2012 Final results

11th Mar '13 by emptyend

111 comments 44597 reads

Results here:

The Directors are not recommending a payment of a dividend in respect of 2012 (2011 - nil). However, the Board expects to recommend a sustainable return of capital to shareholders during 2013, the level of which will be determined pending Hoang Long and Hoan Vu Joint Operating Companies' (HLHVJOC) approvals of a 2013 Work Programme and Budget for CNV and TGT and incorporating results of the upcoming capacity test of the floating production, storage and offloading vessel (FPSO).

....ie an ongoing dividend, not a one-off special dividend.

But not yet........which is consistent with my long-held expectation that a deal will be done before a dividend is actually paid.

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About the Author

Emptyend

Premium Member

111 comments

Samurai

14th Jun '13

Wasn't able to make AGM. Disappointed but not surprised that PV don't want to pay for liquids to date, cannot see how that can be resolved equitably or soon.

Re "ENI are apparently bringing on a "major gas/condensate field" that may extend into Marine XI " can anyone e identify which splodge on the map is the ENI field referred to?

Thanks for all the info and insights.

S

extrader

14th Jun '13

Hi samurai,

See slide 11 of yesterday's presentation.

ENI's area is Litchendjili (min.), which extends into our area if you believe in Litchendjili (max.).....

HTH

emptyend

14th Jun '13

Not sure if I got the same impression that they shut down questions or whisked away the board...very big contrast to the very formal AFR AGM on Tuesday with far few pi's and questions and much less friendly feel than the SIA one

The comment was a relative one, compared to many of the previous AGMs. I continue to find SOCO International (LON:SIA) management very user-friendly relative to the rest of the peer group. I wasn't a big fan of the lecture theatre setting though.

Don't think I recognise the idea that Afren (LON:AFR) is "much bigger"..... ;-) ......2012 net income was virtually identical, though SOCO's enterprise value is much lower (cash and no debt) so 2013 net income increases can be expected to have a much bigger impact - once the penny drops with the street.

Samurai

14th Jun '13

Thanks Extrader.

s

kenobi

17th Jun '13

I was interested in Ed's comment that after some non eventful years we are in for an exciting summer with Marine, H5 and CNV

We need to take these things with a pinch of salt, SOCO is a public company, and there is always the pressure at agm's to paint the best possible picture to keep people holding/ buying the shares. Does the above really hold any kind of water ? well 2 years ago, TGT had started production, dare I suggest this was a bigger deal ??? we were told that when phase 2 came on line production would be upto 90k , and they'd find a way of handling the production, nice problem to have etc.

Last year we were told that after problems with the partners they were now fully on side with production upgrades and of course TGT phase 2 was coming on line, wasn't this a bigger deal ?

There is still things happening this year, h5, and cnv 7p, and infill drilling and things in aftrica, but to categorise it as it's all happening now after a few quiet years, (in which tgt production has gone from zero to 60k ish ), doesn't seem quiet right to me.

Anyway, I'm not knocking them, it's part of the job to paint a picture of the progress and why it's worth being in the share. I don't want to dum down their excitement but the danger is that if you a generally optimistic chap (as I consider myself), if you come away litterally believing every word, reality 12 months later might be a little disappointing.

I look forward to drilling results or even a spudding announcement re H5

cheers K

emptyend

17th Jun '13

Fair points.

IMO we may well be in for an exciting summer - but not particularly for the reasons stated there...... ;-)

the danger is that if you a generally optimistic chap (as I consider myself), if you come away litterally believing every word, reality 12 months later might be a little disappointing.

One point that is frequently overlooked is that circumstances can change in a matter of days. Another point that is frequently overlooked is that, in the oil & gas industry, it is unusual for matters to be entirely within one company's control!

These factors are particularly important, IMO, when assessing management guidance during a period which has encompassed the aftermath of the financial crisis..... when the difficulty of getting all the partners and other parties to move in the same direction at the same time must have been unusually high.

kenobi

17th Jun '13

I don't disagree with any of the above, and some kind of sale could take place at any time, with the resevoir model developing, and the H5 drill coming up.

I'm really just saying that while there is exciting stuff flagged as coming up, I wouldn't say this is more dramatic than the last couple of years, UNLESS we're talking about some kind of asset sale (and no I'm not including cabinda in that !). That wasn't mentioned at the agm specifically, I think the statment made was after a couple of quieter years we've now got marine X, H5 and cnv p7 this year. Of course if Marine X and H5 come in that'll be great, the best year for a few years, It wasn't that many years back soco were touting their largest expo ever althought to be fair that was wildcat drilling, where as H5 is more of a known quantity.

I am not complaining, just saying that aside from a major deal, on the evidence of what was discussed as coming up (H5, 7P and X), this year doesn't seem that special compared to other years.

Although the big news for some will be the return of capital, looking forward to finding out how that might happen.

K

extrader

17th Jun '13

Hi kenobi,

Agree with your thesis that it's best to keep expectations down - and be agreeably surprised (perhaps) on the upside....!

To help keep expectations down, I think you'll find CNV 7 P is likely to be pushed back into Q1 2014 (if not already there) : ES mentioned in the post AGM chat that it had proved difficult to get all the partners to sign off in time and that they were likely to have missed/lost the drilling slot.

On eof the more interesting aspects for me of the AGM was the palpable nervousness at the possibility of WWF disruption/bad publicity......to me that seemed a pretty clear indicator that management /BoD are 'preparing for take-off' and don't want any last-minute glitches to deter a potential buyer....

Time will tell.

ATB

emptyend

17th Jun '13

IMO it wasn't that there was any particular nervousness...why should there be, given the corporate track record of trying to "do the right thing" by all involved? It would obviously have been very easy to walk away at lots of points - and for a minimal cost in write-downs - but I'm firmly of the view that the right thing is actually to stay there and try to reach a sensible solution on a way forward with all stakeholders, rather than holding to the view that no action ever in the park is the best thing for the wildlife. Since the Lake Edward hippo population has fallen by 98% in the last two decades (on the WWF's own figures) without any intervention at all by oil companies, it is completely clear that the local wildlife has very big problems - and the WWF strategem of blanket opposition to oil companies looks increasingly like tilting at windmills. Much better, IMO, to plot a course that takes the local human population along with the idea of some limited and highly-controlled development - and give the locals half a chance of an improved economy that dissuades them from poaching and militia activity.

That said, of course, 0.5% of assets is neither here nor there in the greater scheme of things - and they could easily be binned if they were ever a deal-breaker. The WWF should be very careful of what they claim to wish for!

kenobi

17th Jun '13

Hi Extrader,

Yes the nervousness re the wwf and the whole virunga issue was clear.
However I very much doubt it was anything to do with preparing for take off or anything like that, because if it were, wouldn't they just dump it ? or give the same comitment as total that they wouldn't explore withing the boundaries of the park ??

I saw this today, re VIrunga,

http://wwf.panda.org/wwf_news/?209082/World-Heritage-Committee-requests-cancelation-of-Virunga-oil-permits

Having said that, I agree a deal could happen at any time, and we could do without any bad publicity. I suspect they rue the day they got involved with block V, but who knows maybe it'll end up for the best,

K

emptyend

18th Jun '13

Whilst there may have been some mild surprise (amongst those unfamilar with "SW10's Law") that there has been no announcement as yet of the spudding at H5, I note that the status of the rig being used has changed from "modification" to "enroute" since last week....so the clock is ticking.

emptyend

20th Jun '13

H5 well now drilling....... TD by mid-July ......

kenobi

20th Jun '13

Great news,

lets hope for a good result !

4 weeks would put us at the 18th, so I guess that's about mid month, perhaps a day or two before that if we're lucky,

K

kenobi

20th Jun '13

to answer my own question 25-30 days

http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=20976230

the other 3 wells would be the wells to the east to tgt I assume ? looking for water and hoping not to find it as Ed Story put it,

K

adam

21st Jun '13

Disappointing spud timing if they are restricted into not being able to buy back shares.

emptyend

21st Jun '13

No reason (AFAIAA) for them to be restricted - for the next week or so, anyway.

adam

24th Jun '13

Are you not surprised then that no buy-back at these levels?

emptyend

24th Jun '13

Of course not.

The objective is to add value, not to jump in feet first - especially when there is damn all stock on offer.

OpeningBat

24th Jun '13

I had wondered about a share buyback given that back in December (http://www.investegate.co.uk/soco-international--sia-/rns/transaction-in-own-shares/201212211655022092U/) 350p may have been the trigger.

But no RNS today.

emptyend

25th Jun '13

As I said above - it isn't that surprising, given the limited volumes. Now..... if the shares lost another 10p today on volume of 1mn..... ;-)

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2012 Final results

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Emptyend

111 comments

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