Vietnam Assets

tiswas,

I bow to your superior knowledge I haven't checked the volumes, although I suppose if its rising on small volumes thats a good indication that it's in a good position to rocket on positive news

cheers K

K

This is a good reference for historic trade volumes.

http://www.investorease.com/company.php?disp=volume&order=0&epic=SIA

There is the question as to what volume is carried out on other exchanges, this information is just for the LSE.

So volumes could be a lot higher than we think, but I would be surprised if sufficient stock is available for the Insti's to pick up in any size at this late stage.

Previously I would have put reports like this one in the "incidental" thread, but frankly I think the news that ENI and Petrovietnam have signed a formal agreement is rather more relevant to the end game in Vietnam than it might seem on the face of it:

Rome, 21 January 2013 – The President and CEO of the Vietnamese national oil company PetroVietnam, Do Van Hau, and Eni CEO Paolo Scaroni signed a Memorandum of Understanding for the development of business opportunities in Vietnam and abroad, in Rome today. The agreement was signed after a meeting between Italian Prime Minister, Mario Monti, and the General Secretary of the Communist Party of Vietnam, Nguyen Phu Trong........

....Paolo Scaroni also discussed the development of Eni’s current operations in Vietnam and confirmed its favorable prospects due to the progressive strengthening of Eni's presence in the country, as well as its collaboration with the Vietnamese state company.

ps...well done to extrader for simultaneously covering the bases over on the incidental thread  ;-)

In reply to emptyend, post #229

Hi ee,

Belated New Year greetings !

I can't help thinking that ENI's just set up a structure that would allow it to offer a quid-pro-quo or two that might prove useful in getting the VietNamese 'on side' in any local negotiations.....

ATB

In reply to extrader, post #230

I am sorry if this is the wrong place for this message but I feel sure that you will excuse in the circumstances.

With great sadness I have to report that Davjo, your respected fellow contributor on these boards has passed away after a short illness.

The support and acknowledgement of his thoughtful and detailed appreciations echo'd here is a matter of some pride for his family.

If anyone feels moved to make personal reflections, please feel free to e-mail myself and I will make sure that the family are aware.

Prosper.

Peter Jones, Davids elder brother. peter@twitchen.co.uk

Hi Peter,

Very sorry for your loss. I'd never met him but Davjo had an amazing eye for investment and was only ever constructive to any discussion.

At a time when we all hope this investment that links many of us is about to come to fruition, it's a great shame he won't be here to see how it all pans out. But with the closing of the chapter there will be windfalls for many of us and I wonder if Davjo had a charity close to his heart that people could donate to in order to honour his contributions which may have shaped people's decision making and good fortune.

Just a thought.
My sympathies again,
JS123

In reply to jseth123, post #232

On behalf of Davjo's family may I say a heartfelt thank you for the quite staggering tribute in the form of 'rec's' and in particular to those who sent personal messages.

Most of the family will not have been aware of the esteem in which he was so clearly held by his fellow contributors and your reactions to his passing will be expressed in his ' folder of remembrance'. Perhaps that section will be listed as a PSA (Prophesy Sharing Agreement), he did enjoy a little levity after all.

Best wishes to all, Peter

P.S. For those who very kindly expressed a wish to make a donation to Davids nominated charity, "Cancer Research", the funeral directors will be pleased to receive them at :-

Co-operative Funeralcare 233 London Rd, Hastings, St Leonards-on-sea, East Sussex TN37 6LU

operations update just out,

can't be great judging by the share price reaction, down nearly 5% as I write,

http://www.investegate.co.uk/soco-international-(sia)/rns/operations-update/201302130700107400X/

K

looks like we'll still be here next year, waiting for the reserves update

Well I'm trying to understand these figures,

if we go with the most conservative figures, say 466 mb and recovery factor of 28% that would give, 130MB,
of which soco is entitled to 30% ish, so call it 40MB ? then we'd have to add on the cnv reserves, and adjust for whatever could be produced in the remaining licence time, and there is still uncertainty about the fill in drilling there.
(we need to consider other options, including the company's view that recovery factors might be upto 50%, however I'm just taking the lowest figures because I imagine that would be the starting point of anyone buying SOCO vietnam).
I don't suppose that the news about Angola is so terrible, but a little worrying that they are having to give extensions to the option to buy.

TGT production figures are sound, but we're only really getting to just under the 55k per day now, so doesn't appear that much progress has been made in increasing capacity of the fspo beyond it's boiler plate rating of 55k.

Maybe I've got it wrong, but this isn't the sort of result I was expecting based on what the management said at the last agm, I was expecting a somewhat better result (back in september for that matter). However it does say they will continue the monitoring work (unless I'm mistaken), so presumably they're thinking that with more data, and fill in/H5 drilling, the figures will increase.

K

The key point for me was the statement "adjustments if any at end of 2013". The word adjustments allows for upward & downward movement and end of 2013 for another year of the fields track record to be documented.

I did some quick maths and my estimation of the 2P recoverable WI number is ok but I dont know whats carried for CNV (ie total Vietman WI reserves was stated as 121.1mm as of 31st Dec 2011).

FH

Hi kenobi,

We're not much the wiser, are we ?

I'm somewhat underwhelmed by the amount/quality of disclosure relative to (I feel legitimate) post AGM expectations - and the complete silence re mooted dividend or other proposal for outing/realising value.

In the final analysis, what PI's and even II's think doesn't matter in the case of Soco, as emptyend might say it's down to management / BoD .......and ONE interested/convinced buyer.......

ATB

Kenobi, We seem to be trying to understand the figures-here is my maths & I used a 2P estimate as thats what's in the annual report:
TGT STOIIP range at present 466mm-958mm and recovery factor range 28-35%
Assuming (dangerous I know but no 2P info given) these are the P90/P10 end points then a rough estimation of 2P recoverable is 766*.315=241mmbbls
which is approximately a WI of 74mmbbls--short of the 121.1mmbbls 2P number held as of Dec 2011 for whole of Vietnam.Closer if one uses the higher recovery factors also quoted by SOCO.
They also say any reserves adjustments at end of 2013 if any. They sensibly did not use the word upgrades.

The key issue for me is the inability to get the auditors to commit to a better outcome(ie a 2P upgrade over existing figures) with such limited field production history,and likley per well recovery factors.
My hope is that 2013 will be spent demonstrating that the 121.1mm for whole of Vietnam is sound (so no "adjustments" at YE) however I fear that any reserves increases will come from moving 1C/2C into 1P/2P,rather than a large revision of the existing 2P number, so depending on what the contingencies are we will be into a normal cycle of yearly reserves adjustments going forward.

Just realised no mention of a divi either,

Just realised no mention of a divi either,

I don't think that's surprising - this is an operational update and a dividend would come under financial reporting.

Overall, it looks as though we'll have to sit and wait another year. When I wrote several months ago that I didn't expect a reserves update as soon as was being suggested on this board I was thinking "not until Q1/13", I wasn't quite expecting at end of 2013"!

No chance of a takeover being agreed (even if an approach is made) this year imo. Maybe ee will see it differently.

redhill

In reply to kenobi, post #236

Maybe I've got it wrong, but this isn't the sort of result I was expecting based on what the management said at the last agm, I was expecting a somewhat better result (back in september for that matter). 

Clearly the company could not get RPS to agree with their assessment of recovery factors - at least at this stage.

>>The key issue for me is the inability to get the auditors to commit to a better outcome(ie a 2P upgrade over existing figures) with such limited field production history,and likley per well recovery factors.

yes, and this is after extending the report from september/the fall to Feb the following year, to get more info/data, and unfortunately still a disappointing figure. Not sure how realistic it ever was that an audit would say a recovery factor would be 50%, but 28-35% is a fair way short of that.

In reply to peterg, post #242

Clearly the company could not get RPS to agree with their assessment of recovery factors - at least at this stage.

Yes agreed,  a little disappointed though given how bullish the management seemed about it at the agm.   It was never a good sign that it was taking so long to get the report,  but I was hoping that extra data gathered would be enough to convince the auditors of SOCO;s pov,  clearly it hasn't been. 

K

No mention of connectivity, so I guess the evidence isn't strong enough to convince auditors, perhaps not strong enough to convince the management given the extra data that has been collected, ?

K

flyinghorse

Thanks for your analysis - I was trying to do the same. Taking the average RPS estimate of STOIIP of 712 mm bbls + additional average undiscovered STOIIP of 102 mm bbls from block H5 gives a total of 814 mm bbls.

Using the average RPS recovery factor of 31.5% and SIA share of 28.5 % gives 73 mm bbls to SIA from TGT.

Applying the average SIA recovery factor of 47.5% to the 814 mm bbls STOIIP we get 110 mm bbls from TGT.

Assuming a value of US$ 15 / bbl and an exchange rate of £1 = US$ 1.55 and 350 million shares , the extra 37 mm bbls is worth about 100p per share.

However I find it frustrating and am dissppointed that after all this time the company is:

a) not able to re affirm and / or update us on the previous total 121 mm bbls of Vietnam reserves.
b) hsilent on the return of cash to shareholders