2013 interims

Monday, Jul 22 2013 by
13

Thanks to Alphaville's reporting of Merrill's research piece today, we now have a date for the publication of the interims - which is 29th August.

Merrill also indicate their expectation that the planned distribution will be announced at the same time - and, frankly (after today's update), I can't see much likelihood of them wanting to publish the details of that any earlier ....and they've already told the AGM they won't leave it any later......

.....so I'm starting this thread for people to post details of matters they expect to be covered in the interims.

We will know by then the test results from TGT-10X and we should know whether Lideka East has anything worth testing. We may also have by then the gas sales agreements for TGT and CNV - and we should have the results of the volume implications of the splitting tests done on the wet gas from CNV. And I would think that we'll have the results of the latest round of FPSO testing, aimed at raising TGT capacity to 70-75k bopd.

What we won't know until Interims day is the extent of the cash position and the plans for the distribution. Alphaville today quote Merrill as saying:

we continue to believe the quantum of the dividend to be announced
with 1H13 Results on 29th Aug-’13 could surprise the market to the upside.

....as do I. .......So the question is "how much?"

My starting point is that they had $350mn cash at the end of May (per the AGM presentation). By the time that the end of August comes around, I'd guess that may have grown to c. $430mn (depending on timings of tax payments, drilling costs etc).....which would be about 85p per share.

I could see them paying out over 50p per share though, if they wanted to indicate they would maintain the payment at the same level in 2014, prudently they may want to pay 10-15% less than that.

Whatever the case, by the time we get to the start of September we could be looking at a much more positive scenario than has recently been the case - and IMO the market will start paying some keen attention ahead of the reserves reassessment which might emerge during Q4, given that they expect to complete the revised reservoir modelling by the end of September.

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SOCO International plc (SOCO) is a united Kingdom-based oil and gas exploration and production company. Its segments include South East Asia and Africa. It has field development, production and exploration interests in Vietnam, and exploration and appraisal interests in the Republic of Congo and Angola. In Vietnam, It’s Block 16-1 and Block 9-2 include the Te Giac Trang and Ca Ngu Vang Fields, which are located in shallow water in the Cuu Long Basin, near the Bach Ho Field. It holds working interest in Block 16-1 and Block 9-2 through its subsidiaries, SOCO Vietnam Ltd and OPECO Vietnam Limited. SOCO holds its interests in the Marine XI Block, located offshore Congo (Brazzaville) in the shallow water Lower Congo Basin, through its subsidiary, SOCO EPC. It holds working interest in the Mer Profonde Sud Block, offshore Congo (Brazzaville) through its subsidiary, SOCO Congo BEX Limited. SOCO's subsidiary, SOCO Cabinda Limited, holds participation interests in the Cabinda North Block. more »

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142 Posts on this Thread show/hide all

MadDutch 23rd Sep '13 123 of 142
2

In reply to post #77492

it's not Mike's job to do that.  I will do what I want, when and where I want and it is for you to complain there if you think I am wrong.

That's a job for the board if they wish to. and if I want to support Ed Story, our CEO, I will do so. It his business, not yours, to tell me not to support Soco on the FT.  

 

 

See more at: http://www.stockopedia.com/content/2013-interims-75430/?submitted=122#122

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MadDutch 23rd Sep '13 124 of 142
1

In reply to post #77501

ee, there is an important difference between me and a PR company; I do not expect to be paid. Indeed I would refuse payment if it was offered.

To quote Ed again; we have a unique investment in Soco.

Part of my intention in my original post was to discover whether there is a better investment in the world. 

I do not believe there is. A 10% dividend yield, leading to a doubling of the share price befoe it can equal Shell or BP's 5% yield, and 2 new, promising discoveries. 

A good advice to my old friend PM; 

"He who wispers down a well, 

about the things he wants to sell,

Will not make as many dollars

as he who climbs a tree .... and hollers!

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emptyend 23rd Sep '13 125 of 142
7

In reply to post #77506

"He who wispers down a well, 

about the things he wants to sell,

Will not make as many dollars

as he who climbs a tree .... and hollers!

True enough, of course (apart from the dodgy spelling ;-))

However, IMO it is a waste of time going out of one's way to requote management. The figures (and RNSs) should speak for themselves.

Personally I'm very much more interested in why various databases continue to show SOCO International (LON:SIA) as a zero yield stock when shareholders are being given the chance of a 40p dividend. Accordingly I have taken it up with two data providers so far (including the FT's) and will continue to pursue it. I'm not really interested in directly encouraging people who can't be bothered to do their own research - but I think that those who can should be entitled to expect data sources such as Reuters, Morningstar and the FT to be reliable and accurate.......and, at present, they are just downright misleading.

Every time I have to pull up such organisations about their poor data, it highlights the fact that their data simply can't be trusted. If they can "miss" the fact that a stock is yielding over 9% then frankly there is no point in anyone paying for their data!

ee

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redhill 23rd Sep '13 126 of 142
2

Personally I'm very much more interested in why various databases continue to show SOCO International (LON:SIA) as a zero yield stock when shareholders are being given the chance of a 40p dividend.

It would seem, as I think you may have said yourself, that the various databases are not set-up to accommodate an unusually structured payment such as Soco's. For example, I was pleased to find that Barclays Stockbrokers were showing in my account that my Soco holding went "Ex-div" on 26 September, but contradictorily when I look at their market data for Soco it shows the company as Zero Yield with ex-div date as N/A.

If the software's not set-up to cope I doubt they'll be rushing to change it, however misleading it may be to those who don't know the facts.

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nigelpm 23rd Sep '13 127 of 142

In reply to post #77501

Of course, but by company I was implying "employed on behalf of the company"

I'm not sure of the value of private investors posting how great Soco is as an investment (without backing it up) but each to their own

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nigelpm 23rd Sep '13 128 of 142

In reply to post #77503

Are you my old friend PM from HemScott days?

No.

 

It his business, not yours, to tell me not to support Soco on the FT.

 

Not strictly true.  Whilst he holds a huge amount more than I do, we both own part of the business.

You do as you please.  I think you are wasting your time though.

 

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emptyend 23rd Sep '13 129 of 142
2

In reply to post #77510

Good points of course, Redhill.

However, just because it doesn't fall neatly into the box marked "dividend" (at least in part because it was announced with the interims not the finals) that should not absolve databases from amending it. After all, a yield of nearly 10% being reported as 0% is a humungous error on a FTSE250 stock - and, if they aren't going to bother changing that, then where is their trigger point for taking action to protect the integrity of the data they are selling?. If it was one-hundredth of the size, then certainly I could see it wouldn't be material - but not in these circs!

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Fangorn 23rd Sep '13 130 of 142
3

In reply to post #77486

I am challenging all of you here, to post a better prospective oil company than Soco International

I'll take that challenge MadDutch

GKP, far better prospective prospects imo.

Let's revisit this in January/Feb 2014, post move to Official List, with 30-40,000bopd hitting the bottom line.
Current share price 203p/sh

F2

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nigelpm 24th Sep '13 131 of 142
1

Exactly Fangorn. The whole sector looks great value right now. Hence it really does depend what you mean by

"better prospective oil company"

There's plenty of them out there!

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emptyend 24th Sep '13 132 of 142
3

In reply to post #77519

....but not many that are returning as much to shareholders though.....

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nigelpm 24th Sep '13 133 of 142
1

In reply to post #77521

....but not many that are returning as much to shareholders though

 

Not at this time but that can all change once large scale production comes on stream (as we know from Soco) ;-)

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redhill 24th Sep '13 134 of 142
4

....but not many that are returning as much to shareholders though..... -

Exactly. On an attractive risk/reward basis I find it hard to see beyond Soco.

I own some GKP shares but the risk/reward balance there is completely different and I would never invest as high a proportion of my portfolio in such a risky company.

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nigelpm 24th Sep '13 135 of 142
1

In reply to post #77523

There's plenty of life out there beyond Soco. Yes, it's probably one of the better prospects but the sector as a whole is valuable right now. Once the M&A surge kicks in it might not matter what you hold ;-)

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emptyend 24th Sep '13 136 of 142
4

In reply to post #77524

Once the M&A surge kicks in it might not matter what you hold

As one of those who has predicted such a surge at least twice in the last decade, I would say that is very far from being the case! Although there have been a couple of flurries of M&A interest, the general picture has been that the companies that get taken out are those with assets that have largely been developed and put into production. Fortunately for shareholders here, SOCO International (LON:SIA) is now in that category (barring some dotting of i's and crossing of t's).

The only exceptions that come to mind are companies like Cove who rode the coattails of others to find massive resources and companies like Dominion who were bought out cheaply for their supposed analogous acreage off Kenya.

So...IMO...it very much DOES matter what you hold.

I'd also note that there is another factor which is important, even if you have potential world-class geology and/or existing proven assets/production.....and that is politics!  As can be seen from the coverage of yesterday's announcement by Centrica, political risk isn't confined to far-off places!  ;-)  And it must be said that, despite all the foot-dragging and bureaucracy, Vietnam has proven to be a vastly more stable political environment than many expected 15 years ago!

ee

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nigelpm 24th Sep '13 137 of 142
2

Apologies ee - I meant to say it might not matter what you hold (assuming it's producing oil and gas!)

Clearly, jam tomorrow exploration stocks aren't going to reap the rewards WHEN (not if) the majors come knocking.

 

There's huge amonuts of dross out there.

I'm thinking the likes of  in no particular order:

HOIL

GKP

SMDR

COP

GENL

OPHR

 

The prospects for each and every one of these is decent

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emptyend 24th Sep '13 138 of 142
3

In reply to post #77527

I'm thinking the likes of  in no particular order:

HOIL

GKP

SMDR

COP

GENL

OPHR

The prospects for each and every one of these is decent

....mmmm....that may be your view - but I can think of some very significant negatives in almost every case. In particular (and coming back to the MadDutch's assertion that SOCO International (LON:SIA) has no peers), none of them are paying material dividends and all of them (I think) still have very substantial ongoing commitments. And then there's the politics.......

I am in agreement with Ed Story's assertion that SOCO is in a league of its own. No other company has both the substantial payout commitment and the likelihood of strong reserves growth in the short-term. SOCO is never going to turn into "the next Tullow" - but then nobody wants it to....

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nigelpm 24th Sep '13 139 of 142
4

In reply to post #77529

I suppose the point I'm trying to make is pick a few from the sector and sit back and wait.

Whilst Soco remains my largest holding and probably short term will do very well I like to spread my risk across the sector.

Anyway.. given the number of thumbs down I'm clearly boring people so I'll leave it there. ;-)

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patterbu 24th Sep '13 140 of 142
2

In reply to post #77532

"I suppose the point I'm trying to make is pick a few from the sector and sit back and wait.

Whilst Soco remains my largest holding and probably short term will do very well I like to spread my risk across the sector.

Anyway.. given the number of thumbs down I'm clearly boring people so I'll leave it there. ;-) - See more at: http://www.stockopedia.com/content/2013-interims-75430/?comment=127#127"

not at all, the purpose of these boards is:
discussion
and that is about it in a nutshell!!!

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Fangorn 24th Sep '13 141 of 142

In reply to post #77527

Yep, I'd concur with most of those choices...GKP, Hoil, Genl and Ophir.
Haven't followed Salamander so cant comment - they're Thai focused?

Don't think COP will set the market on fire on bid front - too much political risk there at the moment as every Centamin Egypt shareholder knows... :)

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fuiseog 24th Sep '13 142 of 142
1

I'm surprised Coastal (CEO.l CEN.TSX) has not been mentioned? After all it did fend a $23 bid nearly a year ago, is currently ignoring a $22 approach, and has some very powerful shareholders.

But the weighing in my portfolio suggests there's nothing to touch SIA.



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