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. 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 extrader, post #861
I don't need anyone to tell me how I should Invest my money. I worked hard for it and I will do what I like with it.
Soco management are very good deal makers, one thing I can be reasonably confident about is they will get a good price for shareholders.
My view is I'd rather they did a deal now then a later date in the future as I think as an Investor I will make more money.
Nothing wrong with that.
Change the record
I don't need anyone to tell me how I should Invest my money. I worked hard for it and I will do what I like with it.
I think I heard ES saying the same thing at the AGM, seems you guys agree on more than I thought !
I see the Lizeroux Prospectus is now on the website. A couple of points. Re Lizeroux carry at 31 Dec 2011 approx $155m, the Company says :-
as at the date of publication of this document, the Group estimates that the amount of these costs and expenses has not materially changed.
I guess the reason for this is added interest (at 10% pa?) plus TGD/H4 costs incurred since December.
Note of academic interest....entitlements over and above working interest for the first four months of the year amounted to 2234 boepd for TGT and nil for CNV.
As expected, note made of restrictions/pre-emptive rights on transfer of shares within SV. I wouldn't be surprised if these 'restrictions' were quite onerous on Lizeroux as the minority. Coupled with ongoing development/appraisal drilling and probable expansion of facilities, cost recovery of Lizeroux's carry was likely to push out their entitlement to cashflow further and further into the future, so it isn't surprising they decided to sell now. They also had to consider their position if Soco were to sell SV leaving them in the cold, to say a Chinese company who might not treat their rights with the respect they've been used to. It's also possible that Lizeroux's minor shareholder(s) are Vietnamese who wish to remain anonymous and therefore would prefer a sale of their interest in a low key event rather than a major SV sale.
All in all, a very understandable deal which most certainly enhances shareholder value. I'm not over £5/sh estimate yet so don't have to revisit my bet with ee but I retain the right to do so as developments unfold ;-)
In reply to davjo, post #865
G'day dj,
Gosh! Thats an interesting spot. That must be (more or less) the right explanation too [though the thought occurs that they may have been expected to pay for capex once production started....and effectively have been drilled out by being unable to do so?].
I was told a very long time ago that it was 9% interest.
CNV was fully cost-recovered at quite an early stage.
All very good points! "A bird in the hand is worth two in the bush" clearly translates into Vietnamese...
ee
In reply to davjo, post #865
I suspect that the answer to the attractive terms of the deal lies in here:
Perhaps they found themselves unable to continue to meet their obligations (and perhaps that was one reason why the carry wasn't reducing?).
I also note that Pontoil has continued to add: Since the last report a month ago they have added 300,000 shares.
ee
Jimbly
8 Jul'12 - 23:23 - 8839 of 8839
Perhaps an RNS first thing Monday? Looks like we have first oil from H4:
http://www.baoxaydung.com.vn/news/vn/tin-tuc/gian-dau-gieng-h4-te-giac-trang-don-dong-dau-dau-tien.html
Google translate is struggling, but I can get the first lines:
"..6/7/2012, ..5 wells..average flow of 10-15,000 barrels/day... 7 days ahead of the expected accelerated program timings"
This page seems to translate better:
http://www.sggp.org.vn/kinhte/2012/7/293338/
I've translated the second link using google :
http://www.investegate.co.uk/Article.aspx?id=201207090700051638H
In reply to Isaac, post #870
....this is where things should start to get quite interesting..... ;-)
Note the infill drilling at H1.....how will that further capacity increase be produced?
In reply to emptyend, post #871
You just can't rely on these people. They led us to believe it would be July 12th. Now the SP will continue it's inexorable rise!
-:)
In reply to emptyend, post #871
Total speculation but I still wonder if ENI might have an FPSO becoming available in the not too far distant future?
would be interesting fuiseog , one thing is for sure, the if would not have agreed to the additional drilling if they did not have a plan how to handle the extra capacity,
k
Soco raises output at Vietnam TGT field to 55,000 bpd
http://www.reuters.com/article/2012/07/09/vietnam-crude-soco-idUSL3E8I92GP20120709
I don't know if they actually have yet or if this is a reading of the news that they soon will, makes little difference I suppose,
K
I asked the companyabout how they might accomodate extra production from the infill wells and the answer was follows:
"Any plan to export more than the processing capacity of the FPSO will only be fully developed once we know what the actual capacity limitations are. We know that it should be in excess of the nameplate capacity, but to what extent is the outstanding question. Thus, the answer to your first question is that there is no definitive back-up plan for additional export until we know the limitation of the FPSO. We expect to find that out shortly, within weeks, not months."
I also asked about the status of the liquids seperator:
"Yes, the separator facilities are installed on the Bach Ho platform. Although the metering needs to be calibrated for a bit longer so the exact measurements can be determined, the liquids are being knocked out of the gas stream. Thus, we are giving less away, but precisely how much is yet to be determined."
S
I also asked if the liquids seperator is installed and the answer is that it is and that it is being calibrated at the moment.
Any plan to export more than the processing capacity of the FPSO will only be fully developed once we know what the actual capacity limitations are. We know that it should be in excess of the nameplate capacity, but to what extent is the outstanding question. Thus, the answer to your first question is that there is no definitive back-up plan for additional export until we know the limitation of the FPSO. We expect to find that out shortly, within weeks, not months.
Well done ee, I think you deserve some credit :
http://www.fool.co.uk/news/investing/company-comment/2012/07/12/the-share-that-made-fools-millions.aspx
Agreed Isaac,
Shame the fool were not big enough to acknowledge the role ee played in bringing SOCO to the attention of other fools, against the conventional views of pyad for example. Particularly the legendary fess up post. when the shares were at around £3 in old money, (from memory).
It would have made the article much more informative, and show sometimes you need to go against conventional wisdom to pick the winners.
Not this thread but in relation to a comment on the "FOOL"
I wrote this:
"I could not agree with Notherhubbard more. I have met ee , once in london at an Soco AGM and once in malaysia. His contributions on this board and where he now posts, are 1005 GENUINE, he may be and can be a bit blunt , but what he writes is what he believes, nothing more nothing less.
He is not a bad golfer either!!"
Philip
Whose feeding ee with information ? Why are these hunches not available in the public domain? No smoke without fire and all that...................
In reply to Isaac, post #880
FFS I've just put my hunches in the public domain!!!!
Everyone surely knows by now that I have a habit of putting 2 and 2 together and making 4.93!???
The process is called deduction and involves reading between the lines of statements and events - it may be right or it may be miles off....only time will tell.
ee