Valuation, sentiment, and SP direction

Wednesday, Jun 17 2009 by
17

Detailed discussion of Soco's assets should take place on other threads, but this thread is to discuss the latest valuations both by ourselves and analysts, sentiment (ie will the shares go nowhere because there's not much upcoming news) and likely moves in the share price in the next six months.  How should the shares be valued?  How reasonable is it that any drilling without a firm commitment further than several months away is ignored by the market?

I haven't seen many recent analysts' reports on Soco, but I have one from Cazenove with a core NAV of 1370p and no doubt considerable explo NAV on top of that.  I imagine that's approximately concensus, but maybe with crude rising again these concensus NAV figures will start to rise.  Has anyone any other recent broker estimates?

My view, as stated elsewhere, remains that in the absence of much to get the market excited the shares will wander aimlessly for the rest of 2009.  I've previously guessed that if crude were $65 at Christmas 09, then Soco's SP would be somewhere near £13 then, and I'm still very happy with that guess.  What does anyone else think?

Of course unexpected bids and other events may overtake this, but these sort of events may happen to any company, and perhaps Soco (where management seem unlikely to accept bids since they believe there is considerable value not recognised by the market) is one of the less likely companies to be affected by the unexpected.  The key new news for Soco might be (a) a bid (IMO unlikely), (b) some sort of presentation by management of the drilling data they claim to have that demonstrates a significant strike has been made at E, currently ignored by the mkt, or (c) possibly hitting oil off the Congo.

 

Moderation note: posts will only be deleted from this thread by the site admins or by agreement from at least three of sirlurkalot, emptyend, djpreston and doverbeach.  If three of this list agree to delete a post, the names of those three and the reason for deletion will be noted in a post on this thread so everything's completely transparent.


Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


Do you like this Post?
Yes
No
23 thumbs up
6 thumbs down
Share this post with friends



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)
417.06p
Change
4.9  1.2%
P/E (fwd)
10.5
Yield (fwd)
4.2
Mkt Cap (£m)
1,369



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


1284 Posts on this Thread show/hide all

emptyend 26th Nov '12 965 of 1284
4

so far one has to acknowledge that horse was a better bet to put your money on.

Maybe so.....but I don't recall much discussion of the length of the race. Being ahead after 5 furlongs doesn't guarantee a win over a mile. Virtually all the recent 15% outperformance (since my July discussion at an OB with Rob) came in the first half of September - since when there has been nothing in it.

| Link | Share
swiper 26th Nov '12 966 of 1284
2

In reply to loglorry, post #964

I also remember some talk a while back about the opportunity cost of being in Soco with Sterling Resources being discussed as a great place to park your money.

Clearly with hindsight the time to be out of Soco has been the last few years - but hopefully that doesn't apply to the next few!

| Link | Share
loglorry 26th Nov '12 967 of 1284

No agreed the race is not over for either companies yet. It is nice to review these things now and then though.

| Link | Share
Spurticus 27th Nov '12 968 of 1284

Do we know if the "special dividend in December" is still being considered? Ok then.... How about the reserves report timings? December, right?
I suppose we still have the Marine XI spud, estimated "before the end of 2012".

With Soco, it's always nice to have something to look forward to :o)

| Link | Share | 1 reply
emptyend 27th Nov '12 969 of 1284
1

In reply to Spurticus, post #968

Do we know if the "special dividend in December" is still being considered?

I can't recall anyone suggesting that such a dividend would be paid. They may very well indicate in December that something would be paid in the New Year, but I don't think anyone has suggested more than that.

Ok then.... How about the reserves report timings? December, right?

According to my diary it is only 27th November today. Reserves report, IMO, would be released on 6th or 10th December - or in the first week of Jan.....but there has been no commitment about release timing. They might hold on to it until the prelims date - but I doubt it.


| Link | Share | 2 replies
Spurticus 27th Nov '12 970 of 1284
2

In reply to emptyend, post #969

I can't recall anyone suggesting that such a dividend would be paid.

Not making this stuff up... half-year results, RC in a Bloomberg interview: "Cagle said the company...will possibly consider a special dividend in December".

Yes, it's only November. But as nothing of any signficance has happened (yet), since August, I think it's reasonable to wonder what happened to this.

| Link | Share | 2 replies
emptyend 27th Nov '12 971 of 1284
6

In reply to Spurticus, post #970

RC in a Bloomberg interview: "Cagle said the company...will possibly consider a special dividend in December".

As I said...

I can't recall anyone suggesting that such a dividend would be paid. They may very well indicate in December that something would be paid in the New Year, but I don't think anyone has suggested more than that.

ie......."consider......in December"

I think it's reasonable to wonder what happened to this.

It would be "reasonable to wonder" if we get to early January without further comment.

| Link | Share
emptyend 28th Nov '12 972 of 1284
5

In reply to Spurticus, post #970

Regarding the possibility of the payment of a special dividend in December (with a decision to be taken in early December?), it is worth noting this article in the FT today - which suggests that the fears over the fiscal cliff in the USA are driving record numbers of US companies to pay special dividends before the end of December.

In that context, it is relevant to note that the two senior execs on the Board are both US citizens, who will not be oblivious to the potential tax advantages of a payout in the next month.

IMO such considerations make the payment of a special dividend more likely than I'd thought (even though they have said nothing on it yet!).

| Link | Share
D1G3Y 29th Nov '12 973 of 1284

Hi EE regarding the possible timelines around this I would imagine we would need to hear of any decission around this next week to enable an EGM with notice period etc then progress the payments to ensure they would be made this year.

The potential early Christmas present would be appreciated

| Link | Share | 1 reply
emptyend 29th Nov '12 974 of 1284

In reply to D1G3Y, post #973

TBH I'm not sure of the exact rules regarding special dividends. On a quick trawl, there are often EGMs - but then there are also often other matters involving restructurings, which can't be ruled out here either. The notice period for an EGM is 14 days, incidentally, per resolution 18 of the AGM. We'll see.

| Link | Share
redhill 29th Nov '12 975 of 1284
1

In reply to emptyend, post #969

They might hold on to it until the prelims date - but I doubt it.

I don't.

For reasons mentioned earlier, I still think announcing a reserves update with the prelims is quite plausible in the absence of any other catalyst in the meantime (such as M&A), which I think unlikely.

FWIW, just an opinion based on experience - I haven't attempted to extract any comment from the company on the matter.

| Link | Share | 1 reply
emptyend 29th Nov '12 976 of 1284
2

In reply to redhill, post #975

Hi redhill,

Actually I don't think that they have ever made a separate announcement about reserves - or even included the reserves numbers with the prelims. The reserves numbers have been published in the Annual Report - and thats all.

I haven't attempted to extract any comment from the company on the matter.

Neither have I - for the good reason that I wouldn't expect to be told anything.  I'm aware that some have enquired and that those enquiries haven't borne fruit. So I'm guessing. I'm guessing that the reserves update will be sufficiently material that it will warrant a separate announcement once it is finalised and approved and won't be buried in a larger announcement (unless that announcement deals with the future of the Vietnam assets).

All FWIW. It is all a guess at this juncture, especially over matters of precise timing (which is why, incidentally and IMO, the share price has tended recently to drift up towards the end of the week and fall back on Mondays).

ee

 

| Link | Share
kenobi 30th Nov '12 977 of 1284

well we're getting close to December, the last time I enquired I was told to expect the reserves update to be completed in December. I know others have been told early December, but as we have already seen these dates are fluid and they will want to get the right result even if it takes longer. So Realistically we could hear something in the next week or two, or as EE has suggested it might be the new year. I hope that the reserves review will be significant enough (in a good way), to warrant an announcement, which I would hope would lead to a significant re rating. Still I have Spanish blood and there, the gifts are bought in the new year by the kings, so if Santa doesn't bring us a gift, maybe the kings will oblidge.

is it too early to wish people merry christmas ? My little one has started decorating her room with a pink tree and christmas lights!

K

| Link | Share | 1 reply
peterg 30th Nov '12 978 of 1284
10

In reply to kenobi, post #977

is it too early to wish people merry christmas ?

Yes!!!

| Link | Share
djpreston 3rd Dec '12 979 of 1284

You grump, Peter.

My three lads have their rooms decorated with their trees set up, advent calendars all go...it's really starting to feel like Christmas chez Moi.
Just need Roger to leave a little present for me now.....

Fund Management: European Wealth
| Link | Share
kenobi 3rd Dec '12 980 of 1284
2


http://www.equities.com/news/headline-story?dt=2012-12-02&val=780606&cat=energy

Soco International, an oil explorer operating off of Vietnam, is turning into the next takeover target for Asian energy companies as PT Pertamina's bid for Coastal Energy Co accelerates the race for energy assets.

Lets hope Darren !

| Link | Share
kenobi 4th Dec '12 981 of 1284
9

I enquired today re the progress of the reserves review and when an announcement might be made, I am sure that they won't mind me sharing the response here.

The reserves review is running a bit longer than anticipated, but should be available in early January. There are no specific plans for an announcement outside of a normal release on other corporate issues.

So I guess we'll be waiting until next year, and it sounds like they might not announce the results unless there's something else to announce,  or perhaps with the interims or the results

cheers K

 

| Link | Share | 2 replies
jseth123 4th Dec '12 982 of 1284

I'd say that's promising re discussions with another party actually...

Although, no specific plans for release doesn't suggest the material doubling of reserves or anything?

| Link | Share
peterg 4th Dec '12 983 of 1284

In reply to kenobi, post #981

sounds like they might not announce the results unless there's something else to announce, or perhaps with the interims or the results

Thanks for that K, though I do hope we don't have to wait for the Interims to hear :-) Prelims, or nearby, might well prove to be the case though.

| Link | Share
emptyend 4th Dec '12 984 of 1284
1

In reply to kenobi, post #981

The reserves review is running a bit longer than anticipated, but should be available in early January. There are no specific plans for an announcement outside of a normal release on other corporate issues.

Very elegantly put, IMO........  ;-)

| Link | Share

What's your view on this thread? to Comment Now

 
 
You are feeling neutral

Use the £ sign in front of a ticker to turn £VOD into Vodafone PLC

You can track all @StockoChat comments via Twitter

 Are SOCO International's fundamentals sound as an investment? Find out More »





Stock Picking Tutorial Centre


Related Content
Analysts reports
Analysts reports
SOCO International 6th Aug '09


DRC  Congo K
DRC - Congo (K)
SOCO International 26th May '09




Stock Picking Simplified

Stockopedia takes your stock picking to the next level with cutting edge Stock Reports & Screening tools.


Get started
or Take a Tour to find out more.