Incidental stuff

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21st May '09 by emptyend

1294 comments 413271 reads

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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Emptyend

Premium Member

1294 comments

emptyend

21st May '09

http://www.petroleumworld.com/story09052102.htm

Resource-rich Vietnam is to build its first university dedicated to training people to work in the oil and gas industry, the government said Thursday, as it ramps up production.

The university will be a unit of state-run Vietnam National Oil and Gas Group .....Expected to open in 2015, it will be able to train 17,000 students annually, it added

Two curious things about this story - first it is apparently going to train 17,000 a year .....that should be enough to keep most of the oil and gas labour market in Asia supplied??

Second it will actually be run by Petrovietnam, according to the article - which suggests that they'd better get a move on with some project sanctions so that the poor beggars who go into it in 2015 have a bunch of places to work when they come out!

Presumably the TGT government approval must really be pretty close now??

loglorry

1st Jun '09

I was thinking today about the up coming soco convertible bond put. I can't remember exacty when it is but I think it is soon. I used to work on a risk arb desk in the city and we used to specialise in delta hedging. This is where you buy a convertible and short tresuries against it (often with a CDS in place as well). You think short stock against the embedded call option within the covertible. If the stock rises you short more (at higher prices) and if it falls you buy some back. As time passes you extract money (espcially if prices are volatile).

As I understand it the bond will be put back to the company soon and so this sort of trading will probably no longer be worthwhile. If this is the case then threre might be quite a bit of short covering to close out the position although I'm not sure there will be as much as if the converitble was trading more in the money.

Also I suppose instos wanting exposure to soco might move from the convertible to the stock causing it to rally a bit too.

Just random thoughts!

Log

Beerio

1st Jun '09

The put date on the convertible isn't until 16/5/2010 so I think it's probably a bit early to be taking off shorts in anticipation of putting the ond back to the company.

emptyend

8th Jun '09

Torygraph mention in passing in a hot-off-the-press personal finance article:

http://www.telegraph.co.uk/finance/personalfinance/investing/5475939/Five-ways-to-profit-from-oil.html

Goldman Sachs, the city bank, has raised its forecast on the price that oil will reach by the end of 2009, which has already convinced many speculators to take the plunge. If you think that oil has further to go, however, there are still ways that you can benefit – rather than just fuming at the petrol pumps. Here are five ways to speculate on oil.......

2. Consider the minnows

BP and Shell may be the supertankers of the oil market, but you can also buy shares in other smaller companies which will also give you exposure to this market.

Many of them have already enjoyed healthy price rises, however, and you may feel that there is little scope for future gains. Tullow Oil and Soco International have recently seen huge rises in price. Dragon Oil and Bowleven are other possibilities in this sector.

Space-filling rubbish, IMO, especially when one sees the other stocks mentioned! ;-)

.....but there may be worse times to be having the AGM and seeing a bit of newsflow, given that presumably the article reflects the likelihood that some cash is looking for a home in the sector.

emptyend

9th Jun '09

Interesting to compare some of the metrics in today's HOIL deal with those for SOCO:

After the planned merger with GE, HOIL will (according to their presentation published today - discussed from here onwards http://www.stockopedia.com/forum/view/28787/hoil-miran-reserves-revenue-from-krg?comment=32#32 ) have the following:

2P reserves of 308mn boe
2009 production of 35,000 boepd, rising to 61,000 boepd in 2010
Contingent resources of around 280mn boe
A stake in a smallish refinery
....and a proforma enterprise value of about £3.75bn (based on current 625p share price and outstanding debt)

Updating the Annual Report figures for the latest ones: http://www.investegate.co.uk/Article.aspx?id=200905130700121378S .....SOCO currently has:

2P reserves of 148mn boe, probably with more to come when TGT Development Plans are approved
2009 production now running at 10,000+ boepd, rising to around 40,000 boepd when TGT comes onstream
Contingent resources probably in the same order as HeritaGE's - subject to confirmation from a further well on TGD
....and an enterprise value of around £980mn

I know which I'd rather have, especially when one considers the respective locations of the main assets and production. Hopefully there will be more flesh put on the bones re the outlook for reserves and production growth at tomorrow's AGM.

repobear

9th Jun '09

Hi ee,

Contingent resources probably in the same order as HeritaGE's - subject to confirmation from a further well on TGD

A further well in TGD would seem to be in order then;-) If successful it would do more than anything to close the value gap.

When cash is king, and borrowing money more difficult than at most times, the importance of cashflow should not be underestimated. How long will it be before SIA gets up to around 40k boepd? At the moment HOIL is clearly superior to SIA in this respect. and on that basis merits the fancier price tag.

The deal does show the potential though and in an improving oil price environment, Africa just about to kick off and Vietnam, not that far away from a deal, for anyone with a longer term perspective, Soco does offer relatively low risk and pretty high rewards.

Waiting for one of a portfolio of higher risk/ higher reward plays to do the business might just be a longer wait than waiting for Soco:-) The merits of such a a strategy have been discussed at length by participants here in another place, but actually sticking to the strategy over a period of several years after experiencing a few wipeouts isn't that easy emotionally. Waiting for Soco is a relatively easy game in comparison.

repobear

emptyend

9th Jun '09

Hi Repo,

A further well in TGD would seem to be in order then;-) If successful it would do more than anything to close the value gap.

Quite possibly - but it depends how big the valuation gap is. If the reprocessing suggests there is a massive fan there and they haven't drilled quite in the right places, then I'm pretty sure you're right. If, OTOH, the interpretation hasn't changed markedly (ie there is a large oil column at TGD consistent with original expectations and supporting the E South interpretation etc) then I'd think that management's original view at the last AGM (viz those who need to understand whats there will have no trouble doing so with existing data) may hold. I'd hope to get clearer on that tomorrow.

When cash is king, and borrowing money more difficult than at most times, the importance of cashflow should not be underestimated. How long will it be before SIA gets up to around 40k boepd? At the moment HOIL is clearly superior to SIA in this respect. and on that basis merits the fancier price tag.

I'm not sure that the word "clearly" can be applied. After all, there is considerable execution risk in the HOIL deal and it won't be completed for three months....and political risk considerations are non-trivial too. Re the length of time before SOCO produces 40k boepd, that probably won't be until production at TGT is under way (given that the field is slated for 100k boepd+).

Soco does offer relatively low risk and pretty high rewards.

Waiting for one of a portfolio of higher risk/ higher reward plays to do the business might just be a longer wait than waiting for Soco:-)

Yes - very fair comment. The grass always looks greener on the other side, especially when people think there isn't much happening.

rgds

Groundhog

9th Jun '09

More important for me at present than any analysis is this: how the hell am I going to get from Paddington to Appold Street tomorrow morning????????????

This is a SERIOUS question!

doverbeach

9th Jun '09

hi Groundhog,

here is a central London bus map. http://www.tfl.gov.uk/assets/downloads/central-london-bus-map.pdf I suggest from Padders you walk south to hit Hyde Park (hard to miss). Then you catch a no 8 or 25 bus along to Bank and walk north from there. Or a 55 to Old St and walk south from there. And leave plenty of time... it is a shame that the AGM starts at 10am this year - 11am would have been much better.

emptyend

12th Jun '09

New corporate broker announced:

SOCO International plc is pleased to announce the appointment of J.P. Morgan
Cazenove as its joint Corporate Broker with immediate effect. J.P. Morgan
Cazenove joins Merrill Lynch as the Company's joint brokers.

http://www.advfn.com/p.php?pid=nmona&cb=1244786736&article=38213011&symbol=L%5ESIA

....which implies that they have replaced Citicorp.

emptyend

12th Jun '09

In reply to emptyend (post #10)

Actually, I'm very interested to look back at the last piece of research I had from Citi, on which I notice that one of the disclosures says:

Citigroup Global Markets Limited is acting as joint corporate broker and joint financial advisor to Soco International Plc in relation to the sale of its assets to Sinochem Corporation

....which obviously verifies the press reports in recent months. Might also have been a case of "too much information", especially given the fact that there are four other less specific relationship disclosures in the same document?

emptyend

16th Jun '09

First decent day's volume for a long while today ....631k shares traded

In fact it was comfortably the highest daily volume for the last three months (about 50% more than any other day)....and was the highest for any day since last October!

Feels to me like someone is trying to hoover up whatever the sellers have at these sort of levels, given that some biggish trades this afternoon were clearly on the offered side. Not before time, of course.......

rhomboid

16th Jun '09

Evening all

coming late to this thread, I sold a chunk of physical stock today in the expectation that it'd move the price down so my SB company could lock in the same stock at a lower entry price, didn't work -market took my stock and didn't blink so gritted my teeth and paid up the premium for 'tax free' SB holding...best laid plans and all that.

djpreston

19th Jun '09

What the hell?

Okay one fat finger I can understand but why are RBCE and JEFF suddenly both bidding at 1560p !!!

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Emptyend

1294 comments

2. Consider the minnows

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