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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About the Author

Emptyend

Premium Member

1294 comments

davjo

25th Apr '12

"I thought it was always clear that the 40k+ number was just a peak during testing."

In fact AIUI, 40k (plus 30mmscfd) was the original anticipated production rate as quoted by PV (and PTTEP), seemingly agreed to by Soco when the development plan was approved. The subsequent 55k figure was apparently 'agreed' since by the partners...which begs the question as to 'agreed' at what level? Hoang Long management or PV director level?

emptyend

25th Apr '12

In fact AIUI, 40k (plus 30mmscfd) was the original anticipated production rate as quoted by PV (and PTTEP), seemingly agreed to by Soco when the development plan was approved.

Welll that was true - but had long since been superseded - first by 45k and then by 55k. The figure of 40k emerged again when it was reached in testing shortly before a celebratory PV party, when it was trumpeted by the PV people.

The subsequent 55k figure was apparently 'agreed' since by the partners...which begs the question as to 'agreed' at what level? Hoang Long management or PV director level?

There is undoubtedly a "story" behind the change to the plan to get to 55k which led to the delays in perfing the Miocene. I suspect that we may not get to find out what it is - at least until we get to the point of an EGM!

Isaac

25th Apr '12

"I call investing the greatest business in the world because you never have to swing. You stand at the plate, the pitcher throws you General Motors at 47! U.S. Steel at 39! and nobody calls a strike on you. There's no penalty except opportunity lost. All day you wait for the pitch you like; then when the fielders are asleep, you step up and hit it. You wait for a pitch you like."

"The stock market is a no-called-strike game. You don't have to swing at everything -- you can wait for your pitch. The problem when you're a money manager is that your fans keep yelling, 'Swing, you bum!'"

http://www.fool.co.uk/news/investing/2012/04/24/buffett-on-baseball-and-investment.aspx?source=ufwflwlnk0000001

Soco is still pumping the black stuff. Brent is at $119/bbl. TGT Premium is still $6.5-8 consistently each month. The market cap is still close to £1bn. The cash is building everyday. By the time I wake up tommorow morning Soco would have pumped more crude & therefore generated more cash.

This scenario can't last forever, either Brent has to collapse or Soco's share price will have to rise to reflect the improving fundamentals, I am betting on the latter happening.......

emptyend

26th Apr '12

That is a good Buffett quote. I'm glad I'm not a money manager - though my wife gets impatient enough to replicate a small crowd at times ;-)

The coming weekend could be quite pivotal though....

kenobi

30th Apr '12

I have been away a few days, has there been any announcement about TGD ?

I would have thought that it was worthy of an RNS one way or the other, I see the share price has firmed up a few pence I wonder if this is on expectation of SOCO not drilling TGD ?

I guess it's possible they have decided to and they'll make an announcement in the morning ?

K

peterg

30th Apr '12

I have been away a few days, has there been any announcement about TGD ?

No. Though it's not reached the end of the month yet! I could start to speculate, but I could think of many reasons to justify a wide range of possible outcomes as to why they haven't yet, so the exercise is effectively pointless!

If there's no RNS tomorrow then I would be a little surprised.

emptyend

1st May '12

If there's no RNS tomorrow then I would be a little surprised.

Yup. And now that tomorrow has arrived, I am also surprised to see nothing, with 25 mins to go to the open.....

Mancman

1st May '12

Is not the most likely explanation that there is nothing to justify an RNS - no farm in and no extension to TGD?

emptyend

1st May '12

Some of us would certainly say that no extension to TGD would be material news. Remember that this is a prospect area that they have drilled twice and where they have proved substantial amounts of hydrocarbons in place.

Perhaps it may be dropped into the IMS sometime this week, but I'm surprised that it doesn't seem to merit a separate RNS, whatever the outcome (unless, of course, they are still waiting for the full facts/outcome from discussions in VN....which is a possible reason that would surely disappear by the end of today).

ps.....there are other possibilities too, involving coordination issues, but even I wouldn't say that they are especially likely.

MadDutch

1st May '12

eMail to Ed;

The TGD license expired yesterday; when will we have some news?

I ask because I am a shareholder controlling 37,000 shares. Ed will remember me in 2 ways; our chat about elephant polo before the 2010 AGM, and my asking for dividends at the 2011 AGM.

Soco is very important to the financial wealth of my family and friends.

Re TGD, I have full confidence in the board, whatever the decision.

emptyend

1st May '12

I understand that they didn't exercise the option to drill. If they had done so, then they would have issued an RNS.

The implication is that they couldn't get a farm-out deal over the finishing line.

I guess those who attend the AGM may be able to get a fuller picture?

Spurticus

1st May '12

Shame, I wish I'd paid more attention when the HLJOC relinquished this all those years ago, would have saved me some cash (& hairloss).

VN becomes a 'plumbing exercise' now - hard to see what further value SOCO can add there (TGT or CNV). And it removes an unknown from the range of possible NAVs, which can't be a bad thing.

tiswas

1st May '12

The implication is that they couldn't get a farm-out deal over the finishing line.

Hmm, if that is true then I am starting to get a little frustrated with our Directors. Could they have got a farm out with more time, if so why leave it to the last minute and have no alternative but to give it up?

Or were the terms simply not attractive enough for either party, or could no one be convinced that it was worth the risk in which case why have we hung on for so long?

Jeez, we must be due some good news sometime?

unwise2

1st May '12

I understand that they didn't exercise the option to drill. If they had done so, then they would have issued an RNS.

Have you had this confirmed from someone at Soco? Given the almost none existant comment on TGD in the annual report it isn't a huge surprise, but I am disappointed.

Unwise

emptyend

1st May '12

Yes - confirmed. Obviously in line with recent guidance too re not sole-risking again.

Re:

Hmm, if that is true then I am starting to get a little frustrated with our Directors. Could they have got a farm out with more time, if so why leave it to the last minute and have no alternative but to give it up?

Or were the terms simply not attractive enough for either party, or could no one be convinced that it was worth the risk in which case why have we hung on for so long?

I believe that discussions in various forms have been going on for months. The fact that the deadline has come and gone (despite discussions continuing until a late stage) suggests to me that there simply wasn't agreement on terms - and its not impossible to envisage why that might have been...though, as Unwise says, it is disappointing.

However, with an eye on the bigger picture, that may not be all bad. When it comes to the bigger picture, the Directors have a clear and strong interest in getting THAT right - and this may perhaps have been some impediment or distraction in the circumstances as they currently see them?

extrader

1st May '12

Hi ee,

So when do you think that Soco will let the rest of us know that TGD is 'off the table' ?

Common courtesy (apart from materiality) suggests that they should.

I wonder whether PetroVietNam's apparent 'footdragging' re TGT production build-up will now - coincidentally - dissipate somewhat ?

Where's a good conspiracy theorist when you need one ?!

ATB

peterg

1st May '12

Presumably in the IMS which is due soon.

emptyend

1st May '12

So when do you think that Soco will let the rest of us know that TGD is 'off the table'?
Common courtesy (apart from materiality) suggests that they should.

I was as surprised as anyone else that they didn't RNS it (hence my early enquiry) - though perhaps it really isn't considered "material" these days (with all the analysts having completely written it off etc). Personally I find it very odd, given the amount of time and money that has been poured into its assessment.

I imagine that it will be one of a number of items that will be covered in the IMS in the next week or two.

You make a good point, though, on the conspiracy theory angle - I don't think that there is much that (in isolation) I am prepared to take at face value at present...... I suspect that very many of the various "moving parts" on projects, production plans etc are in some way connected to one another.

Ultimately there is only going to be one outcome that matters....and that is the final destination, not the various sights that have been enjoyed on the (increasingly?) circuitous journey to get there.

kenobi

1st May '12

I must say that I'm disappointed not to get a final shot at tgd, but if the reshot siesmic wasn't promising enough to tempt in a farm in partner, then that could be why soco has let it go.
There is also the matter of the tgd costs not being recoverable against tgt production, which seems to have slipped in as an issue in the last extension, so a failure would turn out to be very expensive indeed for soco.

Does indeed seem that tgt and cnv are now just plumbing jobs, with a partner in no rush to upgrade the plumbing. But we just have to accept that and leave the management to progress this as well as they can, and do a deal to get the best value for vietnam. I would assume that now we have more production data we will be looking for a reserves report soon, which will hopefully provide an upgraded reserves figure which can be the basis for a deal. I would assume we only have data to do this for tgt p1, whether that will be enough or whether we have to wait until 2013 before doing a deal so we have some tgt p2 data time will tell.
I will be interested to hear soco's thoughts about a divi this year, given Mr Story's response to our own MD at the last AGM that he'd rather have his money in his pocket.

will also be interesting to see share price movements in the coming weeks, given the removal of uncertainty. I wonder if we will see any new opportunities turning up at soco or if they'll just sell up vietnam and leave a little african operation ?

Interesting times, I am disappointed that tgd didn't come off, I'm sure we all are. I fear for any implications re the relationship with PV, but it could just be that it was too big a punt for a smallish company to take. As for people thinking of farming in, if there is no competition perhaps they'd prefer to see the licence expire, and then get the licence themselves and dictate farm in terms themselves ? It might make sense for the eventual buyer of SV ?

oh well,

K

emptyend

1st May '12

There is also the matter of the tgd costs not being recoverable against tgt production, which seems to have slipped in as an issue in the last extension, so a failure would turn out to be very expensive indeed for soco

See my earlier comments and discussion on ADVFN in that regard - though that might have changed for future drilling (don't think so - but it is now hypothetical anyway).

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Incidental stuff

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Emptyend

1294 comments

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