Soco Share Discussion Threads

[nigelpm] 16/11/2016 09:37

Thanks for clarification ee. As you say commercial messing around and perhaps to manage cash flow - might see it paid immediately post year end (if they have a December year end).

[emptyend] 16/11/2016 09:11

Yasrub, It is inter-group data on the Chinese side. Nothing to do with SIA. Daqing claimed to have had CNOC sign-off and CNOC bean-counters delaying payment, as far as I can tell.

[redartbmud] 16/11/2016 08:22

Thanks ee.
That sounds like me to be a typical Chinese tactic. Getting them to pay money that they owe can be harder than pulling teeth.
As the threshold would appear to have been crossed some time ago, one would expect that sufficient oil has flowed, in the subsequent months, for the numbers to have hit them square between the eyes by now.

[yasrub] 16/11/2016 08:16

It seems a given that no one pays outstanding debt on time if they can delay. I am not particularly concerned just frustrated that it looks like a bit of a commercial game I guess SIA will have already provided the data and bring closure hopefully.

[emptyend] 16/11/2016 08:16

Re other priorities, the group being on the cusp of committing to a big piece of a $6bn Iran deal will probably be part of the reason for the delay:https://www.tasnimnews.com/en/news/2016/11/08/1234427/iran-to-ink-6bln-gas-deal-with-total-tuesday-official

[emptyend] 16/11/2016 08:09

Some element of "taking the mickey" no doubt, but it is a production-based payment with 12 years of production data required for it to be due. My guess would be that group internal audit are asking for more info to verify the threshold has actually been reached - but basically they are just delaying payment for their own commercial reasons. Other priorities, I guess.

[redartbmud] 16/11/2016 07:59

Why has it taken from 2005, when they acquired the asset, to ask about "additional technical information related to the asset from its parent company, China National Petroleum Company"

Taking the mickey?

[emptyend] 16/11/2016 07:57

Delays to payments are regrettably not uncommon, especially in relation to obligations that have little bearing on near-term future business. Other than that, it is interesting to see that blocks 125/6 are expected to yield a PSA with a 70% stake, which should give flexibility to sell down after the initial work period and the Lidongo licence grant should also give some options going forward.

[invisage] 16/11/2016 07:19

Lol the cracks are appearing

[nigelpm] 16/11/2016 07:16

Further delay on the 50m. Always concerning.

[dozey3] 15/11/2016 22:00

The fact that there has been "little drilling in the last three years" will hopefully lead to a gradual if unsteady increase in the poo, even without the possibility of OPEC tightening the taps a tad. Add a bit of Trump expansion to the mix and my guess is that it's worth hanging on.

[emptyend] 11/11/2016 08:18

Thanks for the comments, Gengulphus, and for the quote to remind me "what I've been missing" (hah!) when blocking contributions.How anybody can have such an exchange without mentioning the oil price, I simply cannot comprehend. "Luck with the drillbit" is irrelevant when 90% of companies can't finance drilling - or even seismic in many cases - because the potential projects won't stack up even if drilling is successful.Had the oil price stayed where it was, this discussion wouldn't be taking place. And, whilst little drilling has happened in the last three years, we should be grateful that the company returned over 50% of the company's current value to shareholders rather than throwing it into more holes in the ground. At least they have got that bit much more right than most.

[gengulphus] 11/11/2016 04:40

Soco is a classic lesson in confusing luck with ability. Soco made some investors a lot of money through its luck with the drill bit in Vietnam. However these investors convinced themselves (and indeed others) that their gains were really a result of their clever insight into the macro oil environment/appreciation of geology yada yada. They then demonstrated it was none of these as they sat and watched large chunks of their gains disappear as the macro environment reversed and Soco's luck with the drill bit deserted it. Now they hang on desperate for some miraculous validation, whilst pretty much everyone else has moved on. It's classic cognitive dissonance...

You correctly conclude that Soco was luckier with the drill bit back then than it has been recently - and then jump to the conclusion that that's because it enjoyed unusually good luck back then, luck that is unlikely to return. There is the alternative explanation that it's enjoyed unusually bad luck recently, bad luck that is unlikely to continue. And inbetween, the explanation that it enjoyed somewhat good luck back then and somewhat bad luck recently, with both likely to happen again in the future and therefore neither likely to continue forever. Cognitive dissonance indeed...

The fact is that the success or not of an investment in an oil exploration company necessarily involves a good degree of luck. The investor is not in control of that luck - that's basically what makes it luck. What they can do is play the odds...

Attempts to analyse those odds would be far more valuable (at least to me) than attempts to analyse each other's states of mind.

Gengulphus

[adam] 10/11/2016 23:52

hxxp://www.bdg-asia.com/vietnams-top-five-export-sectors-2013/

Seems to be electronics and electrical equipment

Point is all economies are linked and it is an accepted fact that protectionism leads to lower growth. It panders to domestic short term political expediency, but creates inefficiency and a sense of entitlement. French farmers would be the EU epitomy of that.

[emptyend] 10/11/2016 22:14

Ps....I'd take a different view re Mexico. I suspect the Mexicans have pushed things too far. Car plants etc that have gone over the border are particularly vulnerable. And the border will be enforced much more rigorously.

[emptyend] 10/11/2016 22:10

And what is the composition of VN trade with US, Adam? Do their exports include manufactured items the US could reasonably manufacture?For example, VN is world's largest exporter of robusta coffee. I guess footwear is also major. Are either susceptible to being produced in US?

[adam] 10/11/2016 20:09

His proposed tax reforms are! Let's hope there's more of that and less of the budding central planner. Leave that to the dysfunctional socialists.

[joestalin] 10/11/2016 19:20

The point is Trump - If his rhetoric is to be believed, is not a capitalist.

So.......he is a capitalist?

[adam] 10/11/2016 19:07

The point is Trump - If his rhetoric is to be believed, is not a capitalist.

Vietnamese trade currently with USA is running at over $40b. The USA is Vietnam's largest export market. (circa 20% of all exports)

A change is USA policy to be more protectionist will harm Vietnam and its partners directly and eventually the USA and the world economy.

He can build all the bridges he wants, but a government can't replace a complicated cross border economy.

I note the treasury yields have already jumped. A spending blitz on top of a $19 trillion debt mountain with rising interest rates?

[emptyend] 10/11/2016 18:39

I've no idea what any of that has to do with anything anyone has written here. Still, I imagine it makes someone feel better......?

[adam] 10/11/2016 17:57

Well I'm a believer in free markets. Dirigiste capitalism doesn't work. Government in general is lousy at allocating capital. In undeveloped emerging economies - the initial phases in e.g. Japan after the war and China more recently it has a place, but I wonder now if it is appropriate in the most sophisticated economy in the world? I fear an authoritarian kleptocracy will take root - perhaps that is why he is such an admirer of Putin?

[emptyend] 10/11/2016 17:43

I'd be pretty sure, kenobi, that there would be strings attached. I would think that investing it or distributing it would be required within, say, two years of repatriation. There is plenty of room for a mix of carrot and stick - and I'd expect Trump's people to be very much more inventive and "left field" than another administration of the same old suits.Infrastructure spending on bridges etc (many of which are knackered) could be accelerated with the right incentives.All a bit of a side-issue for SOCO, most likely?

[kenobi] 10/11/2016 16:56

If he's smart, he'll make bringing cash back on beneficial terms conditional on investment somehow. Or strike specific deals with big companies like apple. Although I can't help feel that apple have lost their way somewhat since the death of steve jobs, the recent announcement that they're not going to produce a car being the most clear signal of this. What are they going to invest in? ever thinner and faster smartphones ? diminishing returns there I fear.

K

[nigelpm] 10/11/2016 16:44

Good points ee. I tend to agree that Trump will be great for US business - stock markets slowly working that out ;-)