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 (SOCO) is an oil and gas exploration and production company. The Company's segments include South East Asia and Africa. It has field development and production interests in Vietnam, and exploration and appraisal interests in the Republic of Congo (Brazzaville) and Angola. In Vietnam, SOCO'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. SOCO 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. SOCO 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 »

LSE Price
111p
Change
-0.9%
Mkt Cap (£m)
371.8
P/E (fwd)
n/a
Yield (fwd)
2.1



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476 Posts on this Thread show/hide all

emptyend 22nd Feb '12 177 of 476
3

Came across a historical article from last year, that contains a few interesting snippets re the FPSO:

Inter alia, the project managers said that they were asked to raise the FPSO spec from 45,000bopd to 55,000bopd halfway though the project - which would tie in with the idea that different numbers for plateau were in circulation pre-production.

 

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unwise2 22nd Feb '12 178 of 476
5

In reply to emptyend, post #177


Inter alia, the project managers said that they were asked to raise the FPSO spec from 45,000bopd to 55,000bopd halfway though the project

There seems to be a misunderstanding of production numbers for TGT this year.  Phase 1 one is expected to reach 55,000bopd in the near future and Soco have stated phase 2 should have 40,000bopd productive capacity but given phase 2 is only tied back to phase 1 at the moment they aren't going to be able to put 95,000bopd through the FPSO, it might be capable of exceeding its offical stated capacity but it won't be 95,000bopd. To acheive 95,000bopd they are going to need a "bigger boat" or a new pipeline to other facilities, neither are likely to happen this year.

Regards

Unwise

 

 

 

 

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emptyend 22nd Feb '12 179 of 476
7

In reply to unwise2, post #178

at the moment they aren't going to be able to put 95,000bopd through the FPSO, it might be capable of exceeding its offical stated capacity but it won't be 95,000bopd.

Well - that is partly right ....in that they cannot put through 95,000 bopd "at the moment".

However, there is water handling capacity of 75,000 bopd on the FPSO and a big chunk of that can be converted (and then converted back when the water cut rises later in the field life). Chances are that this will be enough to accommodate the additional 40,000bopd - but until every section of every well/reservoir is tested (and the FPSO capacity tests can finally be done) they won't decide exactly how to handle the production; one option would be to tie in to Bach Ho and another option would be to hire another FPSO on a shorter-term basis than the Bumi TGT-1.

But you are likely correct that it won't be a "flick of the switch" to raise production to 95k and the ramp-up will again involve quite a bit of testing. And it might also be that expectations for TGD would have a bearing (as a commercial find there would mandate either a connection to Bach Ho or another FPSO).

Lots of moving parts in the short term - but should get much clearer in the next couple of months IMO.

ee

ps...there is also the possibility of other considerations at work (eg why would you invest in a new FPSO if you thought you may sell out to someone who already has one going spare?)

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MadDutch 22nd Feb '12 180 of 476

In reply to unwise2, post #178

Good point unwise.

How does the FSPO work? I had assumed it was no more than a 300,000 barrel tanker with some facility to liquefy the gas and store it for sale. Is that wrong?

If it is right, then why is it not a simple matter of using a larger diameter pipe to fill it? 

MD

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unwise2 22nd Feb '12 181 of 476

In reply to MadDutch, post #180


MadDutch

I'm no expert but I suspect it would involve a lot more work than a bigger pipe. Hopefully someone with more technical knowledge can answer your question.

Unwise

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Isaac 22nd Feb '12 182 of 476
4

Did the alarm clock go of this morning? Seems like someone woke up.....

Finally. Atleast it is going in the right direction................

It's so much easier to make money in a bull market, so if you want to make money find a bull market and hold.

Time for Soco to sell Soco...I smell euphoria....If Shell is bidding for Cove then the Sector is IN PLAY!

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compounder 22nd Feb '12 183 of 476
20

In reply to Isaac, post #182

Oh god, he's been on the sherry!

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djpreston 22nd Feb '12 184 of 476
7

Lol compounder.

Isaac, why is the sector in play because shell has bid for cove? Dragon is in for Bowleven, someone had approached Ithaca, many assets have been bought recently and many other bids as well.

Obviously the sector is most definitely in play, just surprised it's taken you so long to realise. R&D costs are higher than the per BBL values of reserves on the exchanges, so m&a is

Just wondering if you'll apply Isaac's law when soco had gone up 20%?.

Fund Management: European Wealth
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Isaac 22nd Feb '12 185 of 476

Darron

It has'nt taken me so long to realise _ I know as well as anyone else it has been in play....I just think it is significant that Shell is bidding for Cove. The majors are naturally cautious and tend not to bid in the market & have talked about in recent years of growing organically etc

So the fact that Shell is now bidding for Cove and Exxon is rumoured to be after GKP is quite significant IMO As it demonstrates the majors are prepared to drill on Wall St - A place where there is hardly a lack of buyers for good quality assets & as such are likely to pay a premium.

Shell being Shell have the ability to bid for exploration licences and win in most parts of the world if they wanted to.

The market clearly agrees with me of Shell's significance hence the reason for strong rises in various e+p stocks. As you say the sector has been in play for a while but the market has'nt fully reacted.

And no I don't plan to sell Soco for a 20% gain, the core holding will stay until the end game. That has been the strategy for sometime & I have always been very confident that it will work out in the end. If you bet big with reasonable risk and decent upside & it comes to plan one can make a sizeable sum - Only dillema of a bid now is there is not that much value in the markets.....

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thebuffoon 23rd Feb '12 186 of 476
15

And no I don't plan to sell Soco for a 20% gain, the core holding will stay until the end game

With one sentence you have plunged the Stocko community into despair.

Nice going..

Buffy

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tiswas 23rd Feb '12 187 of 476
7

I just hope that Isaac has a full medical team on standby when the results come out saying something along the lines of:

We are raking in cash faster than we can spend it on elephant polo and share buybacks. We are up to 55k bopd production on TGT, we have found a way of getting the several hundred million barrels of oil in TGD to flow and we have queues of people outside the front door wanting to make us an offer for everything!

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timpernel 23rd Feb '12 188 of 476
2

In reply to tiswas, post #187

I just hope that Isaac has a full medical team on standby

Personally I hope that he doesn't! ;-))

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Isaac 23rd Feb '12 189 of 476
1

Tiswas

I hope so. It is what I have been banging on about the last few years. Although I am keen to see Soco Sell, my main headache would be where to invest next as the bargains that were around 6 months ago are gone.

I guess it will be a case of waiting for an opportunity to present itself - Patience is a virtue whether you are invested or are looking to invest.

Brent is now $124 + $6 TGT prem. Soco are raking in the cash,. However the strong quick rise in the Oil price makes me sceptical as to whether it can last. It reminds me a lot about 2008 and $147 brent.

I'd rather be a seller in a strong rising market - No one can call the top - I think it is a case of knowing when you are happy with the price.

Uness there is an absolute strong case i.e. where the management is 99.99% certain of flowing TGD commercially within a reasonable time frame If I were Soco management I would calculate what Vietnam is worth based on $100 Oil (a price which I think is long term sustainable) then try and sell it.

A buyer may base their price on $110 Brent or $120brent etc & discount the reseves to come back to the same price as Soco are asking for. In such a scenario a deal being struck looks much more likely and appears more of a win-win situation.

Mind you at $124 Brent + $6 TGT prem we are talking about an almost 50% increase to the cash flow Soco suggested in their presentation at $90 Oil.

Amazing that the price is only up about 20% since it's low.

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Fangorn 23rd Feb '12 190 of 476
12

Seriously Isaac,

I can't believe you had the gall to write the following

"I guess it will be a case of waiting for an opportunity to present itself - Patience is a virtue whether you are invested or are looking to invest."

because Patience is not a virtue you've shown over the last six months with respect to Soco's management.

SIA will get sold, and it will be at a significant premium. The management know what they are doing. Just give it time. It's been a great opportunity to pick up shares on the cheap imv. :)

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peterg 23rd Feb '12 191 of 476
5

In reply to Fangorn, post #190

Patience is a virtue whether you are invested or are looking to invest.

I haven't laughed so much in months! I think I've strained a muscle in my side.

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Isaac 23rd Feb '12 192 of 476
2

Fangorn

I've held Soco for several years and in the last 6 months have not sold a single share, infact I bought more over that period.

The time to sell is NOW, it has been NOW for sometime imo.

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Fangorn 23rd Feb '12 193 of 476
5

I've also held SIA for years myself, unfortunately not the ones I bought at 33p.

If you were buying more shares over the last six months in Soco Isaac why the "Time to replace Soco management" thread? Waste of time, yours and everyone else's surely.

To be frank, I enjoy your musings(High Yield thread for example) but you're as patient as a five year old on Christmas day morning when it comes to Soco. :)

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rgf100 23rd Feb '12 194 of 476
3

SOCO: You'll come for the chances of massive capital gains - but you'll stay for the comedy . . .

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nigelpm 23rd Feb '12 195 of 476
3

In reply to Fangorn, post #193


To be frank, I enjoy your musings


And to think before that comment you were one of the posters I had a lot of time for ;-)

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Fangorn 23rd Feb '12 196 of 476
2

In reply to nigelpm, post #195

Doh - let me go get my second shovel whilst I try not spill the glass of merlot :)

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