This thread is intended solely as a place to discuss analysts' notes on SOCO.
Yes - thanks......it is unfortunate that typos can't be edited unless one realises almost immediately.
It is interesting to see the price backing off on low volumes in the last day or two - perhaps indicative that there are more people "playing the oil price" (which has also retreated) than one might expect? Calm before storm, IMO.....
UBS change in stance - Neutral from Buy - no idea of reasons or PT changes at the moment though.
Im guessing its due to "rise in the shares means less headroom".
The reason cited on the newswires will make you laugh...
UBS downgrades Soco International (SIA.LN) to neutral from buy on valuation grounds. "In our view the stock is now fairly valued, trading broadly in line with its risked NAV at a $79/bbl long-term oil price." Adds that with drilling catalysts limited to the second half, it sees no compelling near-term reasons to buy the stock. Has 1760p price target on the stock.
Cheers,
Mark
If 'weighted to H2' is not near term, then what is? Next week?
Adds that with drilling catalysts limited to the second half, it sees no compelling near-term reasons to buy the stock.
It does make you wonder about the health of the city ecosystem when analysts are focused on trying to find 2-3 month catalysts. Who or what has their primary audience become?
We are all scheduled to talk to Roger this pm at 4.30pm, any last minute requests or clarifications required email me on ed [at] stockopedia . co . uk.
Roger and I traded emails last night and he's certainly surprised at the weight and depth of questioning! We are aiming to have the audio live this evening and the transcription within another 24 hours.
It does make you wonder about the health of the city ecosystem when analysts are focused on trying to find 2-3 month catalysts. Who or what has their primary audience become?
Hedge funds, I think.....though there have always been FAR too many people focusing on the very near term in the CIty and trying to play the game of being smarter than the rest in dealing in and out of stocks (eg re the rise and fall of DNX during H2 last year). The idea that "nothing is happening until H2" is prevalent amongst the analysts....and is IMO a clear example of groupthink on their part. Morgan Stanley is the only exception AFAIAA, in having clearly stated (at £13-14) that it was better to be too early than too late!......
....and I suspect that the rest of the lazy sods will soon find out why ;-)
ee
ee,
For long-term buyers such as myself it simply provides another opportunity to buy, bought another 500 this morning which takes my average up to £13.50 now. Buy on the dips and hold for the remainder of this year is my strategy going forward.
ArtN
(looking forward to conference call this evening)
I think it is worth mentioning that one of the things Roger said in the phone interview was they did a poor job in managing expectations when drilling the E prospect.
I agree with Roger on this point. This also leads me to believe that this could be one of the main factors as to why the analyst community in general seem to be very cautious about Soco's drilling programme?
I personally think they will continue to be very cautious right through to results day from TGD at which point if the well is a success they will write as such and it it is not then will downgrade etc.
Whilst I am posting I should also mention that I am glad Roger talked about being upbeat with the fact that they will be drilling again after two years of doing pretty much nothing on the drill bit. This really is a big thumbs up for me as it is something that I have criticised them quite heavily for in the past.
This type of humility is pleasing and really makes me feel they have learnt a lot from their experiences with TGD and they are now ready to move forward.
I am very happy with todays Interview and I felt Roger came across very well.
ref Isac's comment above,
we need to be careful thtat just because it is Isaac and i have a predetermined opinion of him/her that we automatically give him the "thumbs down"
sometimes, and I will agree rarely he /she has a valuable contirution to make.
that is the value of bb's
p.s
i am not too god on capitals as it takes a bit hrder press on my keyboard and somehow it seems too difficult to correct. now if yoyucan read that it is 01 am here and it was too hard to correct, sorry
phil
Nomura raises price targets for:
Afren Plc to 138P from 130P
Cairn Energy PLC to 479P from 445P
Dana Petroleum PLC to 1617P from 1484P
Heritage Oil PLC to 629P from 606P
Premier Oil PLC to 1649P from 1525P
Soco International PLC to 1840P from 1765P
Tullow Oil PLC to 1495P from 1435P
Goldman Sachs upgrading to Buy, target 2,816 (they're using a platform of oil futures mixed with their own even higher peak oil prices).
Also upping TLW (1883) and highlighting DNX (2106) as top pick.
Thanks for that, Bohemia :-)
I was wondering why there was suddenly some market interest!
There should be a sharper price reaction on SOCO than some others, given the lower availability of stock. I believe that there will be a surprisingly-high* proportion of the convertibles put back in a few days time and I suspect that there will be further increases in analysts' estimates of fully-diluted NAV next week.
Incidentally, do you know where the convertible is trading at present?
*ie.....more than half - which will obviously surprise those who look at the convertible's market price and assume that the market is perfectly rational! ;-)
ee
Thanks. I knew it was pretty close (but above....hence the potential for surprise when the arb boys hand their holdings back ;-))
Morgna Stanley have also issued a note today:
Wait is almost over? Buy
Target is 1850p
Follows a:
"Reassuring salesforce presentation; a top pick in UK E&P's - maintain overweight
okay - overweight doesnt tally with the BUY in the title but....
Extract from the MS note...though some of us have been saying these things for a while ;-):
TGD-2X (Prospect ‘E’, Vietnam)
is a c.60-day well with a planned spud date around the
June 4/5. The announcement of the rig contract is
imminent. Management reiterated a high probability of
success – P50 is 100mb but added that the P10 is
c.200mb. Elsewhere, SOCO’s first well in the DRC is set
for a mid-July spud and coincides with an analyst visit.
Management confirmed assumed PoS of c. 30% and the
first result should be again in August with a second
back-to-back well completed 30-45 days later. A
farm-down continues to be considered by the board –
rather than simply cash, the key attraction for SOCO is
now a partner that offers strategic value.
Vietnam ‘blue sky’ scenario largely ignored? The
seven-well programme could de-risk over £15.50/sh of
upside assuming forward curve oil prices. In addition,
this does not incorporate the significant upside potential
from a fan channel structure on the TGD block (Vietnam)
– our base case is 30mn of net pay with potential up to
100mn. Success from the TGD-2X well should de-risk
the upside case.
Well funded ahead of put option expiry (May 16) –
Management assumes a 2/3 take-up on the convert.
Ummm, Goldman and Morgan both saying buy and people waking up to the story.
E&P strong across the board due to POO pick up on good economic data and receding worries over the Euro
Thanking an anonymous benefactor for copies of the notes, I notice the GS one has some basic, cut and paste type errors - mentioning Ghana and Uganda as stratgeic assets etc.
Working to a deadline I guess.
I notice the GS one has some basic, cut and paste type errors - mentioning Ghana and Uganda as strategic assets
Or perhaps GS are hearing elsewhere about possible "strategic value" deals arising from a farm down, as mentioned in the MS note ; )
Great to see the share price edging up towards the 52 week high at last.
