Incidental stuff

Thursday, May 21 2009 by
25

NO TA ON THIS THREAD PLEASE - (edit) and no pointless speculations either!

I've created this thread just to park stuff in that is only tangentially-related to SOCO's interests and doesn't relate to any of the specific assets.


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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. The Company’s net entitlement volumes were approximately 15,500 barrels of oil equivalent per day. more »

Share Price (Full)
423p
Change
-3.0  -0.7%
P/E (fwd)
10.4
Yield (fwd)
4.2
Mkt Cap (£m)
1,404



  Is SOCO International fundamentally strong or weak? Find out More »


1286 Posts on this Thread show/hide all

shanklin100 25th Oct '12 1107 of 1286

In reply to kenobi, post #1106

kenobi

Thank you for your post. Interestingly IMHO, it is not necessarily the case that davjo expects £5.00 to be achievable. Hence my question as to what bottom-end number one could be confident in assuming no connectivity,,, ,,, and no disasters.

Cheers, Martin

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emptyend 25th Oct '12 1108 of 1286
8

Martin,

I do feel that is a superflous question. I gave the £6-8 range a long time back, well before the connectivity thesis emerged. At the depths of the financial crisis in 2009 I acknowledged that a deal might only realise c.550p per share for Vietnam, but the buy-backs and the sweep-up of the minority restored my floor to £6.

To repeat a calculation process I've given several times before, if you back-calculate from £6 a share and ignore everything outside Vietnam (and ignoring cash...even though it is substantial - though you can repeat the process and net cash off if you wish!) then that is fractionally under £2bn. Take £2bn, convert to USD at a conservative 1.60 and then divide by a conservative $20 per 2P bbl (per Perenco)....and you get to 160mn bbls of 2P in Vietnam as the number that is implied by £6 per share...compared to 121mn bbls reported at last year-end.....

That would be a 32% increase in 2P since the last revision in 2008. You'll have to make your own assessment of whether that a reasonable expectation in the light of:

  • greater areal extent of TGT, following 2009 PSDM reprocessing, since validated by multi-well drilling
  • indications that recovery rates could be 45-50% rather than the 30-35% assumption embedded in the 2008 analysis (according to dj)
  • 15 months production history from TGT H1 and 4 months production history from H4
  • apparent indications of connectivity within the TGT reservoir that have been evident over the last 9 months
  • finally getting credit (soon, honest...;-)) for CNV liquids production

 

I really can't be any clearer about my views and I think they are sufficiently conservative in the light of all the above - but the proof of the pudding will be revealed in the coming weeks by one means or another.  I'd simply note the comments of Ed Story in the RNS relating to the sweeping up of the minority.....

The Acquisition will be significantly value accretive, generating substantial future return for SOCO shareholders.

Couldn't be any clearer, IMO.

And, despite the pop on the day the sweeping up was announced - and the mathematical impact of the elimination of the 20% minority on asset values - I see that the shares have done precisely nothing since then in relation to the wider market:

....so go figure, as they say!

ee

 

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shanklin100 25th Oct '12 1109 of 1286

Many thanks ee

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emptyend 25th Oct '12 1110 of 1286
3

I've only just noticed that this was the "incidental" thread - which hardly applies to the posts above!

Turning to the more incidental matter of PTTEP's results today, I see

The Vietnam 16-1 project has successfully started production of the second wellhead platform of Te Giac Trang field. As a result, the project increased its production of crude oil from 41,000 BPD to approximately 55,000 BPD.

Not really news, of course - but a confirmation.

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djpreston 30th Oct '12 1111 of 1286
3

From Talisman's Q3 results:

http://cnrp.marketwire.com/cnrp_files/20121029-1030tlm_pr.pdf

In Vietnam, production has remained steady at an average of 2,000 bbls/d. The HST/HSD
development is progressing on schedule and on budget, with two jackets now installed and the
drilling rig on location. Pipeline tie-ins and development drilling are in progress. First production
is planned for the second half of 2013.

Fund Management: European Wealth
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loglorry 6th Nov '12 1112 of 1286

Dare I mention that Soco is at a 52 week high having broken the dreaded 350 ceiling at least for now anyway?



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kenobi 7th Nov '12 1113 of 1286

yes log, interesting movement lately, hope it continues to the point that the share price reflects the underlying value,

perhaps the end game is looking closer and this is getting people buying in looking for a takeout premium ?

K

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peterdm 7th Nov '12 1114 of 1286

Or people anticipating a return to investors announcement in December. Would be interesting if this run takes the share price over £4, even a 50-60% premium would then get us into realistic territory for a bid. Timing is everything !

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inaglasshouse 7th Nov '12 1115 of 1286
2

In reply to kenobi, post #1113

I imagine that today's movement is also related to the action over at Coastal Coastal Energy Co (LON:CEO)
http://www.investegate.co.uk/coastal-energy-co.-(ceo)/rns/response-to-trading-activity/201211070700074965Q/

Cheers, Richard.

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loglorry 7th Nov '12 1116 of 1286
1

Coastal in talks revealed last night too will help the region no doubt. Perhaps same bidder Pertamina who have some pretty big aspirations might be looking at Soco too - no doubt one of many. Obama in means more chance of the printing presses running which should support oil price too and commodity sector in general. Gold up quite strongly on the news. Lots of reasons to be cheerful and maybe the contents of the much anticipated reserves report might be leaking out a bit.

Log

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anteos 7th Nov '12 1117 of 1286
5

comment from Roger:

http://www.businessweek.com/news/2012-11-07/soco-rises-to-14-month-high-after-pertamina-bid-for-coastal

“I certainly know that many of those national companies have been in many data rooms in the very recent past,” Soco’s Chief Financial Officer Roger Cagle said today in a phone interview. “They are hungry for ensuring sovereign supply resources and I am kind of surprised more hasn’t happened on that front.”

He declined to say whether Soco has received any approaches.

“Many people in the analyst community always say that we are the target,” Cagle said. These “proxies for sovereign companies” may face hurdles in overseas expansion and “would prefer to stay close at home.”

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emptyend 14th Nov '12 1118 of 1286
5

OK.....hands up at the back all those who remember when I tried to interest Maynard Payton at TMF in the attractions of SOCO International (LON:SIA) !

Its a while ago now, when he was apparently running "Qualiport" so you can be excused for not remembering - but this is the exchange back in mid-2000 and this is what he has to say now in a slightly spooky TMF video........apparently he thinks "it is cheap".

Oddly enough, the accounting metrics are pretty similar to when I first drew SOCO to his attention 12 years ago, when he said in response to my puzzlement at his lack of interest:

...the circle of competence factor comes into play, and also the message it sends out the Foolish audience. I may be able to understand eventually the ins and outs of Oil E+P, but the decision may alienate readers who, after reading the UK Investment Guide and many other publications, are always told "not to touch oil prospectors in far away lands". We want to invest in and write about straightforward stuff that everyone can understand. If Oil E+P is, then fine. If not, then we won't.

[ee comment quoted] The case for SOCO, as I thought I had made clear, is essentially a value case for the medium/long term. It is not, IMHO, the sort of thing one should buy for a short-term flip (mainly because it doesn't move in line with the oil price but on a rather longer-term basis). I had thought that this was what Qualiport was about, rather than looking for short-term opportunities. [/ee comment]

If this is the case, then it would seem a few weeks/months delay isn't going to do much harm. We missed the absolute bottom anyway, and I've noticed the share price rising since you've posted. If it's a value case for the med/long term then waiting for the interim results due in September, to ensure things turn out as proposed, may be prudent. I'd rather be sure of a good result rather than rushing in the hope of a great one. Assuming I get to grips with SOCO in the mean time.

Still....perhaps better late than never?  Of course the shares have returned about 25% pa compound since the year 2000.....but then no doubt the short 12 year delay hasn't done much harm - especially as the shares apparently look more attractive now than they did back then  ;-)

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kenobi 14th Nov '12 1119 of 1286
3

http://www.bloomberg.com/news/2012-11-07/soco-rises-to-14-month-high-after-pertamina-bid-for-coastal.html

soco rises to 14 month high, after coastal bid,

“I certainly know that many of those national companies have been in many data rooms in the very recent past,” Soco’s Chief Financial Officer Roger Cagle said today in a phone interview. “They are hungry for ensuring sovereign supply resources and I am kind of surprised more hasn’t happened on that front.”

He declined to say whether Soco has received any approaches.

“Many people in the analyst community always say that we are the target,” Cagle said. These “proxies for sovereign companies” may face hurdles in overseas expansion and “would prefer to stay close at home.”

 

I would say it would be wise not to say if they've had any approaches,  whether they have or not, 

Cheers K

 

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peterg 14th Nov '12 1121 of 1286
7

In reply to adam, post #1120

I thought this was the Soco thread, Adam? I'm not sure what relevance your link is?

Ahh ... it's a shot at EE, how original! Sadly, I no longer have a price chart of Mayflower, but of course you are no doubt thinking that it went bust a few years later. I'm not quite sure what is so interesting about EE's post that you find it worth linking to? The fact that he clearly was invested in a company that went bust 4 years later, or the fact that he was clearly concerned at the fall in 2000 and unsure of the reason behind it?

My personal history in Mayflower is that EE's posts got me interested, and following on from that I did end up investing in Aug 2000, just before the post you link to, exiting a year later for a small profit, and then again in late 2002/early 2003, exiting for a profit again in Feb 2004 - so I have to add that I found EE's posts on the subject useful, otherwise I would probably have never invested (certainly not one of my best investments, and it's quite true I could easily have ended up with a loss - but a banked profit is a profit)!

Of course, as we now know the final demise was due to fraud with the accounts, and while we should all be on the look out for that, I doubt any of us could put our hands on our hearts and say we would have spotted it?

Peter

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adam 14th Nov '12 1122 of 1286
5

The reason for ees post was to have a dig at Maynard Payton and tell us all how clever he is.

 

Of course, as we now know the final demise was due to fraud with the accounts, and while we should all be on the look out for that, I doubt any of us could put our hands on our hearts and say we would have spotted it?


On the same thread to which I linked we have this from "m06een00" (message 240) posted on the same day 22/09/2000

Something smells strange, and I hope it's not dishonesty on the part of MFW.  [.......] I'm not going to average down, because somehow I just don't trust John Simpson.

 

message 244 by the same author was also quite perspicacious

Well I can recall a few years back where directors heavily bought their company's shares to support a flagging share price, where it transpired that the company was in dire straits, some months later. Most of them resigned. The company; CVS, and there are others.

http://www.globalarchive.ft.com/cb/cb_analysis_comp.htm?COMPID=S0800222 shows very optimistic forecasts for the next 2 years. If these figures come to fruition, then MFW is a steal now. I'm very tempted, but something's amiss somewhere, and it's not just down to bad sentiment. The degree and speed of the plummeting share price rings alarm bells for me! Somebody knows something is seriously adrift somewhere.

We all get things wrong from time to time and I think very poor form for emptyend to have a dig at Maynard Payton.

Perhaps he likes to dish it out more than he likes to get back though, eh?

 

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emptyend 14th Nov '12 1123 of 1286
9

In reply to adam, post #1122

The reason for ees post was to have a dig at Maynard Payton and tell us all how clever he is.

Not actually true. The reason was to point out that someone who was once strongly opposed to investing in the company that is the subject of this board had finally changed his mind. davjo and others will remember those exchanges very well, even if you plainly are bored by the reminder of them.  It is worth noting though that young Maynard now considers it worthy of a dedicated video on YouTube, even though it seems a bit alien to him.

Thanks for your posts and reminding me of your previous efforts, which I had completely forgotten about. I will therefore endeavour to ignore any further requests from you for information instead of making the mistake of bothering to post a helpful response.

If you wish to post anything further about Mayflower, please use a relevant thread such as this one, instead of bringing further irrelevancies into this thread.

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davjo 14th Nov '12 1124 of 1286
3

davjo and others will remember those exchanges very well

Ah, those were the days....not half as entertaining as the earlier exchanges with PYAD who remained steadfastly opposed to Soco as an investment though ;-)

 

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GreenRover 15th Nov '12 1125 of 1286
3

In reply to davjo, post #1124

Ah, those were the days....not half as entertaining as the earlier exchanges with PYAD who remained steadfastly opposed to Soco as an investment though ;-)

Not only that but he was also steadfast supporter of Lloyds Bank.

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loglorry 29th Nov '12 1126 of 1286
2

PTT Exploration Seeks as Much as $3.1 Billion in Rights Offering

http://www.investorvillage.com/smbd.asp?mb=11837&mn=19208&pt=msg&mid=12341133

Interesting.... Now where could they spend $3.1bn and boost production without having to do very much at all :-)

Log

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