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 »

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2.1



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476 Posts on this Thread show/hide all

emptyend 15th Nov '09 17 of 476

In reply to kobb33 (post #16)

If you want to see ramping and deramping in action go to http://www.lse.co.uk/ and watch the Tower forum. Prior to Iti 1 was the most disgraceful exhibition I've seen yet.

Over here and elsewhere we were always pretty clear that, in relative terms at least, TRP was over-valued! There's no interest in ramping SIA round here - but it IS merely a question of time in VN (and if we could predict exactly when then we'd all be rich!). Actually that isn't quite the whole story......

....because it is a question of time AND money! If buyers wish to wait for greater certainty, then that will undoubtedly come with a greater price (relative to whatever the assets at the time are considered to be worth).

ee

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Isaac 15th Nov '09 18 of 476
5

emptyend,

If a bidder has waited this long what is wrong with waiting another 3-6 months to drill a well? You pay more for certainty that is for sure but when you have already had 2 wells that have not been commercial surely it is wise to just wait for this next well before making a move ?

Why has Soco never revealed anything on the potential bidder ?

Why do you think Soco are keeping "low key" - the TGD dril in Feb? Also how comes you are now saying March? Where did you hear March from ?

Why has the company chosen not to reveal anything regarding TGD ? What are the possible reasons ?

How do you know Institutional Investors are returning on the quiet?

Hopefully we will see some results on Viodo this week.

Putting it milldly Soco has had a Sh1t year in terms of Share price performance compared to the wider market. But next year will be different, that I'm sure of.

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emptyend 15th Nov '09 19 of 476
11

In reply to Isaac (post #18)

Sigh. Life is just too short.

ee

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Isaac 15th Nov '09 20 of 476
19

Sigh. Life is just too short.

Damn right. It is why it is bloody frustrating the time taking to realise the value from Vietnam. As i said before we would have made alot more money if they just sold up a year or even two back and not entered TGD when Oil prices we very favorable.

All those lost profits the past year from the general stock market. And not forgetting the time value of money etc.

Sirlurk, Beerpig etc did very well.

People like me and you are well behind the curve and have no option but to wait for these people to sell up.

I hope the management does not take any bonuses this year. They may get a good well result from Viodo but that in my books is not justification to take a bonus.

The last 2 years have been a complete waste of time and we won't get that back. It's gone forever. Life indeed is too short.

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extrader 16th Nov '09 21 of 476
1

Evening all,

I think the quotation you're thinking of is "life is too short to be small"....

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tournesol 16th Nov '09 22 of 476
7

People like me and you are well behind the curve

Well, yes and no.......

 

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dangersimpson 16th Nov '09 23 of 476
4

ee,

Why it would be in Soco or JPM's interest to keep things low key if there really was any further expressions of interest? I'd guess they would be keen to get the drill bit into TGD before any real negotiations start but with the directors' holdings a hostile bid wouldn't suceed so there'd be no point in playing things down. Since it comes down to a company offering what the Soco directors believe it is worth they can just say no and don't need to spend time trying to prevent an opportunistic bid.

I personally reckon JPM are just waiting for Viodo, brokers generally don't like to look stupid getting a short term price movement wrong even if its due to an unexpected result...although nobody seems to have explained that to Citi when they issued a friday sell rec a few weeks ago when Viodo was drilling and the IMS was due detailing Soco's busiest ever 12-month drilling schedule!

Danger

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emptyend 16th Nov '09 24 of 476
3

In reply to dangersimpson (post #23)

Why it would be in Soco or JPM's interest to keep things low key if there really was any further expressions of interest? I'd guess they would be keen to get the drill bit into TGD before any real negotiations start but with the directors' holdings a hostile bid wouldn't suceed so there'd be no point in playing things down. Since it comes down to a company offering what the Soco directors believe it is worth they can just say no and don't need to spend time trying to prevent an opportunistic bid.

Managements can waste an absolutely vast amount of time responding to market enquiries if something is put into the market that grabs people's attention. For example, the error-strewn and ill-timed (assuming, for the moment, that the timing was coincidental - which I don't actually believe!!) Citi note on Friday 31/10 took up swathes of management time in fielding (understandable) investor queries caused by errors and inconsistencies in Citi's note. There is a good deal to be said for keeping things quiet and being able to simply get on with the job!

The other point, of course, is that stuff getting into the public domain is unlikely to help any deal that might be under discussion. In my experience (including with my new hat on) it is rare for market rumours to be both accurate and complete - and therefore why would Soco wish to encourage something which is virtually certain to have random, but probably non-positive, consequences? And why would JPM, as it might prejudice their fees?

As you say, though, thanks to the control over the shareholder register they can just say no to an enquiry from a bidder....... and the corollary of that is that anything they say that affects the market in the shares won't have the slightest impact on where a deal can be done!! This last point is important - but is also quite unusual, as the market tends to think in terms of "bid premia" not in terms of absolute figures [for the good reason that, with most companies, if enough of an instant profit is thrown at institutions then they will simply roll over and cash out].

ee

 

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emptyend 22nd Nov '09 25 of 476
5

Contracts reportedly signed on Friday re TGT.....though I'm not sure all the figures quoted can be relied upon  ;-):

Malaysian firm Bumi Armada snd Vietnamese-Russian joint venture Vietsovpetro have been awarded contracts to operate a new oil field called White Rhinoceros in the Cuu Long Basin of coastal Vung Tau City.

The Hoang Long Joint Operating Company signed three deals with the Malaysian firm and the joint venture Friday (Nov 20), which established an alliance to run the field also called Te Giac Trang (TGT) for seven years, with an option of yearly extensions to 15 years. The deals have a total worth of US$700 million.

Bumi Armada would be responsible to supplying alliance with a floating production storage and offloading vessel which has a capacity of 45,000 barrels of oil per day and a storage capacity of 100 million barrels of processed oil with water and gas injection, said Hoang Long’s chief executive officer Ngo Huu Hai.

He said the joint venture would conduct offshore installation and subsequent maintenance of the vessel to operate the field.

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emptyend 23rd Nov '09 26 of 476
6

In reply to emptyend (post #25)

...slightly more accurate figures in the Upstream version of the story..... capacity of the FPSO will be c1mn bbls (c 20 days phase 1 production)

ee

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marben100 18th Jan '10 27 of 476
1

In reply to emptyend (post #26)

Thanks for the presentation link & comments on the "sentiment" thread, ee. However, I am wondering how the company is progressing with preparation for development of TGT? I thought a rig contract was due to be signed by now to do the development drilling?

Cheers,

Mark

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emptyend 18th Jan '10 28 of 476
2

In reply to marben100 (post #27)

I am wondering how the company is progressing with preparation for development of TGT? I thought a rig contract was due to be signed by now to do the development drilling?

That is one of several likely news items that I would categorise (advisedly) as "imminent". They put the tender docs out in November.

ee

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emptyend 2nd Feb '10 29 of 476
6

In reply to emptyend (post #28)

On the rig front, the recent RNS said that tenders for the two rigs were received on 14th Jan and were being evaluated......

......I doubt that it is a coincidence that Rigzone's database lists both PV Dilling I and PV Drilling II as currently being "ready stacked". Either that or they've just been docked during the monsoon. Whatever is the case, since the monsoon should end around the end of this month, I think rig contracts can't be much more than a week or two away.

ee

ps....worth noting from here that the rig utilisation rate in South East Asia is one of the lowest at 67%, with 58 of 87 rigs currently being used. No doubt some of this spare capacity is weather-related.

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oilretire 11th Feb '10 30 of 476
4

What the neighbours are up to..........delaying the 'complex' basement development it seems.

http://www.upstreamonline.com/live/article206060.ece?

The $1 billion Hai Su Trang (HST) and Hai Su Den (HSD) oil project in Vietnam has been delayed by 12 months while the development is redesigned

The Canadian company said it had chosen to write off a number of exploration and appraisal wells in the HSD basement area, all of which are outside the main development area. These wells had hit hydrocarbons but were not commercial.

 Talisman said it was reviewing the timing of sanction for the HST field and an early production scheme for the HSD discovery in Block 15-2/1 in the Cuu Long basin.

Chief executive John Manzoni said a planned wellhead platform for HSD would be slimmed down, but still tied in to the HST field, and still be used as an EPS “to fully assess the reserves in this complex fractured basement”.

“We have pushed back the project by 12 months, and it is unlikely we will sanction in 2010 as previously planned.”

“This is disappointing but I would rather delay sanction and get the right development scheme.”

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emptyend 11th Feb '10 31 of 476
5

In reply to oilretire (post #30)

Sceptics might think that there would be other, more relevant, reasons for the delay - to do with developments planned to the south. With a production hub being provided at H1 on TGT, and another probable in phase 2 at H4 (IIRC - perhaps also serving TGD), using the TGT infrastructure must surely be reconsidered if HSD/HST is being slimmed down?  A delay must be prudent if a change of partners is on the cards?

ee

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Gooseman 14th May '10 32 of 476
3

Good call on the shared infrastructure, ee:

From Upstream:

http://www.upstreamonline.com/hardcopy/news/article214958.ece

Shared FPSO on cards off Vietnam

Two joint operating companies in Vietnam are in discussions about a potential agreement to share a floating production, storage and offloading vessel that one of the operating groups is already building......

The Thang Long operating company and its Hoang Long counterparts are in negotiations on the terms of such a deal, but it will take some time before it can be completed, said sources.....

Thang Long had planned to put a standalone FPSO on its two fields, but PetroVietnam instead wants Thang Long and the Hoang Long group to use the same FPSO that Hoang Long is about to start building at Singapore’s Keppel Shipyard.....

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emptyend 14th May '10 33 of 476
1

In reply to Gooseman, post #32

The Thang Long operating company and its Hoang Long counterparts are in negotiations on the terms of such a deal, but it will take some time before it can be completed

Thanks. Worth noting the timeframe though - I'd guess the terms might get rather tight for Talisman in the event that the FPSO also has to handle output from TGD ;-)  [though to be fair, that would be phase 2 of TGT, so the FPSO use wouldn't arise?]

ee

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marben100 18th Aug '10 34 of 476
7

ISTM that the VN govt will be rather keen to increase their US$ earnings, to help bridge their trade gap: http://www.ft.com/cms/s/0/7fc0cc76-aab9-11df-80f9-00144feabdc0.html

Vietnam must have hoped that Tuesday’s devaluation of the dong would stem the downward pressure on the currency, but on Wednesday it was trading even lower on the black market suggesting the possibility of further devaluations.

The central bank moved to devalue the dong by two per cent to 18,932 against the US dollar in a bid to stem the country’s ballooning trade deficit. On Wednesday, however, the dong traded even lower in the black market, falling to 19,480 from 19,320 the previous day...

Won't do Soco's popularity with the VN govt any harm, if Soco brings home the bacon. Hope it might increase keenness to expedite development/production licensing, as and when appropriate, thus increasing VN's future dollar earnings & facilitating inward investment. ;0)

Could it also be an ideal time for VN's Chinese neighbours to "come to the rescue"?

Cheers,

Mark

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Impvesta 26th Aug '10 35 of 476
6

Half year report out this morning......I'm sure it is quiet on here because everybody is reading it...:

http://www.investegate.co.uk/Article.aspx?id=201008260700196579R

The drill bit edges ever closer - TGD:

Drilling of the TGD-2X appraisal well is continuing. The well is currently at approximately 4,390 metres and is anticipated to reach the objective section within days.

Nganga:

The Nganga-1 well spudded on 15 July 2010 and following various mechanical and software issues on the rig is expected to reach the objective reservoir shortly. Testing, if required would add another two to three weeks.

A very strong outlook statement including:

There is no question that the drilling programmes currently underway offer more upside potential than any experienced previously by the Company.  Should we have success in all phases, the Group could expect net reserves to more than quadruple.  Even with modest success, there could be a significant impact on reserves.

Regards

Impvesta

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emptyend 26th Aug '10 36 of 476
1

In reply to Impvesta, post #35

..I'm sure it is quiet on here because everybody is reading it...:

in my case it is quiet because I was out yesterday and then got stuck on a train until 2am........only just surfaced but, strangely enough, my skip-reading of the RNS took me to exactly the three passages you highlighted! In the context of those, little else much matters for now....

regards

ee

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