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 davjo, post #938
AIUI the bits you have in brackets are your interpretation, not what has actually been said.
IMO "timing undetermined" means exactly that - and could be earlier as well as later than the indicated completion date (as it would be in my "early bid" theory). Similarly, I take a different view of what is implied by "form"...which is a much more open-ended expression than your interpretation implies.
FWIW I last asked 5 weeks ago when "something publishable" would be ready and was told "early December". Exactly what is published and when will IMO depend on:
a) what the CPR actually says
b) where matters stand in relation to any deal being discussed
c) macro factors in the sector/market
d) expectations for other newsflow (eg H5 well timing or indications regarding a distribution)
e) whether there are any "year-end" considerations (including option matters)
My guess is that something will be published on 6th or 13th December, if not earlier in conjunction with other news. If nothing is out by then, I'd think it will be in the New Year.
What is completely clear is that the release of important news will be very carefully planned, as it is a key element in the process of monetisation. Timing (and perhaps form) will depend on when it is thought the greatest positive impact will be achieved (so it won't, I hope, emerge on Christmas Eve ;-)).
Its more important to prove connectivity than to get a report out. With that in mind, it might have been possible in 6 months, it might have taken less (sept/fall), but if there really is the prospect of a deal based on the new figures, we might have 10% or more riding on the results. So, as far as I'm concerned, do all the work you need. get the best result you can for reserves, it might be our last chance !
I'm guessing much production from different zones and pressure comparison is going on.
My one reservation is that if it is going to take longer and into drilling H5, the management have put return of funds on the agenda in some form, and I would like to see this take place. (as I'm sure we all would)
K
Sorry for the OT question but can anyone remember what the Dana 2P reserves were at the time of the takeover by KNOC and roughly what % of them were developed and how much was gas?
Searching the stockopedia website for a reference doesn't come up with much. It looks like KNOC paid about $10/bbl for them but obviously this has little meaning if we don't know how much cappex was spent on them and what % was gas and which was oil etc. I'm just doing some research on takeovers and what sort of valuations they obtained.
Thanks in advance
Log
In reply to loglorry, post #944
Hi Log,
Can't really remember, though the follwing link is to their last set of results (27th Aug 2010): http://www.investegate.co.uk/Article.aspx?id=201008270700167448R.
One key point is that, unless I'm much mistaken, the bulk of their developed reserves were in the NS, where the terms are somewhat different to those of Soco's positions in VN, and so developed reserves are not worth as much.
Thanks PG I know cant compare apples with oranges but it is one large data point nonethekess.
In reply to loglorry, post #944
May be Dana's value based defence report against KNOC takeover may help you find a better answer:
http://www.dana-petroleum.com/Media-centre/Press-releases/2010/VALUE-BASED-DEFENCE---DANA-RESPONSE-TO-KNOC-OFFER/
Edit:
I can't find the reports referred to in the statement on their new website but I searched my laptop and found them. I've uploaded them to my dropbox account from where you can download them if you want to (the second pdf link is a massive 58.6MB but it goes into loads of details about the assets at the time of the takeover):
Dana Defence FINAL sterling 100908.pdf (4.2MB)
http://dl.dropbox.com/u/67161332/Dana%20Defence%20FINAL%20sterling%20100908.pdf
Dana Competent Person's Report September 2010 (58.6MB !)
http://dl.dropbox.com/u/67161332/Dana%20Competent%20Person%27s%20Report%20September%202010.pdf
In reply to redhill, post #939
Don't forget that revised timescales are as subject to delay as their original counterparts. The only way of breaking the cycle is to stop quoting time-estimates and so investors should be thankful if they hear nothing further before Valentine's Day.
Yep, that'd be about right. All the technology and processing power in the world, and we still can't tame the uncertainty of nature.
More seriously (and FWLIW), I'm a little more encouraged about the possibilities of the next few months and hope that the long-awaited value can be crystalized by a sale. I just hope the TMF video isn't a contra-indicator!
SW10
Of course the new year (ish), will be 6 months from the start of phase 2 and if they've proved up connectivity there or soon after, that might to some seem like the moment to offer SV for sale to interested parties. All speculation of course, I would suspect we might need 6 months production data from the point they ramped up production. which takes us to april fools day I would guess.
Truth is there's always going to be the next milestone or opportunity. The management will have to gauge when they are willing to trade in their hands because the value as seen by a buyer is close enough to the value they see.
It would be nice to see a deal done soon, but having waited all these years, I would hate to miss out on upside due to a rush to sell.
cheers K
In reply to SW10Chap, post #948
Nice to see you here again, SW10 :-)
I'd observe that this has much more to do with the uncertainty whenever a third party is involved rather than the uncertainty of nature. I think one can almost guarantee that putting a timescale on matters involving any third party (such as a consultant, as well as a drilling contractor) means you run the risk of being completely wrong in your expectation of timing.
Ultimately, however, a point may be reached where matters fall into management's own hands - and I think we'll know pretty swiftly if/when such a point is reached.
ee
ee
Ultimately, however, a point may be reached where matters fall into management's own hands - and I think we'll know pretty swiftly if/when such a point is reached.
Do you still have the sense that this will occur in December?
Thank you, Martin
In reply to shanklin100, post #951
ee
Have just seen your post on ADVFN which largely answers my question.
Best wishes, Martin
Have just seen your post on ADVFN which largely answers my question.
Dec 6th or 10th or January or February?
I thought if it wasn't going to be in December then the company 'would definitely hear from me'.
The CAGR goes down and down as the years roll by...
Buffy
Another article - stating the obvious re M&A.
whoops , sorry ee, you beat me to it, I notice that Roger is saying the company isn't for sale, perhaps they'll be sales soon, either after christmas, or as increasingly common, before Christmas !
http://www.businessweek.com/news/2012-11-18/soco-seen-as-next-target-after-coast-energy-bid-real-m-and-a
Cagle said in a Nov. 17 phone interview. “But clearly the for-sale shingle is not out on this company.”
I don't know, I think everything is for sale, and our Roger is being a little Coy !
Cheers K
In reply to kenobi, post #955
I don't know, I think everything is for sale, and our Roger is being a little Coy !
I agree, I don't have a For Sale board on my house, but if someone comes along and offers me enough money for it then I'd sell.
In reply to GreenRover, post #956
GR,
agreed, however, there does come a point, perhaps soon if they can proove connectivity and get a reserves update to reflect this, that the thing to do is put up a for sale board and drum up as much interest as possible. That is how phillips conoco went about selling the field next door and they got a good price, although to be fair it did take nearly 12 months to conclude the sale.
cheers K
K,
Totally agree with you, but If connectivity is proved then won't that greatly increase the the price that any offer would have to be before even being considered by the board?
ISTM that they want to get the extension finished and the lounge painted before they call the estate agents in no doubt.
However everything is for sale it's just the price. Actually its not his to sell it belongs to the shareholders - although he certainly has a lot of influence. I doubt if a decent bid was made he'd stand in its way though.
Although its annoying to see the share price below what we think the assets are worth its probably better to have our wealth in an inflation proof asset rather than cash while the money printing presses of the world crank out more and more dollars to inflate away excessive debts.
Log
This is from the header of this thread.
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.
The thread has been read by 136,940 investors however, the share price is half the price it was 5 years ago and is unmoved over the last two years.
I have not got a clue what it will do over the next year or two..up or down.
I have posted on the "The Next Coca Cola" thread with what I think is an outstanding growh share, yet over the past few weeks it has seen just 500 reads.
The stock market often does not make sense to me.
In reply to loglorry, post #959
log & gr,
I completely agree, we need to sort out the reserves upgrade, prove connectivity, and get the production history needed. I'm not for a second suggesting that we'd announce SV is for sale before that, nor indeed before they speak to those they consider to be interested parties. All I'm saying is that once that's all done and we've added all the value we can, (ok maybe h5 drilling will take place in parallel), why not announce it's for sale, it worked for the neighbours, they got a good price, there might be some who we don't know about that might be tempted. No harm putting a bit of pressure on those that we think might be interested.
If we cannot get the price that the management is after, then time to consider some of the other ideas that have been discussed here. Including floating a proportion of SV on an exchange somewhere as an income stream.
If there are other ventures that come up, even in vietnam, they should take place outside of SV, so they can be sold seperately at a later date if need be.
cheers K