Soco Share Discussion Threads

[ed 123] 31/1/2017 08:33

It doesn't take a genius to work out they're more than a year too late.

A debt free, low cost producer should have put together a business development team when the Saudis came out and said they were going for market share, not price. When the oil price was falling there were bargains to be had, as distressed over-borrowed oil companies needed cash.

The oil price hit its low point about a year ago and is now about double that level. Formerly distressed sellers are now in much better shape. Yet now, Soco's management announces its new business development group.

Holders won't know whether to cheer that something has been done at last, or cry over the poor timing of this move.

[emptyend] 31/1/2017 07:36

I wouldn't say that exactly. It looks to me a bit like 1999 all over again, but without the Torobex cash dowery.If there isn't a deal of some sort already on the stocks in the background, I'll be pretty surprised. It doesn't take a genius to work out whereabouts such a deal might be, either, I suspect.

[oilretire] 31/1/2017 07:18

Going on the acquisition offensive it seems....

[yasrub] 30/1/2017 17:30

Yep that was what I was alluding to - not very well ! Gold normally useful sign as well.

[emptyend] 30/1/2017 16:55

Almost every day recently has seen the share price drift lower during the day on low volumes and then rise in the closing auction. Whilst I'm sure that volatile times lie ahead politically in many parts of the world, such events are often positive for the oil price.

[yasrub] 30/1/2017 16:33

I think we could be in for a volatile period - Fox News suggesting Iran have violated UN agreement with missile test. Whilst this incident might not be the one I cannot help thinking the situation is fragile.

[emptyend] 29/1/2017 21:41

....found one:https://markets.ft.com/data/equities/tearsheet/profile?s=SIA:LSEI suspect that the top one in the list (EFG Bank) may represent one of the Contini heirs.

[emptyend] 29/1/2017 21:34

fh....I don't, but Fidelity have 5% and I'm not aware of any other changes in disclosed stakes since the last annual report.

[flyinghorse1] 29/1/2017 20:01

Out of interest does anyone have the latest shareholder register split of the main holders?

[yasrub] 29/1/2017 19:36

Thank you for the replies. I remain hopeful production will be increased with a clear work programme enabling reserves to be revisited. I suspect the share price even with positive news will lag, simply not 'a hot stock' - I can live with that as long as we do get there - it does have advantages if the investment case should become compelling there is opportunity before any potential excitement arrives. Sentiment should not be underestimated.

[emptyend] 29/1/2017 15:45

....ps....not 2014 where I wrote that. 2015 instead. Brent had fallen in a straight line from $110 to bottom temporarily at $45 - and SOCO's shares had tracked this from 400p+ to 250p.....and then we had the plummet on the reserves cut forced by the lack of a FFDP.If that cut is now to be partially reversed and the oil price continues to firm (and especially if the licence is extended) then the fundamentals should be looking comparable with Feb 2015 pre-reserves cut......so 250p ish?Sentiment, of course, may be a different matter in the near term but, as others have noted, management and balance sheet have remained pretty solid during a difficult period. I don't see why undervaluation would continue in such circumstances.

[emptyend] 29/1/2017 15:30

Not quite right, richalert. The FFDP has only actually been finally agreed with PV towards the end of 2016. It has been quite close for longer, of course, but the issue (I suspect) has been where the relationship between the oil price and the PV budgetary cycle (a year ago oil prices, share prices and activity were still going down). PV set their budgets annually and there is little flexibility for a formal agreement to vary it in between times!What is expected,YASRUB, is an agreed forward work programme that will enable production to be raised. More particularly, it should (nb should) enable some of the reserves reclassification of 2014 (the one that trashed the share price) to be reversed. Remember that the reserves hit occurred largely because the was no forward commitment to drilling.....there was no reduction in the total volume of OOIP - just a reduction in the expected ability to extract it.I'd also like to hope that (reflecting the price-induced haitus that wasn't the fault of SIA....or PTTEP, really) there may also be a licence extension.....so it is worth recalling that the share price prior to the Feb 2014 reclassification was around 250p (albeit with a slightly different set of expectations about future oil prices)

[richalert] 29/1/2017 12:36

Therein lies the reason for frustration YASRUB. There has been no concrete information from management for quite sometime. Just communication the FFDP on TGT has been agreed but awaiting sanction, now towards around one year! So it is impossible to know what expectation we can hope for.

[yasrub] 29/1/2017 12:09

I understand Launders's frustration I am significantly down but have to accept I had the opportunity to sell and decided not to - I simply did not appreciate the severe slump in POO. Management have a lot of skin in the game and in general look solid to me - sometimes 'It is what it is !' The vast majority of my holding are in my SIPP and I am taking the view I am young enough for this to eventually turnaround !

On a more positive note whilst we are thinking the long awaited FFDP on TGT is close, what kind of expectations can we hope for and perhaps this will be the decisive catalyst.

[emptyend] 29/1/2017 08:51

The word "probably" comes in for excessive over-use in that piece. And 2017 explo spend is forecast to be lower than 2016's low.....though WM assume there will be more wells per bn bucks. Hence, I assume, the forecast that 2016 will prove to be the low.The biggest supply squeeze will be 5-10 years out from the low point......so, say, 2022-25.....because of the development timeline on most larger projects. Could last even longer than that?I still think we need to keep an eye on Aramco's float - and the reserves they report.Blocks 125/6 could be quite important in this timeframe, relative to the cycle, rather like 16-1 was in 2000.

[adam] 29/1/2017 00:01

well last year saw 3.7b barrels of oil discovered, and i don't think in the last 15 years there has been many years where the amount discovered has exceeded the amount used. (circa 34b barrels?)

[tournesol] 28/1/2017 23:25

Lauders

Fair enough, I sympathise with your position. And on second thoughts my comment was perhaps a bit sanctimonious. Having bailed out some time ago I am in the fortunate position of having no skin in this particular game (ie Soco) right now, so am free from anxiety and stress. I am simply waiting and watching for the right time to return - albeit in a relatively small way. But in or out I have a residual high esteem for the Soco management - I think they are straight arrows which is a pre-requisite for me to invest in this sector.

Good luck

T

[emptyend] 28/1/2017 16:14

Greyingsurfer is quite correct. Though there is also the issue of risk.....and I have taken the view that (relative to the sector if not perhaps the market as a whole) SOCO is a much lower risk than many.Lauders has fessed up to his frustration with the lack of news.....and that is fair enough. There has been none to speak of in the last year or two. The same applies to most other E&Ps (unless you count disappearing as "news"). I have taken the view that SOCO remains at least as well-positioned as most E&Ps to generate news, thanks to the fact that it is financially sound. And I hope to see some news in the near future to justify that optimism at last.

[greyingsurfer] 28/1/2017 13:44

I don't see what getting out even, or at a profit, has to do with it. If your view is that there are better opportunities for you out there then you should take them. Your current profit or loss is irrelevant.

[lauders] 28/1/2017 13:26

Good points tournesol & EE! Just the frustration showing through. Trusting the management is difficult at such times & if I could sell at breakeven or profit I would. There are better options out there at the moment IMO. However, I trusted the management a few years ago & am substantially under water at the moment. I know it was the oil market as a whole, but news is hardly "regular" or "exciting" where SIA are concerned. Think I really have no choice but to wait for some "excitement" & a few more dividends to get some money back.

[emptyend] 28/1/2017 09:01

Quite right tournesol. And I should add in two other points:1. The shares don't vest at all without at least being the median performer in the peer group in terms of total return and2. Managements of E&P companies can spend enormous amounts of time in close periods, so option award prices are just not a controllable item. Options are formally awarded asap after the meeting that granted them (usually at a RemCom and usually in December). At about this time of year there is usually a two month close period prior to the results.....and that can be longer if there are price-sensitive things going on. So it wouldn't be especially unusual (particularly in January) to have just a few days in a six-month period in which management can do anything at all with the shares, between coming out of one close period and going into another.The general point is a good one also. It is very common for people on bulletin boards to slag off managements (often in terms that far exceeds those here). I have never seen anything good come of such witch-hunts (though, to be clear, that isn't what is happening here, IMO).

[tournesol] 28/1/2017 08:31

Lauders

that's nonsense to the power of stupidity

look at the stakes held by management

look at the change in those stakes effected by the most recent and/or impending "additional free shares"

factor in the time value of money

and the losses registered by the directors on account of stock market volatility

and you reach the conclusion that management want the thing to go ahead asap and are bending every sinew to that end

what is delaying matters is the difficulty of getting things done in a third world country inflicted with the remnants of a communist political system and a web of omnipresent corruption

if you do not trust management you should sell - that's the one universal law of investing on which everyone should agree

if you do trust them then don't slag them off

[lauders] 28/1/2017 02:50

Perhaps management were waiting for all those lovely free shares to arrive before releasing any news Ed? Would make complete sense even if unethical/improper! Now the will benefit VERY handsomely from any increase in the share-price, even if just a penny at a time!

[ed 123] 27/1/2017 17:38

Yesterday was the anniversary of Soco's rns which included,

The revised Full Field Development Plan ("FFDP") is expected to be submitted for approval in Q1 2016.



Note that the above link is from the Stock Exchange. If you go to Soco's website and click on Regulatory Notices, you won't see that update.



I thought (perhaps wrongly?) that listed companies had to make available all RNS messages. Maybe the above update is elsewhere on Soco's website?

February starts next week. Think I'll be eating my Easter eggs before that FFDP gets its approval. ;-O

[emptyend] 27/1/2017 16:48

I suspect that today has been an all-time record low volume day, with less than 10,000 shares traded. Certainly I can't recall anything that low.