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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476 Posts on this Thread show/hide all

flyinghorse 2nd Oct '13 437 of 476
3

The only way you can tell if a field /well is in pressure communication is if there's depletion detected in any new wells drilled, Or you detect the production pressure effect from one well in another. It may be on the same pressure gradient,but not connected but that's a different thing.
So I wonder if they found depletion? The high GOR upper layer also indicates a different hydrocarbon regime. It will be way more complicated. However a great problem to have and a great result.
FH

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emptyend 2nd Oct '13 438 of 476

IMO they simply observed pressure changes in some of the production wells. My guess is that the connection are mainly in the lower Miocene LBH 5.2.
I have a theory that the charging of TGT as a whole may be mainly from the Oligocene under the H5 block (via faulting up from the source rock to the ILBH 5.2 where most of the gas migrated to)

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rhomboid1 2nd Oct '13 439 of 476
1

Evening EE

If your theory is correct do you have any handle on the likely impact on recoverables?

"How long is a piece of string" does not constitute a satisfactory response (:

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emptyend 2nd Oct '13 440 of 476

:-)
No rhomboid, I really don't, I'm afraid. The connectivity is going to help recovery factors (for which even RPS will give them credit) but I am wondering whether charging from below might indicate greater OIIP than they have thought hitherto.
But trying to guess numbers is a problem for those well above my pay grade on technical matters.
Perhaps we'll get some clues when all the tests are in and have been integrated into the models.

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tournesol 3rd Oct '13 441 of 476
9

Surely the key issue touched on by connectivity is the size of the reservoir and the extent to which it is charged with hydrocarbons.

If the reservoirs penetrated by two wells are found to be connected, then the implication is that there is a charged reservoir which extends, unbroken, all the way from one to the other. That suggests that prior estimates of reservoir area and capacity, based on the idea that discovered accumulations are separate and discrete, will need to be raised to recognise that what has been found are not discrete accumulations of hydrocarbons but a single large one.

The increase in reserves concommitant on improved recovery factors is then a double whammy since it will apply to a larger reservoir.

It looks to me that my £7 target price might very well prove unambitious and pessimistic.

:~)

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SW10Chap 3rd Oct '13 442 of 476
13

I would draw a distinction between connectivity and the term attributed to RBC by Alphaville which was pressure communication - a term which is (rightly at this stage) more cautious.

It's perfectly possible to have pressure communication even while the hydrocarbons are compartmentalized - pressure can be transmitted through water underneath.

Those who have their mitts on the models will have a view as to which end of the spectrum we are, in the meantime RBC's caution may be worth sharing.

SW10

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emptyend 3rd Oct '13 443 of 476
3

Very good point, SW10. However, I understand that they are confident that connectivity has been demonstrated, even though I don't know the exact basis of that. Perhaps (as someone suggested) they have observed some evidence of depletion.
In any event, I'm sure they will want to do further analytical work and modelling before they can announce any further indications of numbers.

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tournesol 3rd Oct '13 444 of 476
10

I do take SW10chap's point. We should not get over-excited.

In reply to EE - I first heard about the possibility of connectivity at the AGM (I think it was last year). AIUI the ops team had noticed that recent well testing was directly correlated with variations in pressure measured at distant wells already in production. I understood that there were several possible explanations, including the most desirable one. AIUI recent efforts on this subject have been directed towards determining which of the explanations is correct.

The body language was interesting here. Although the person telling me was diligently cautioning me against over-exuberant optmism, he was patently unable to conceal his own excitement/elation at the potential upside.

I read the recent RNS and reported interview as being in the same vein. The RNS was very positive and very confident. It's not often you read an RNS expressed so strongly. Roger Cagle said that this was the best well he had known in his long career. How does the language and the views expressed colour our own assessment of the likely impact? It seems pretty positive to me.

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lightningtiger 3rd Oct '13 Reported for Misinformation
22

Hay you guys there is a lot of chat about this socco but NO ACTION. I have held this stock a few years before & between 2005-2007 the share price moved from around 100p to 500p but now it is not moving yet 0.8% in a month and 6.2% in a year is no good for me! I need to see things moving .Today , (since we are talking oil stocks) , I have noticed DESIRE PET UP 32.7% in just todays movements. From a one year slide AND the average number of shares per day has shot up from about a quarter of a million to around 10 MILLION! Is this a good time to consider buying I wonder? There is a lot of red dots on the stockopedia screen at the moment, I am still trying to find my way round it, BUT something is happening I must investigate further. Don't miss out on the action. Cheers from Lightningtiger & thanks to the 700 club.

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omh 3rd Oct '13 446 of 476
11

In reply to lightningtiger, post #445

... now it is not moving yet 0.8% in a month and 6.2% in a year is no good for me! I need to see things moving .

 Er...We've just had a 40p dividend.

....I have noticed DESIRE PET UP 32.7% in just todays movements...


But you haven't seen why? Suggest you need to pay more attention to what is going on and less to price movements in isolation
OMH

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nigelpm 3rd Oct '13 447 of 476
6

DFTT

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ExTownie 3rd Oct '13 448 of 476
8

PTTEP's view suggests a different attitude to SOCO, with no mention of raising production:

Tevin Vongvanich, president and CEO of PTTEP, said that the well is the first appraisal well drilled in Area H5. The drilling campaign started on June 19, 2013 at the 3,880 metres depth and successfully yielded petroleum discoveries with 119 metres of net pay, on August 11, 2013.

The flow tests showed in 1st zone of Oligocene C, crude oil flow at approximately 6,083 barrels per day (BPD) and associated gas flow at approximately 0.88 million standard cubic feet per day (MMSCFD); in 2nd zone of Lower Miocene 5.2L, crude oil flow at approximately 4,896 BPD and associated gas flow at approximately 1.29 MMSCFD; and lastly, in 3rd zone of Lower Miocene 5.2U+L, crude oil flow at approximately 4,835 BPD and associated gas flow at approximately 23 MMSCFD.

Further development plan is being studied to maintain the production rate of 40,000-45,000 BPD in Vietnam 16-1 Project.
http://www.nationmultimedia.com/business/Successful-results-from-Vietnam-project-PTTEP-30216272.html

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emptyend 4th Oct '13 449 of 476
3

I think all parties struggle to avoid putting the PR cart before operations horse. We are some way off getting a clear and agreed decision from the JV about how production could be raised. Those discussions must reach a conclusion (and be approved!) before they can be RNS'd.
The direction of travel is pretty clear....I have in mind the Spring as the time when they can be clear on the forward production plans - assuming we get that far, given a 2P update in the meantime.

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ExTownie 4th Oct '13 450 of 476
2

Thanks ee. I had wondered if PTTEP were potential buyers of SOCO's stake wishing to keep production low or at least talk down the value. Do PV tend to issue statements about well tests? I haven't seen one, but it would be helpful to see their take on this.

ET

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redhill 4th Oct '13 451 of 476
3

In reply to nigelpm, post #447

PTTEP's view suggests a different attitude to SOCO, with no mention of raising production:

We've seen this before and I wonder whether a difference in attitude could be the elephant in the room regarding both increasing production and a sale? Would a potential purchaser of Soco's VN interests be comfortable with taking on such a partner as PTTEP who may not wish to produce to the same volume/timescales as either Soco or a purchaser?

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emptyend 4th Oct '13 452 of 476
6

In reply to ExTownie, post #450

PTTEP might be a possible buyer, I suppose, but the other thing to remember is that they are also a much larger company than SOCO International (LON:SIA)....market cap of roughly $21bn if I have my numbers right......so the fact that H5 rates a mention at all is of some significance.

PV never make formal statements of an RNS type - but may well say things in presentations in due course (judging from previous form). My understanding is that they are really quite excited by the Oligocene results in particular and wonder if it might give them a new play type in Vietnam to promote.....

I don't think that we're going to be around to see the actual start-up of production in H5 - but may well be around long enough to see what the plans are.

rgds

ee

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emptyend 4th Oct '13 453 of 476
4

In reply to redhill, post #451

It is no more in PTTEP's interest than in SOCO's to defer production (unless, in the very short term, perhaps ET's theory may be correct). They are all under the same licence - and between them own 59% of it.

Once the data is all in, I'd expect to see a pretty sensible production plan being put up - though I doubt we will hear much about that until the February prelims.

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redhill 4th Oct '13 454 of 476

Thanks ee.

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Gooseman 5th Nov '13 455 of 476
7

http://www.upstreamonline.com/epaper/article1342628.ece

Te Giac Trang satellite 'set for Spring sanction'

...Soco International chief operating officer Anthony Maris said that the explorer was looking to add another wellhead platform to the development.

“The H5 is the fifth fault block in the sequence, it’s a southern satellite to the existing field and we will be looking to put a new platform similar to what we already have on the field and tying it in over the next 18 months to two years,” Maris said.

“We’ll be going through the winter pulling together all the required documentation and approval processes that we need for both internal and Vietnamese government approval, and hopefully sanction the project early in the New Year, in March or April,” he said.

....preliminary development plans for the satellite expansion could see jacket and topsides construction in October 2014 and first oil in September 2015.


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kenobi 5th Nov '13 456 of 476
3

In reply to emptyend, post #452

I don't think that we're going to be around to see the actual start-up of production in H5 - but may well be around long enough to see what the plans are

Mind you there was a time that many thought we wouldn't see the start up of production of tgt, so lets just wait and see. Soco seem determined to get a good price for vietnam, lets hope that the new resevior model de risks the asset enough. To be honest, if they keep making progress and proving up the asset, I'm happy to hold. That approach obviously has risks, including opportunity risks.

K

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