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 SW10Chap, post #1000
Does anyone know what Cindy Cagle is expected to bring to SOCO International (LON:SIA) as an executive director?
No. I'm inclined to assume it has something to do with an expectation of imminent major changes at the company, though exactly what changes are expected, and how her elevation to the board helps in that respect escapes me. Could there be tax implications?
SOCO announces that awards under the SOCO International plc Long Term Incentive Plan ("Awards") were made yesterday to the Executive Directors of the Company, Ed Story, Roger Cagle and Cynthia Cagle of 305,600, 229,200 and 156,300 ordinary shares of £0.05 each ("Shares"), respectively. On the date of the Awards, the market price of the Shares at the last closing was £3.597.
Tough couple of days at the office for Mrs Cagle...
In reply to SW10Chap, post #1000
Could that actually be the angle here? Perhaps it is to ensure Cagle family representation at the top table, at SIA plc if R.C. had to leave for some reason?
In reply to peterg, post #1002
Could there be tax implications?
Not for UK tax, though I suppose it is possible that there could be a US tax benefit. I'd be inclined to doubt it, however.
IMO peterg is by far the closest in this guessing game. Some of the other thoughts are a million miles off the mark, IMO.
Can these awards be granted in a close period?
I tend to think that there is a rather large contralto* standing patiently in the wings, all ready to come on stage. ISTM that CG's appointment is designed to provide her with a front row seat when the fat lady comes on to perform.
(* I originally wrote soprano, but then thought that word might be misinterpreted as being connected to Tony of that ilk)
In reply to jseth123, post #1007
Can these awards be granted in a close period?.
I would assume so, the structures under which these are awarded were set up years ago, and the awards don't involve any current decision - other than an assessment performance against benchmarks, so I can't see why a close period would prevent them being made.
a million quid for two days work.
there'd better be some jam for shareholders
In reply to peterg, post #1009
No they can't. There is no close period at present - or there wasn't yesterday anyway.........
Can you be outside a close period if you are discussing a sale of company with another party(/parties)?
Thanks for all the thoughts on this - it would be good to hear more from the company because, as things stand, it leaves me feeling a little uncomfortable.
I have no problem with a company deciding to elevate their VP of Finance to the Board, normally I would expect a statement to go with it explaining why the shareholders' company is going to benefit from the move - something like:
Something must have triggered this move now and I think Soco should be a little more transparent. Without transparency, the subsequent announcement of LTIP shares being awarded looks a little cosy.
If there really is a contralto standing in the wings then it could look even worse: if a Director of a company bought £562k of shares just before a significant announcement, and could reasonably be expected to have knowledge of that announcement, how would that look?
If there's a rational business logic to my benefit behind all this, then great - let the sunlight in.
SW10
It's all a bit uncomfortable, I'll agree with that. Clearly there is a lack of independence on the board at Soco which isn't a problem on the whole and is an inevitable side effect of the long and successful history the board have of working together and having control of so much of the shareholders register.
I am quite bullish on these moves as they seem quite quick and to be positioning the board members to get their snouts in the trough at just the right time. It might look a little obvious in retrospect if something happens but I'm sure they have advice to say its all above board. To be fair, I'd be willing to look like a bit of a mug in my final business act if it netted me an extra seven figures. Don't forget, RC and ES have "never taken a penny off the table"...
In summary - I don't like it, but I think the signals are good for shareholders.
In reply to jseth123, post #1012
There are more qualified people on this board than me to answer this but a quick Google reveals a distinction between a close period and a prohibited period.
http://fsahandbook.info/FSA/html/handbook/LR/9/Annex1#D593
I believe it is quite common in company takeovers for certain directors to be co-opted on to the new company board during the assimilation period!?
Just a thought.
Are we not getting excited here for nothing. The LTIP shares announcement is consistent with the same last year?
http://www.socointernational.co.uk/index.php?cID=268&cType=news
FH
I am not bothered about the share issue. I am just curious about why appoint her to the board now. It is not as if she is new on the scene. Ducks in rows comes to mind.
In reply to adam, post #1010
a million quid for two days work.
No, the LTIP share to CC have nothing to do with her being on the board or not. She would have got them regardless of her recent move to the board.
In reply to flyinghorse, post #1017
Are we not getting excited here for nothing. The LTIP shares announcement is consistent with the same last year?
http://www.socointernational.co.uk/index.php?cID=268&cType=news
How anticlimactic!
I can't help but think there is something in the fact that CC has moved on to the board out of the blue, and my suspicion is that it's something that will see the Cagles be well rewarded in short order. We'll only know in retrospect obviously.
Just a few comments:
IMO it is a trivial formality, designed to give more operational flexibility/security, especially in the sort of scenarios that we can expect to see.