Soco End game Timings and Price Targets

Tuesday, Aug 28 2012 by
1

It really does become difficullt to keep track of all the end game timings and various price targets. So I though I would keep track of them here :

ee reckons Soco will be sold for more then £6.60 :emptyend
28 Aug'12 - 11:45 - 9165 of 9172

loglorry think no more then £4.40


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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)
422p
Change
11.0  2.7%
P/E (fwd)
10.1
Yield (fwd)
4.4
Mkt Cap (£m)
1,364



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


80 Posts on this Thread show/hide all

adam 21st Dec '12 61 of 80
1

just announced the company bought back 50k shares @ £3.47.

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Asagi 21st Dec '12 62 of 80
1

just announced the company bought back 50k shares @ £3.47.

RNS here:

http://www.investegate.co.uk/soco-international-(sia)/rns/transaction-in-own-shares/201212211655022092U/

Not just me that was thinking they were beginning to look cheap again!

Asagi (long SIA)

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emptyend 21st Dec '12 63 of 80
2

In reply to extrader, post #60

With hindsight, I suppose we might have anticipated that there was unlikely to be any major price-moving news until personal tax-planning arrangements had been optimised...;->

As it happens, I've just dug out an email I sent someone on 5th December, after the board change was announced. Part of that read:

"I could see an option grant being followed by some director buying and some buybacks though – pending delivery of the reserves report……."

....so far, so good........  ;-)

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loglorry 23rd Dec '12 64 of 80
1

Strange time to restart the buy back - good to see company support at higher levels. I guess there can't be any offers in the wings though if the buy back is back on. Also I suppose they wanted to get the options grant to directors done at a lower share price. It could also have been an institution wanting to get out of the stock before year end and the company offering a bit of liquidity although from the RNS it did look like they were done on the open market at varying prices.

I do hope though that this isn't the directors idea of returning cash to shareholders as I doubt 50K shares purchased a day is quite what we had in mind. I don't want to start another boring debate on buy backs vs dividends though with that comment.

Log

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TomKe 24th Dec '12 65 of 80

Another 'ground hog' year over and the upside is hopefully that the company now regards an sp of £3.50 (£14.00) as the new 'floor'. Given the low point in the year was £2.60 (£10.40) we should be grateful as there still seems to be a steady low volume sellers market.

If I am getting frustrated at the lack of progress then just imagine what Pontoil (who own 24% of the company) are thinking.. They added another 1.2 million shares in June about the same time as my more modest 'top-up' - I said I would not buy any more!. I wonder what Soco represents to Pontoil, a 'punt' on a mid ranking E&P?

I had a look on Google to try to locate the results of Pontoil and drew a blank. As most companies in Europe are currently struggling if Pontoil have poor results it may make them want to liquidate their investment.

Another year ..sigh.
TomKe



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nigelpm 24th Dec '12 66 of 80
1


Another year ..sigh.


Sell then. Simple decision to take away the sighing.

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emptyend 26th Dec '12 67 of 80
4

In reply to TomKe, post #65

there still seems to be a steady low volume sellers market.

Really? Is that intended as a serious comment??????????? Optician time.....

If I am getting frustrated at the lack of progress then just imagine what Pontoil (who own 24% of the company) are thinking

I imagine that they are entirely relaxed about it. After all, they've added a few shares to their stake over recent years. Then again I often think that frustration levels are inversely correlated with stake size.....

As most companies in Europe are currently struggling if Pontoil have poor results it may make them want to liquidate their investment.

Another year ..sigh.

Wall to wall hogwash. Extrapolation from general European "struggling" to the particular case of a company that invested an ADDITIONAL £3mn or so in June (in addition to a substantial stake mostly held for 13 years) and suggesting that it implies they might be forced to liquidate???

I'll be making a New Year wish on your behalf.....

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kenobi 27th Dec '12 68 of 80

All the best to one and all for the new year, lets hope 2013 is THE year for SOCO !

K

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TomKe 27th Dec '12 69 of 80
9

Hi EE,
I see that you are your usual tolerant self and I would like to wish you a happy christmas too.

Seeking to understand Pontoil's rationale for holding and trying to understand their financial position is not 'hogwash'. Your post is heavy on invective but is light on facts.

I would like to understand Pontoil's strategy and their financial position which is one of the reason's why I posted. It could be that this knowledge is not in the public domian. Another reason was to record that another 'ground hog' year has passed.

TomKe

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emptyend 28th Dec '12 70 of 80
6

In reply to TomKe, post #69

Seeking to understand Pontoil's rationale for holding and trying to understand their financial position is not 'hogwash'. Your post is heavy on invective but is light on facts. I would like to understand Pontoil's strategy and their financial position which is one of the reason's why I posted. .....Another reason was to record that another 'ground hog' year has passed.

I saw nothing more than one rhetorical question in your post. It seemed pretty clear that the primary purpose for posting was the one you mention second.

Pontoil have been a holder ever since the Torobex deal brought in De Sousa and Maugein in mid-1999. They have generally raised their stake since (and also traded around a core, from time to time, taking advantage of forced sellers) and they have had Board representation for around 10 years.  In other words it is and always has been a core strategic holding (probably acquired as a hedge for refining inputs). Good luck with finding and interpreting the accounts of private companies in Italy.

Next time if you have questions then perhaps you would denote them in the usual way? And you can skip the obvious complete nonsense about "sellers markets" and speculating that the general problems in Europe will turn a particular strategic holder into a forced seller.

Incidentally, if they were to have been keen on selling then presumably we wouldn't have had any more "groundhog years" after about 2009?

ee

ps.......nice to know you have the upgraded version of my pathetic crystal ball - the one with added 20/20 hindsight

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TomKe 28th Dec '12 71 of 80
1

In reply to emptyend, post #70

Have a rec EE.

My crystal ball never works very well and when the sp was £24 it was predicting £40. I am, and have been for a few years now, a reluctant holder. I am holding because I believe there is unrealised value but I am curious as to why the market does not agree. I suspect that there are people at the table who are thinking the same as me and would also like to sell (at the right price).Pontoil's motivations are not established but they hold c24%, the Diectors have c8.5%,and the Estate of Patrick Maugein has c7% which comes to c40%.

I appreciate the comment made by one of the Director's (Ed Story?) that "Soco was not a lottery ticket" otherwise I would be a lot more nervous. There are positives, the main asset is producing, is in the right place in the world, and there are lots of NOC's looking to secure supplies. If Soco want to sell they should be able to find a buyer.

As we wait for a sale I would like to see Soco move to become a Dividend paying oil co and I hope that this would trigger a positive re-rating of the sp. I am not a fan of share buybacks though I understand the arguments. I would like the reason why Soco is regarded as an unattractive investment by the market to be addressed rather than propping up the sp with buybacks.

TomKe



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emptyend 28th Dec '12 72 of 80
10

In reply to TomKe, post #71

I would like the reason why Soco is regarded as an unattractive investment by the market to be addressed rather than propping up the sp with buybacks.

I am afraid you are completely misunderstanding the nature of your investment.

I am curious as to why the market does not agree

Perhaps one minor reason is that certain industry people (known to you, per previous comments over the years) have spend a fair amount of time enviously rubbishing it?

There are positives, the main asset is producing, is in the right place in the world, and there are lots of NOC's looking to secure supplies. If Soco want to sell they should be able to find a buyer.

Precisely....though you might have used "when" instead of "if".

 

ps....if the rec count is any guide to perceived relevance of comments, I should probably resolve to stop posting altogether in the New Year. People seem more interested in unresearched and completely unfounded speculation than in logical debate.

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loglorry 28th Dec '12 73 of 80
2

I'm not that sure the market has mis-priced it that much relative to its peer group. There is certainly a chance of some M&A premium and also extra for a reserve upgrade as well as some extra drilling that might result in even more upside. However if you look around at similar companies the market doesn't rate that sort of upside very heavily right now. The how market is very risk averse and would prefer to bid up US treasuries to very overpriced levels than to pay up for any speculative risk even if on a risk return basis they seem much more attractive.

So based on current 2P and current production levels and give the problems with capacity in the FPSO yet to be resolved it doesn't seem overpriced to me relative to its peer group. Things may change and there are good reasons to assume the upcoming reserves report will impress for those who have looked closely at the stock but right now the market doesn't give that much value. If anything Soco stock has had a pretty good run lately compared to its peer group.

Log


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emptyend 28th Dec '12 74 of 80
3

In reply to loglorry, post #73

If anything Soco stock has had a pretty good run lately compared to its peer group.

Yes that would be true - though apparently some people still apparently think it is a sellers market ;-/

I'm not that sure the market has mis-priced it that much relative to its peer group.

I also think that is fair comment - provided that you think the market has correctly understood exactly what it is trying to price!!

Excluding any upside from reserves assessment, M&A prospects, proving up the connectivity theory and drilling undrilled fault blocks, there is a case for thinking (under the guidance of analysts, who mostly ignore all of these issues in their pieces) that any undervaluation is relatively modest (most would still concede it is undervalued - but not by as much as it was 6 months back in relative terms).

However, that is rather like saying that Manchester United are just an average Premier League team if you ignore Ferguson, Rooney, Van Persie, Hernandez and Vidic.....ie it is meaningless.

IMO these things will start to come together in January. Its a pity that we've had to wait quite that long, but one could fairly argue that it was only the drilling of the development wells from the H4 platform in 2012 that uncovered most of these possible sources of upside (ie connectivity - which in turn drives the timetable of the reserves assessment and the timing of any deal).

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loglorry 28th Dec '12 75 of 80
4

All fair points ee but just about every stock I follow has a bull case where if a few events come to fruition it will make a material difference. The trick I suppose is knowing how likely these events are to become true and I think in SIA case quite likely although one never really knows.

The point I was trying to make is that at present the market is not paying much for this upside in this stock or in any other for that matter. This may change over time as well as perhaps some of the upside getting much more concrete.

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emptyend 28th Dec '12 76 of 80
2

In reply to loglorry, post #75

The point I was trying to make is that at present the market is not paying much for this upside in this stock or in any other for that matter. This may change over time as well as perhaps some of the upside getting much more concrete.

More concrete upside will make a very substantial difference IMO. SOCO has been in the market's "solid but dull" basket for several years (a position that has been more justified than we expected, with neither the Nganzi drilling campaign nor TGD living up to most peoples' hopes) - but that has been a rather better place than many of the other explorers!

Nothing is capable of changing the market's perception faster than a major reserves upgrade, though,.... and clear signals of corporate activity.

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emptyend 15th Mar '13 77 of 80

Tax planning 1.01 seems to have been a long while ago. The Cagles are now looking pretty slick, with their latest RNS.

Oh to be in that happy position  ;-)

ee

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kenobi 15th Mar '13 78 of 80
1

In reply to emptyend, post #77

ok, so they have moved 900k shares give or take, into a charitable foundation, all fine and dandy, my only thought is are these going to be sold ? or are they, knowing there will be a divi before long, giving shares to provide an income for this foundation ? in ball park terms this could be a couple of hundred k per year assuming just over 5% divi.

Obviously I'm not concerned what they do with their shares, but I guess near on a million shares is a pretty big chunk, also does tell us something about what they might think of the current soco valuation. If they're not too cheap for our foundation to sell, then they don't see them as ridiculously cheap, and clearly they can't believe there will be a deal along in a few months at a significant premium or they would have delayed surely ?

Mind you this is around 10% of their holding, so it's not as if they're selling out completely,

G

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emptyend 15th Mar '13 79 of 80
1

In reply to kenobi, post #78

also does tell us something about what they might think of the current soco valuation

Really?

A clear case of over-analysis....have a good lie down over the weekend. :-)

It tells you nothing at all, apart from the fact that they have taken tax advice.

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kenobi 15th Mar '13 80 of 80
1

.have a good lie down over the weekend. :-)

You're probably right, mind you as we don't even know the shares have been sold, it is clearly not telling us anything.

you have a good week end too ee,

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