sea, Iain Dunross, the Noble House, Pol Pot and even Saigon - go figure though we're still happy to hold (although one would like to have had something more 'imminent' for extracting the juice from this ripe investment than has turned out, but that's investment and life)!
As I understand it you claim to be a shareholder, yet your writing smells strongly of somebody looking desperately to drive the share price down - one of these is verifiable, the other is not and I'm sure readers are drawing their own conclusions.
Nothing unreasonable in 'Adam's posts, just countering like with like. Disagree by all means, but there's a silly whiff of 'group-think' about the use of negative recs, accusations of disruptive and abusive behaviour.
It's just a share, not a cult.......
What we have is two opinions from posters who hold strong ones and tend not to back down. I have my own opinions like most other people but do not feel that I have to post them. I tend to switch off however when posters get abusive and personal. It diminishes them.
Hi Groundhog and WeeEck
I'm afraid that I have to disagree, and my views are nothing to do with group-think - I'm as frustrated as anyone else with the slower than expected progress to realisation of final value from Soco. However I don't see where adam is going with trying to draw this connection between China's sabre-rattling and Soco's share price - as I see it, he has yet to actually complete his point with respect to the merits or demerits of Soco as an investment, particularly given that he's moved well beyond just giving facts, and a conclusion to his point is really all I would like to see.
I don't agree with censorship in the main, and certainly not with respect to adam's posts - the way he puts his points across to ee says more about him than ee, and doesn't reflect well but that's his problem not mine. Same goes for ee, myself and any other poster that plays the man rather than the ball.
In reply to Groundhog, post #1109
>>> It's just a share, not a cult.......
what ???
now you tell me so all that shaving my head and wearing pink robes has been for naught ??
In view of Adam's warnings it is strange that there does not appear to have been a sell off of the Ho Chi Minh Stock Index over the past few weeks - in fact it has risen over the past month, whilst SOCO's share price is back to where it was a month ago.
http://www.bloomberg.com/quote/VNINDEX:IND
Of course since Adam first warned us about this (last July I believe) SOCO has consistently outperformed the HO Chi Minh index, and indeed anyone who bought SOCO then would now be sitting on a very good profit.
In reply to kenobi, post #1112
pink robes are optional, and your own choice.......
Seriously though, something is dragging down the Soco sp and I doubt it has a lot to do with adam's theory, and don't believe for a moment that his posts on such a small BB as this would affect the sp.
Coastal (CEO) is often quoted as a comparator to Soco and is also down around 10% over the last couple of weeks - coincidence maybe as CEO's recent decline in sp and has been attributed to anticipated under-performance for 2103 which isn't something expected of Soco. There again, BG (my other main O&G share) is also down, but not as much, and I doubt that could be attributed to China.
Sitting patiently.
In reply to redhill, post #1114
Correction, I turn my back for a moment and Coastal has just reversed it's downward move and is up 10% today after a good update.
Clearly CEO shareholders are not too bothered about China.........
In reply to redhill, post #1114
I'd observe that the whole sector seems to have been tending weaker over the last week or so (eg CNE). I'd guess this is in part down to macro concerns (eg re uncertainties from Cyprus and over global growth prospects) - the street tends to view these things as a reason to go risk-off and cut high-beta stocks (ie those which are perceived to have more than the market average volatility, which most E&Ps are).
Overlain on that there is probably some profit-taking in SOCO - and a few Nomura clients will probably have jumped off too. As someone likes to point out - it isn't the most liquid stock and doesn't take much to move it down (or up).
Incidentally, I believe that the FPSO testing programme is likely to take several weeks, because they will want a few days steady reservoir info at each stage. I'd guess that implies news in the second half of April.
Just arrived in Japan on holiday (luggage still in Amsterdam) and amused to log in to Stockopedia and read the Adam/ee duologes. I just do not follow the reasonings of one of the above contributors.
I have held SIA for over 5 years and have a substantial holding at an average price of around 400p. I am under water but not as deeply as other E&P stocks. AEX has to more than double before I break even. Likewise NOP. Even recent purchases (or top ups in the case of HOIL) including TRAP have dropped even though the whole sector has arguably been at "bargain basement prices". Today, another of my longer term (4+ years) holdings, SQZ, had a bad day.
The whole E&P sector is depressed against which background SIA recent modest underperformance needs to be put into context. SIA tight shareholding and "lack of liquidity" are to me, substantial advantages.
Having spent 25 years living in the Far East (mostly as an investment analyst and Head of Research), I am neither a novice in investment, E&P nor Asian affairs in general.
Sitting here in Kyoto with no luggage and the best part of bottle of wine in me has prompted me to (temporarily) come out of "lurker mode" and put fingers to keyboard.
Give me ee (who like me worked in Japan in the bubble years) anytime in preference to adam.
Great post and spot on Kuronagi.
If you happen to be in Rappongi say hi to "Mogambos" and "Geronimo's" for me :)
Enjoy your time in Japan. A weird and wonderful country for a gaijin to work in that's for sure.
In reply to emptyend, post #1116
...because it will take a few days to obtain steady reservoir info at each stage.
The pressure graph looks like an inverted exponential curve and the trick is to call "stable!" when you believe there won't be another millibar increase in the foreseeable future.
I found the best way to do this was to graph the resevoir engineer's patience -- along with that of the Installation Manager, but on an inverted scale.
You know you have stable pressure once the Installation manager's impatience exceeds the reservoir engineer's patience...
Happy weekend.
SW10
In reply to SW10Chap, post #1119
Yes - thanks for the correction on that. It is the time taken to stabilise and not the time at stable levels which is the main determinant of the time elapsed.
:-))
Welcome back SW10Chap. We need more of your insightful posts on a more frequent basis please.
S