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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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. The Company’s net entitlement volumes were approximately 15,500 barrels of oil equivalent per day. more »
1122 Posts on this Thread show/hide all
Issac is just frustrated and I have some sympathy with this
Me too ! I don't think there are many on this board that are not.
So does that mean that the management should sell up asap ?
A company that they've built up over 10+ years ?
The company has indicated where we are going, I don't think demands to sell up quicker than the management want will do any good. Perhaps later, a majority will come to the view that it's time to sell, but wanting to sell now, before p2 even comes on line and potentially throw away considerable upside ? because some minority of shareholders would like to get a quick uplift so they can go onto their next trade ?
K
Kenobi - I agree but I also think Issac doesn't mean it either. If the share price starts rising again management will be back in his good books. I'm not sure that makes him a moron it just means he is venting a little on a tiny insignificant (sorry s'pedia) bulletin board.
I'd like to see the share buy back kick in for purely selfish reasons because I don't like to see the share price slipping below 300p but it isn't a big deal either way.
One think not mentioned much here is that the weaker Oil price must be having an effect on the current share price as cashflow must be down a bit in recent days. That could all change very quickly though.
Log
In reply to ExTownie, post #798
ExTownie
Isaac, if there was no doubt that SV alone was worth £4.80, the shares wouldn't be trading at £3.
I'm going to have to disagree with you on that, I'm going to use a real world example, Nautical Petroleum. NPE was unusual because all of its 3 principal assets that had been successfully drilled had been bought into by other oil companies, who will be better at valuing oil fields than the stock market, which sometimes will be too high or too low. Using the prices other companies had paid for those assets and the cash balance I was able to calculate a value of circa 500-530p per share, I posted this on the Fool at a time when the share price was 270p:
http://boards.fool.co.uk/shame-the-markets-are-so-negative-at-the-moment-12570163.aspx
One week later a trade buyer bid 450p. It really wasn't difficult to work out if you took the time to look at the detail, only the timing of the value being "outed" was unknown. We have a similar situation with SIA, using the recent sale of Vietnamese 2P barrels at circa $20 and multiplying by the current 2P reserves gives a much higher value than the current S.P, but the market isn't interested.
Regards
Unwise
With the SP back below 290p (however temporarily), it will be interesting to see if there are any more buybacks today. Not that 290p has ever been stated as a ceiling, but it does seem to be. Otherwise...we can but wish for a close period! ;-)
Log,
I'd like to see the share buy back kick in for purely selfish reasons because I don't like to see the share price slipping below 300p but it isn't a big deal either way.
I want it to kick in as well for selfish reasons - I'll get to own more of the company without buying any more shares!
Best,
JS123
In reply to unwise2, post #805
I concur..................Sadly there are quite a few indviduals on bulletin boards that listen to every word from x poster to make their investment decisions i.e. they lack the skills to think for themselves.
I doubt the buy back will be in the size it was prior to the AGM - You see when you have a shareholder rebellion you can get the management to do wonders for you. A I said I don't think the management are working in your or my interest, they are serving their own pockets.
In reply to Isaac, post #807
I concur..................Sadly there are quite a few indviduals on bulletin boards that listen to every word from x poster to make their investment decisions i.e. they lack the skills to think for themselves. - isaac
Isaac - Given that you are replying to unwize who was replying to me, it sounds very much like you are including me in that unflattering description.
While I did buy following ee's post in 2004, I am quite capable of making my own mind up about the level of value which a share offers. I do also greatly value opinions of posters who have demonstrated a good understanding of the company. In particular I would include ee and davjo as well as a number of others. However perhaps the difference between you and me, along with most of this board, is that we don't seek to blame other forum members for our own poor decisions. When SOCO's price drops sharply, you can be relied upon to start blaming ee for the fact that the company didn't sell up yesterday When you're not blaming him, you're blaming management for failure to sell, failure to support the price, failure to strike oil, falling price of crude.... Perhaps you need to look a little closer to home when you say they lack the skills to think for themselves. You give the impression of having bet your entire net worth on this company.
ET
ET
I said the following - You and others should be asking why is'nt the management doing a deal, it is pointless bringing online more Oil in an environment where the Oil price has collapsed from $128/bbl to $90/bbl :
ET
Using 2p reserves of 123m * $20 = $2.46bn convertyed to £ using 1.537 = £1.6bn / 333m = £4.80/share
They are booked reserves, i.e. a price Soco can be sold at.
In reply to ExTownie, post #798
To which you replied
Do you really believe in the above statement? In which case you think the markets are efficient, and if that is the case then what is the point in Investing?
Surely you invest in a stock because you think the market's valuation of the stock is incorrect and as you see value you Invest and hope the valuation gap closes using various catalysts i.e. a sale?
I think your statement is nonsense, I don't mean to be harsh, just honest.
Now if Soco were to do a deal....I would buy some BLVN with the proceeds - cheap as chips.
Some GKP down 8% today & some PMO down almost 5% at £3.24.....Hell I might even buy some Aminex, that Stuart chap appears to be doing an OK job over there.
Or some PCI at 5.74p, if they strike BIG in Kurdistan next year they will provide a hell of ALOT more upside then Soco can ever do from these levels. Ditto WZR.
HOIL a sitting duck ripe for takeover at £1.20 down over 5% today - Tony Hayward get a move on will you.
And don't even get me started with TPL, currently producing 7830 boepd, with 4,830 boepd & 3,000 bbls of gas, with potential of 25,000 boepd next year, they curently recieve 50% of Brent, netback around $35-40? With less then $3/bbl cost of production, wait to they get their export licence in 2013 and the cash will seriously start flowing. Let's not forget the cashflow that will be used to drill the billion bbl resource Tajikstan........This stock can make me SEVERAL times my money.
The problem with the Soco management is they don't know when enough is enough, sell the company, let us take £5/share and Invest in the numerous opportunities the market is currently offering which in turn allows us to make multiples of our stake.
For us shareholders it is just a total nobrainer, Why should I in anyway be sympathetic towards a management team that takes home large salaries every month and in the process I have to sit back and wait for them to do a deal.
In reply to Isaac, post #810
Isaac
One of the main causes of the doubt was the low rate of production. 30k (9k to SOCO) bpd would not allow anything like 90 of the 123m barrels to be recovered in the remaining 18 years. I stand by that statement that you simply can't say there is no doubt that SV is worth £4.80 while production is low. It appears that this production issue is being sorted out at the moment, but I think the market needs to see it, rather than just hear it from ES.
I am entirely relaxed about management's position in waiting for the right bid before they sell, whether that comes in 3 months or in 18 months. I do think that they will be in a much stronger position when production is right up and new reserves have been announced, which I expect to be Q1 2013. My guess at a sale date would be Q2 2013, although I note some well respected posters expect it sooner. In that time oil might go up, down, or sideways - nobody knows and I'm happy to take the risk, without blaming management for each dip....
ET
Issac all these companies you mention today were down a similar amount to Soco by your own admission. Why is the management of these companies also not guilty to the same extent of wrecking your investment as Soco? Surely if you held them you'd be writing on s'pedia demanding their assets should be sold so you can buy Soco who are doing a much better job.
All a bit bizarre and it sounds like you are just a bit frustrated.
Log
In reply to loglorry, post #813
Log,
I don't think you got my message in my last post. And no I would not say the companies I mentioned are 'guilty' of anything.
If you do some home work on the companies I mentioned you will conclude they are much further away from maturity then Soco is.
As far as I can see Soco will add negligible value compared to the current trade price on offer - So my arguement is why are we not doing a deal?
Soco has matured. I don't believe it is in shareholders interest to keep ticking more and more boxes that adds negligible value to the NAV.
The stocks I mentioned have much greater potential then what Soco is offering IMO, hence the frustration.
We could have added more value to Baulaung before selling it, that is very apparent from the results Salamander have had, why did'nt Soco insist on ticking loads of boxes before selling up in Thailand?
The management need to do a deal, we need to stop talking about FPSO;s and bacho tie up etc etc that is someone else's problem.
Isaac
As far as I can see Soco will add negligible value compared to the current trade price on offer.
What trade price on offer is this? Have I missed an important RNS? Has it not occurred to you that no potential buyer as yet has indicated any interest at $20/bbl?
In reply to Isaac, post #814
"The stocks I mentioned have much greater potential then what Soco is offering IMO, hence the frustration."
So sell Soco and buy them. Simple.
*Company strategy Part 3: Realising value
By locking in returns, regardless of the phase of the project life cycle, once the Company's capability to add value begins to diminish.
Remember what ES said on June 13th, “When someone else believes what you believe, no need to keep it.”
fuiseog
*Annual Report 2011, P4
In reply to jseth123, post #806
With the SP back below 290p (however temporarily), it will be interesting to see if there are any more buybacks today. Not that 290p has ever been stated as a ceiling, but it does seem to be. Otherwise...we can but wish for a close period! ;-)
Interesting to see no share buy backs, I wouldn't be surprised if they are keeping their powder dry for the time being, however, thinking about it, maybe they should be buying back before p2 starts production in a few short weeks. ES certainly seemed to express caution re the EZ and what's going to happen there,
K
In reply to kenobi, post #819
EZ .........
- Extraterrestrial Zoo?
- enough zilch?
- eat zuchini?
- emergency zoom?
- Exhibit zeitgueist?
- erotic zone?
I hope it is the last!
In reply to davjo, post #816
Yep, It has also occured to me Soco is not a serious exploration company. As such I don't think it is right they get paid handsome sums of money each month when the reality appears to be they are simply waiting for a deal to happen.
How about they stop being GREEDY and in turn I may not complain as much?
In reply to Isaac, post #821
How about they stop being GREEDY and in turn I may not complain as much?
have you called and made the offer ? I would advise them to get it in writing,
K