NO TA ON THIS THREAD PLEASE - (edit) and no pointless speculations either!
I've created this thread just to park stuff in that is only tangentially-related to SOCO's interests and doesn't relate to any of the specific assets.
D'oh - of course,.
I was very interested to see the size of the UT though and then there was a sudden line up of decent orders after the UT. Most odd but then there was a v heavy vol day a day or so ago.
Note to self - lay off the coffee when you havent slept!
Some comments here re Quantic and SOCO (in the context of Cove Energy, to save people rereading unnecessarily): http://www.stockopedia.com/forum/view/28067/ma?comment=129#129
An intriguing discovery next door to Ca Ngu Vang :-
http://english.vietnamnet.vn/biz/2009/07/857145/
More oil in reserves discovered in Bach Ho Dong Bac – 19 exploratory drilling well
Vietsovpetro....announced a new oil discovery in the Bach Ho Dong Bac – 19 exploratory drilling well on July 2.
The initial findings showed that the reserves is 4,606 to 4,654m in depth and the average density of oil is 0.82 g/cm3 (40° API). The new oil reserves is an independent reserves and has no hydraulic link with the currently exploited oil reserves in the basement of Bach Ho field.
According to Tran Hoi, deputy general manager on geology of Vietsovpetro, the oil well is the artesian well of the highest hydraulic pressure among oil discoveries of Vietsovpetro in the past 28 years. On the drilling process, Vietsovpetro also found out Oligoxen-bearing seams on the sediment....
Note "Bach Ho Dong Bac" translates as :-
http://www.intellasia.net/news/articles/resources/111269091.shtml
The new well, called Bach Ho Northeast-19
I believe the basement crest of the northern dome of Bach Ho is reckoned to be around 3200m, so this discovery would appear to lie in the 'valley' between Bach Ho and CNV, an overall distance of perhaps 10 kms. The interesting bit is that CNV-4X encountered high pressure oil at a similar depth (to VietSov's discovery) in the Oligocene E sequence. In the event, IIRC, although black oil was recovered to surface, the Oligocene was found to be tight at that location. Soco did subsequently map the sequence as prospective though, but nothing has been heard since. Soco's 3D extended well into Block 9-1, so they may well have data covering this latest find.
Bit of a long shot but you never know ;-)
In addition, I see that a new gas pipeline from Su Tu Den and Su Tu Vang, exporting via Rang Dong/Bach Ho, has just come on stream.
http://www.saigon-gpdaily.com.vn/Business/2009/7/72756/
I wonder if they've agreed a fair price or are left in limbo too?
In reply to davjo (post #19)
I'm advised this discovery is pretty well where I suggested and within Soco's 3D coverage. Although closure is reckoned to be small and unlikely to extend into 9-2, the sands are said to be good and thick, these being F sequence, not E, so no direct analogy with sands overlying the present productive area of CNV basement. However, F sequence stuff in near proximity to the south and west within 9-2 is attracting Soco geologists' keen attention. Means very little at this point in time but it's always nice to have tantalising upside potential smack bang in the middle of such a prolific fairway...especially with regard to prospective asset purchasers lurking on the sidelines.
Re Su Tu Den/Vang gas, looks like they're in the same boat as Rang Dong i.e. first year or two's gas exported for free and then same price achieved as everyone else in Cuu Long Basin...the difference being that Soco got paid from day one, obviously in recognition of the enhanced terms of their particular contracts for gas. My guess, based on payment delays by other operators, is that Soco may have to wait another 6-12 months before finally settling any gas price formula. Not that this delay really matters that much as pricing is expected to be backdated.
In reply to davjo (post #20)
F sequence stuff in near proximity to the south and west within 9-2
I'm assuming here that you mean it is within the boundaries of the CNV area shown here, since the rest of 9-2 has been given up?
http://www.socointernational.co.uk/?id=area_vietnam
My guess, based on payment delays by other operators, is that Soco may have to wait another 6-12 months before finally settling any gas price formula. Not that this delay really matters that much as pricing is expected to be backdated.
IIRC not only does the finally-agreed price get to be backdated (as a matter of contract) but there is an explicit mechanism for agreeing the price in the event that PV (since one division does the buying of the gas and another does the selling, as SOCO's partner in CNV) can't agree a price internally, involving an external arbiter. I may be misremembering the details of how this works but, IIRC, PV had 12 months to agree a price once supply had commenced and then the independent expert process would kick in.
If that's true, then its worth noting that CNV started supplying gas on 25th July last year:
Wet gas separated offshore is transported to an onshore gas facility for further distribution to meet domestic demand of natural gas, LPG and condensate.
http://www.socointernational.co.uk/?entityType=NewsArticle&id=134&d=2008
It is my understanding that the gas supplied from CNV is being paid for currently at the rate of $1.20 per mmbtu. I'd guess that the final figure will be somewhat ahead of this (with backdated payments being made for the diference!), since Chevron's recently announced FEED study relates to a field development that is apparently only economic if the gas can be sold for something over $6 per mmbtu.
ee
Reuters headline just crossed "Canaccord Adams raises Soco International to hold from sell". Seems to be a sector note as many other companies are mentioned too, probably a revised price deck as everything seems to have been raised.
Cheers,
Mark
In reply to emptyend (post #21)
I'm assuming here that you mean it is within the boundaries of the CNV area shown here, since the rest of 9-2 has been given up?
Indeed! Judging from some old maps, it looks like there's a couple of additional fault blocks to the south of that into which 4X was drilled(D?), i.e. the small area coloured yellow on the map. The existence of these fault blocks no doubt explains the development area being extended to encompass them. As to retained acreage to the west of CNV, the seismic map on slide 17 of the 2002 Prelims Presentation appears to indicate a larger area than the various green oilfield "splodge" maps show.
Chevron's recently announced FEED study relates to a field development that is apparently only economic if the gas can be sold for something over $6 per mmbtu
Well $6+ would be very nice but I wouldn't personally pin too much hope on Soco achieving that because if Chevron's development is on par with BP's Viet project, they'll be shelling out the best part of $2bn to get it on the road. The interesting angle in Cuu Long though, is CLJOC's apparent lack of gas pricing mechanism in their fiscal terms. Stuffs them up somewhat in appraising and developing Su Tu Trang!! Master stroke (or likely stroke of luck) for Soco in having this covered in their terms, particularly in respect of Deep E gas, should it eventually come good. I wonder if PV's intransigence is influenced by setting a precedent for TGD gas?
In reply to davjo (post #23)
The existence of these fault blocks no doubt explains the development area being extended to encompass them.
Yup. Otherwise would be no logic to the wider area.
Well $6+ would be very nice but I wouldn't personally pin too much hope on Soco achieving that because if Chevron's development is on par with BP's Viet project, they'll be shelling out the best part of $2bn to get it on the road. The interesting angle in Cuu Long though, is CLJOC's apparent lack of gas pricing mechanism in their fiscal terms. Stuffs them up somewhat in appraising and developing Su Tu Trang!! Master stroke (or likely stroke of luck) for Soco in having this covered in their terms, particularly in respect of Deep E gas, should it eventually come good. I wonder if PV's intransigence is influenced by setting a precedent for TGD gas?
My thoughts exactly. One can't pin hopes on a Chevron precedent (even if they eventually get $6+) setting the price for everyone, especially for associated gas - but I'd guess that, once a precedent is set for a major project, if then becomes a clear benchmark for other major projects. Presumably, if PV won't pay what Chevron think they should for domestic supply then there may be an LNG alternative that gives better returns....providing that they can find enough gas in the area to make an LNG development economic. The danger for PV of continuing to fail to "come to the party" re gas prices is that it will make an LNG project for export more attractive (and may also marginalise smaller field developments that have a high gas component). I'd guess that by the time the deep TGD gas is produced, they will probably have had to set some clear benchmarks.
ee
There's a buy note out from Merrill this morning, in case you were wondering why the shares were up 4% in a flattish market.
Haven't yet seen it & doubt it says anything new for those of us who follow closely.
If it stimulates any interest amongst institutions then presumably the shares will move somewhat higher - volumes have been pitiful for months, as you know.....
ee
In reply to ArtNouveau (post #26)
As we know it is very difficult to time these things. There are a bunch of people who try to be smart in timing their entries and exits from E&P shares according to newsflow expectations....as reflected in Merrill's comments. But AFAICS Merrill are saying nothing new that hasn't been said here many times (certainly since the AGM presentation).
Despite the note, only 50,000 shares have traded in the first hour....which is about £350k a side. Anyone trying to make a significant (institutional) investment will, I suspect, need to pay up to get the liquidity. At some point it is clear that this will happen, because SOCO has drifted to the bottom of the peer group in valuation terms and there is, as Merrill will have noted, a stack of news coming in the next year (whether or not the bid firms up)..........but it is always difficult to say exactly when, because that depends on the actions of unknown third parties and on events.
Watchers of GKP will know this. Last week GKP struggled to get takers for a placing at 9p a share - and today they've claimed a major oil find and the shares are up 65% on the day at 21.5p. It is certainly possible to get too clever with matters of timing, even though the corollary is that there is often (and certainly has been with SOCO, on this occasion) plenty of thumb-twiddling for those of us who sit and wait.
ee
In reply to emptyend (post #27)
If got the report if anyone would like to email off board on this site or the Fool then please do and I'll pop to you. Price target is £16.50 which they've set as their base NAV.
Art - good service. Makes up for someone else being asleep on the job and letting their customers down!!
In reply to ArtNouveau (post #28)
See my Merrill comments in this new thread: http://www.stockopedia.com/forum/view/31202/analysts-reports
cheers
Lansdowne stake.....now reported as under 5%....
http://www.investegate.co.uk/Article.aspx?id=200908101209131653X
....however, they haven't sold a single share since the end of last year (per the AR). Shares in issue have gone up a bit, so their stake has come down.....
,,,simples.
FWIW
ee
In reply to emptyend (post #31)
No, you have got me there EE. Shares in issue 31/12/08 74,978,215 and lansdowne had 4901549 = 6.54%. As at a few days ago 75,350,323 in issue and lansdowne said gone sub 5% so must have a max of 3767516 shares so must have sold at least 1.15m?
In reply to tiswas (post #32)
...mmmmm....misread on my part. I read the 4,901,549 as being current.
Normally the current number is specified, so its odd and not very helpful for them not to do so.
The other aspect to this is, if 1.15mn shares have been sold, then they must be very patient sellers since LSE volumes have been between 80k and 220k per day since mid-June.......so if 1.15mn shares have been sold then that is equivalent to about 15 full days of sales!
If the shares haven't been sold in the market, then that would beg more questions.
I'll do some digging.
ee
[ps....serves me right for making assumptions and not getting my own calculator out - good spot tiswas]
In reply to emptyend (post #33)
Seems to have been part of a general rebalancing of smaller companies' portfolios by Lansdowne. They've held the shares from 225p (IIRC) so easy to see how things may have got out of whack. What is less easy to see though is where/when the trades were executed.......
ee
