Incidental stuff

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21st May '09 by emptyend

1294 comments 413271 reads

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.

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About the Author

Emptyend

Premium Member

1294 comments

emptyend

28th Jan '14

Still £65mn in it by some sources, but you are right that it is close.

Cairn, Premier and Tullow are all continuing to drift off - and I'm pretty sure this is because capital constraints are starting to bite. I don't think that the market now thinks it viable to expand mid-caps into FTSE100 mini-majors by exploring and then developing multiple finds! SOCO International (LON:SIA) were fortunately ahead of the curve here and have pretty well reached the end point in Vietnam without hitting capital constraints - but they have also been very impressively tight on capital alloocation....and that, IMO, has been the true differentiator. And it certainly validates SOCO International (LON:SIA) 's business model, IMO.

cheers

emptyend

13th Feb '14

SOCO International (LON:SIA) were fortunately ahead of the curve here and have pretty well reached the end point in Vietnam without hitting capital constraints - but they have also been very impressively tight on capital alloocation....and that, IMO, has been the true differentiator.

Spot the strategic similarities with ENI here and here

- strict capex discipline

- high margin barrels (with a focus on oil)

- robust growth in free cash flow

- focus on conventional asset base for superior cashflow generation

- shared interests in Congo, DRC and Vietnam

- looking to raise production by 500k boepd by 2017 (but only 350k boepd sanctioned so far internally)

So well-matched that I think they should be dating by now........ ;-)

extrader

13th Feb '14

Hi ee,

Given your comments, what price ENI paper (if we're so stuffed/ unsheltered that we can't take cash immediately !?)

ATB

I have in s/bets, ISA's and SIPP, but not all, unfortunately.

rhomboid1

13th Feb '14

This looks promising for Congo play;

"The exploration well, Nene Marine 3, which led to the important result, was drilled in a water depth of 28 meters and has encountered a significant wet gas and light oil accumulation in the pre-salt clastic sequence outlining a significant extension to the west of the reservoir and its hydraulic continuity.
San Donato Milanese (Milan), 13 February 2014 - Eni has made an important new exploration discovery in the Marine XII Block located approximately 17 kilometers offshore Congo.

The exploration well, Nene Marine 3, which led to the important result, was drilled in a water depth of 28 meters and has encountered a significant wet gas and light oil accumulation in the pre-salt clastic sequence outlining a significant extension to the west of the reservoir and its hydraulic continuity.

Nene Marine 3 is located 2 kilometers from the discovery well Nene Marine 1 and 4 kilometers from Nene Marine 2.

During the production test in the oil interval the well flowed over 5,000 barrels of oil per day at 36° API gravity.

Following the results of the well, Eni estimates that the discovery of Nene Marine field contains 1.2 billion barrels of oil and 30 billion cubic meters of gas in place. The overall potential of the Nene Marine and of the neighboring Litchjendilj Marine fields is estimated in about 2.5 billion barrels of oil equivalent in place.

The block also has a significant additional exploration upside which will be determined by the next exploratory and delineation campaign.

Eni, which holds 65% of the Marine XII Block, quickly activated with the joint venture’s partners New Age (25%) and the national company SNPC (Société Nationale des Pétroles du Congo, 10%) the studies to ensure a rapid commercial development of these significant hydrocarbon reserves with the aim of launching a first oil production from 2016.

Eni has been present in Congo since 1968 and today has an equity production of 105,000 barrels of oil per day in the country. Eni has been present in Sub-Saharan Africa since the 1960s and currently participates in exploration and production projects in Angola, Congo, Ghana, Gabon, Mozambique, Nigeria, Democratic Republic of Congo, Kenya and Liberia. Eni’s current operated production in the region is approximately 450,000 barrels of oil equivalent per day."

Cheers

emptyend

13th Feb '14

what price ENI paper

Well ENI is roughly in the middle of its 20% trading range for the last year or two - so it wouldn't be the end of the world. If an ENI were to bid, I'd think a paper alternative is quite likely - though would probably need to be on pretty attractive terms if it were to get much take-up in a "cash-is-king" world. Put another way, there would be dodgier majors to hold (especially with Libya shortfalls etc already in the price)

extrader

13th Feb '14

Hi ee,

Well ENI is roughly in the middle of its 20% trading range for the last year or two

Grateful if you could put some numbers (eg rating/yield/maturity) on that for us non ex-bond traders......? ;->

TIA

emptyend

13th Feb '14

Well I was talking about the equit y and its trading range!

From a bond perspective ENI has always rated on a par with the Italian state (historically due to the sovereign cap....and if that hadn't applied then often it would have rated more highly). Currently it is A/A3 rated but if you look at the ratings tab on this page you will see the history - it would have been the same as Italy pre-2008.....but now it is actually rated a couple of notches above Italy (as the rating agencies have dropped the concept of a fixed sovereign cap, because the largest international companies are better credits than the state - as Swiss investors worked out decades ago!).

Basically I would put ENI, TOTAL, Chevron and most other really big western oil companies on a par with each other, with the top of the tree being ExxonMobil and Shell.

FWIW.....which is absolutely nothing (for now at least).

extrader

13th Feb '14

Hi ee,

Thanks for the pricing info - and apols for not making clear what alternative to cash I was looking at !

I was under the impression that major oilco's often preferred to offer limited-life paper rather than shares in takeovers because the former weren't dilutive. In fact, I seem to remember taking some in settlement of a deal some 20 years ago and having to elect whether or not to encash on each interest rollover date....

Little difference, I suppose, from a tax planning perspective, but it's nice to be (well) paid while you wait......hang on, where've I heard that said recently ?;->

ATB

flyinghorse

8th Mar '14

I was reading an interesting article in the latest SPE JPT magazine about JX Nippon.

They state Vietnam is a core area. Japan only produces 0.4% or their required oil consumption (3.5mbopd) and 3% of their GAS with LNG imports making up the difference.

They have a 3 part E&P strategy
1)
expand reserves & production via exploration
Increase production to 200,000boepd by 2020
Invest $900mmusd in exploration activities.
2)Focus on core countries/core candidates or which Vietnam is one
3)Restructure business portfolio quickly-replace assets flexibly & efficiently

So they could be contenders for the assets in Vietnam

emptyend

31st Mar '14

Another purchase by the chairman - at £4 this time, having paid £3.85 last time.

ExTownie

31st Mar '14

Good to see.

O/T but if I was a Gulf Keystone shareholder, seeing the share price taking a battering, I would expect the management to be doing exactly that. Multi-millionaire directors, particularly Kozel who must have taken £100m+ from the company, sitting on their hands while shorters take hold doesn't inspire confidence....

emptyend

31st Mar '14

O/T but if I was a Gulf Keystone shareholder, seeing the share price taking a battering, I would expect the management to be doing exactly that.

I might just point out that if Gulf Keystone Petroleum (LON:GKP) were "in the market" for a deal of some sort then they might be in a close period.

Close periods are matters of extreme inconvenience at times - though of course Gulf Keystone Petroleum (LON:GKP) and SOCO International (LON:SIA) have both announced their results.

emptyend

1st Apr '14

Another 50k shares announced today - at 395p this time ("thanks Mr Market")

redhill

3rd Apr '14

Soco appoint new CFO

http://www.investegate.co.uk/soco-international--sia-/rns/appointment-of-chief-financial-officer/201404030700139176D/

Very interesting background including M&A, and has been working with Soco for some years:

Anya joins SOCO from Bank of America Merrill Lynch where she was a Managing Director in Mergers and Acquisitions ("M&A") with responsibility for the oil and gas sector. Anya has been with Bank of America Merrill Lynch since 2005, and has advised clients across the oil and gas sector, including SOCO, on a wide range of advisory, M&A and financing transactions. She originally advised on the sale of SOCO's Yemen assets in 2008, and subsequently on the sale of the Company's Thailand assets and the buyout of the minority partner in SOCO's Vietnam subsidiary. Prior to her employment with Bank of America Merrill Lynch, Anya worked in equity research and investment banking at UBS and started her career at KPMG. Anya holds a Master's Degree in Finance from the London Business School.

Roger Cagle will continue in his role as Deputy Chief Executive Officer and executive director on the board.

redhill

3rd Apr '14

Apologies as I see my post above duplicates an earlier one on another thread (however I'd suggest mine is on the correct thread......?)

:)

emptyend

3rd Apr '14

I did think about that Redhill - but deemed it to be more than merely incidental news barely related to SOCO (see my header!). Other thread here

redhill

3rd Apr '14

Hmm, fair enough, I agree about the appointment (hopefully) being more than incidental, but not sure it relates to Prelims either. Perhaps we need a M&A thread.................?

emptyend

3rd Apr '14

No it doesn't. It was just the most recent financial thread.

Its an imperfect world ;-)

Feel free to post it on my general sector M&A thread here

....we'll save the company one for another day ;-)

emptyend

23rd Apr '14

PTTEP have got their chequebook out, paying $1bn for Hess in Thailand

emptyend

28th Apr '14

I see that Ophir Energy (LON:OPHR) proposed a merger with Premier Oil (LON:PMO) - which was turned down.
http://www.investegate.co.uk/ophir-energy-plc--ophr-/rns/statement-regarding-premier-oil-plc/201404280700096023F/

....that ought to prompt some analyst comment on sector M&A?

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Incidental stuff

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Emptyend

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