Vietnam Assets

Monday, Jul 20 2009 by
16

This thread has been created to discuss the Vietnam assets. These currently consist of:

a) CNV - an operating field in block 9-2 with 155mn boe of gross 2P reserves

b) TGT - a field which is about to enter development. Gross 2p recoverable reserves of 300+mn boe (management think it will ultimately be closer to 500mn) should be confirmed soon, as the final government approval for the development plan is now very close.

c) TGD and the rest of the HPHT appraisal area - huge exploration potential of over 1bn boe P50 recoverable

d) VT appraisal area - a small discovery area likely to be relinquished

I'll fill in more details in due course.

ee


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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)
285.5p
Change
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P/E (fwd)
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Yield (fwd)
5.9
Mkt Cap (£m)
903.9



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470 Posts on this Thread show/hide all

redhill 4th Oct '13 451 of 470
3

In reply to nigelpm, post #447

PTTEP's view suggests a different attitude to SOCO, with no mention of raising production:

We've seen this before and I wonder whether a difference in attitude could be the elephant in the room regarding both increasing production and a sale? Would a potential purchaser of Soco's VN interests be comfortable with taking on such a partner as PTTEP who may not wish to produce to the same volume/timescales as either Soco or a purchaser?

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emptyend 4th Oct '13 452 of 470
6

In reply to ExTownie, post #450

PTTEP might be a possible buyer, I suppose, but the other thing to remember is that they are also a much larger company than SOCO International (LON:SIA)....market cap of roughly $21bn if I have my numbers right......so the fact that H5 rates a mention at all is of some significance.

PV never make formal statements of an RNS type - but may well say things in presentations in due course (judging from previous form). My understanding is that they are really quite excited by the Oligocene results in particular and wonder if it might give them a new play type in Vietnam to promote.....

I don't think that we're going to be around to see the actual start-up of production in H5 - but may well be around long enough to see what the plans are.

rgds

ee

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emptyend 4th Oct '13 453 of 470
4

In reply to redhill, post #451

It is no more in PTTEP's interest than in SOCO's to defer production (unless, in the very short term, perhaps ET's theory may be correct). They are all under the same licence - and between them own 59% of it.

Once the data is all in, I'd expect to see a pretty sensible production plan being put up - though I doubt we will hear much about that until the February prelims.

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redhill 4th Oct '13 454 of 470

Thanks ee.

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Gooseman 5th Nov '13 455 of 470
7

http://www.upstreamonline.com/epaper/article1342628.ece

Te Giac Trang satellite 'set for Spring sanction'

...Soco International chief operating officer Anthony Maris said that the explorer was looking to add another wellhead platform to the development.

“The H5 is the fifth fault block in the sequence, it’s a southern satellite to the existing field and we will be looking to put a new platform similar to what we already have on the field and tying it in over the next 18 months to two years,” Maris said.

“We’ll be going through the winter pulling together all the required documentation and approval processes that we need for both internal and Vietnamese government approval, and hopefully sanction the project early in the New Year, in March or April,” he said.

....preliminary development plans for the satellite expansion could see jacket and topsides construction in October 2014 and first oil in September 2015.


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kenobi 5th Nov '13 456 of 470
3

In reply to emptyend, post #452

I don't think that we're going to be around to see the actual start-up of production in H5 - but may well be around long enough to see what the plans are

Mind you there was a time that many thought we wouldn't see the start up of production of tgt, so lets just wait and see. Soco seem determined to get a good price for vietnam, lets hope that the new resevior model de risks the asset enough. To be honest, if they keep making progress and proving up the asset, I'm happy to hold. That approach obviously has risks, including opportunity risks.

K

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flyinghorse 5th Nov '13 457 of 470
4

In reply to kenobi, post #456

I do wonder if a sale of the whole company (Rather than just Vietnam) is now required/desired by management to trigger a "change of control" that would then see all the LTIP & option schemes crystallize?

FH

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emptyend 6th Nov '13 458 of 470
1

In reply to flyinghorse, post #457

FH,

Yes that is a good point. Though there is no reason why these things couldn't happen in closely-linked stages. And it is also true that the value of outstanding options/LTIPs relative to actual shares held is at an all-time low for the major players (probably only about 10% ish).

I think the odds have moved in favour of a whole company deal over the last year or two, but mainly because of management/board demographics rather than option positions.

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tiswas 6th Nov '13 459 of 470
1

So does the recent farm in make a whole company sale more, or less attractive to potential suitors?

Seems like more work for the buyer if his priority is production as he will presumably want to cover himself on what value he can achieve on any likely disposals of the exploration side before coming up with a sum of the parts bid price?

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tournesol 6th Nov '13 460 of 470
2

ISTM that the farm-in sends out a signal that anyone interested in buying the whole co in order to get hold of the Viet Nam assets could achieve a cleaner deal by moving in the near future rather than waiting. If Soco does more farm-ins or buys more early stage explo assets then a) they make the portfolio more difficult to integrate/rationalise and b) they spend cash. A predator would probably prefer to avoid bot those things.

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flyinghorse 6th Nov '13 461 of 470
3

In reply to tournesol, post #460

I think SOCO (often wondered what that stands for? Something Corporate?) will be hard to take out in a predatory manner unless its a stunning offer due to the distruibution/makeup of of share holders. (ie Unlike Venture & Dana who were hostile T/O).

The advantages of a mutual takeover would mean the ability to undertake full due diligence.
I think any offer will be proven reserves based so at the moment that's Vietnam and the rest is noise,albeit with some financial commitments.
I think you are right that the waters will get muddier as time goes by and no deal is done. The company has no choice but to keep moving forward rather than sit doing nothing with a for sale sign up. At least theres now a mechanism for outing value in place.

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emptyend 8th Nov '13 462 of 470
3

It is interesting to compare the flow test results on the TGT-10X well on the H5 fault block with the test results announced by Talisman in the Nam Con Son basin.....a total of 7,000bopd from three zones - all of which were much heavier than SOCO International (LON:SIA) 's recent test of 27,600bopd.

I'd say that Talisman's Vietnam business is in need of a big shot in the arm!

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emptyend 23rd Feb 463 of 470
2

Slide 16 ("page 14") from recent Talisman presentation, showing production at HST/HSD was only 8,000bopd for 2013 and is forecast stuck at 12,000 bopd for most of 2014 - suggesting that the capacity boost for FPSO testing is likely to have to come from TGT as HST/HSD doesn't seem likely to deliver as planned.

 

 

 

 

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extrader 23rd Feb 464 of 470
1

Hi ee,

On a glass half full basis, that means there's more capacity for our own production.....

On a glass half empty basis, is there any read-across for us in the reasons for Talisman's shortfall ?

ATB

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emptyend 23rd Feb 465 of 470
1

In reply to extrader, post #464

On a glass half empty basis, is there any read-across for us in the reasons for Talisman's shortfall ?

No. Not so far as I am aware anyway. Their fields are a quickly-depleting pimple piggy-backing on an elephant - though if you take their presentation slide at face value you will also see they think there is some upside based on their early production experience.

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flyinghorse 7th Apr 466 of 470
4

Small snippet on drilling challenges(Cementing/high pressure) & opportunities with new rig:
http://www.hlhvjoc.com.vn/hoanglong/en/news/content/410/2014-2015-hlhvjocs-rsquo-drilling-campaign-opportunities-and-challenges.html

FH

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ExTownie 7th Apr 467 of 470
2

FH - interesting thanks.

In 2013, HLHVJOCs’ successfully drilled and performed well testing operations on the TGT-10X. This was the key for the HLHVJOCs’ Management to turn the green light on for the construction of the Production Platform for TGT-H5 structure.

I assume that they need to have decided between using an FPSO and a tie-in before constructing this production platform?

ET

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emptyend 28th Oct 468 of 470
5

Article from 7th Sept that I've just noticed:

Construction of the H5-WHP (wellhead platform) jacket and drilling deck is complete. Offshore installation of the platform should be completed soon, with the jackup Naga 2 due to start drilling the five initial planned wells from mid-September onward.

Production will be tied-in to the FPSO serving TGT via a pipeline from the H5 WHP to the H1 WHP.

The FPSO’s oil throughput remains contractually limited to up to 40,000 b/d of its 55,000 b/d capacity. De-bottlenecking of the facility and increasing TGT production are therefore priorities for the partners.

However, a delay to this year’s drilling program has forced operational planning changes, the main one being to accelerate testing of the FPSO’s total liquids (oil and water) handling capacity.

The test program in July successfully confirmed an increase to around 140,000 b/d of liquids. It also confirmed minor additional modifications are needed to increase the capacity to more than 160,000 b/d.

IIRC the previous total fluids capacity was 125,000....so if they can both raise the total fluids capacity and convert some capacity to oil then perhaps production can be raised sooner than expected?


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peterg 28th Oct 469 of 470

In reply to emptyend, post #468

Thanks, ee - good find. I'm a little bemused why a delay to this year's drilling program (and presumably lower potential production, which I'd understood was a reason for hold ups in capacity testing) is now given as being a factor that "forced" accelerated testing of fluid capacity?

Good news though, and it must certainly be a marker, as you say, for useful increases in oil production once they get the wells sorted.

Peter

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emptyend 28th Oct 470 of 470
1

In reply to peterg, post #469

Hi Peter,

My guess is that if they'd drilled up more then they may have gone for a pipeline connection earlier and by-passed the FPSO. Or the journo may have it wrong. Or something else.

Or perhaps additional testing has been forced by the commercial reality that unless the FPSO operator "gets with the programme" on capacity, then he will struggle to get the contract rolled over? 

Perhaps the IMS will tell us.

rgds

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