Soco Share Discussion Threads

[emptyend] 02/2/2017 13:02

So....switching around from the record low volume last Friday, we now have over 1mn shares traded.Quite interesting.I suspect that the sellers are focusing on the average production volume expected next year and rather less on whats happening in the underlying business. I have several questions in my mind....one being the outlook for reserves (and another being the 2018 production outlook).

[greyingsurfer] 02/2/2017 11:36

Hi K,Yes, I largely agree with you. The reason most of the payment is delayed is they simply want to put it off as long as possible - within reason. (No different to any supplier trying to get paid by Tesco et al in that respect.) And the last bit is the crunch. How far are they prepared to go, and what potential damage do they do themselves by stretching it to far.Two things suggest to me they won't go too far. Firstly they've made a significant payment, secondly they acknowledge the rest is due. If you really intend to push it, or try and get out of it, why do either of the those? I won't be surprised if there is still money due at the AGM, but I would if they had to actually go to court to get it.Peter

[emptyend] 02/2/2017 10:48

Not good to be seen having to sue your debtors, but much worse being seen having to be sued because you won't pay your debts. Precisely!With rising oil prices, the pressures on oil companies are reducing significantly, so really no excuse for non payment.....which is why I'd expect it to be resolved fairly soon in the New Year.It may perhaps be that they simply hadn't budgeted to pay it last year? As we know from Vietnam, the formal budget cycle is both annual and inflexible. Whatever the case, I'd expect it to be sorted in the next couple of months.

[kenobi] 02/2/2017 10:24

True to say we discussed the debt, perhaps not the detail of exactly how much was due. Lets go with all of it due in october, how much might have been due in june ? half or more ? Certainly true that they were chasing back then, and no reason for it to come as a surprise to the company that they owed more in the near future.

If foreign exchange really was an issue, I'm sure soco would be happy to take payment in the form of oil, but of course that won't even be discussed, since it isn't the issue at all. The issue is they don't want to pay. My points stand regardless of the detail of exactly when the full amount was due. Not good to be seen having to sue your debtors, but much worse being seen having to be sued because you won't pay your debts. With rising oil prices, the pressures on oil companies are reducing significantly, so really no excuse for non payment.

K

[emptyend] 02/2/2017 10:01

Not entirely true to say the debt was due at the time of the last AGM. Some was (probably the $10mn that has been paid) but it didn't all fall due until (guessing) about October.

[kenobi] 02/2/2017 09:57

The reason for the delay is nothing to do with fx transfers it's to do with not paying until you really have to. At the agm the RC told us that they had come back with "we need to apply to get permission or the currency (or both), " and soco rightly said well why didn't you do it sooner you knew it would be due. I would predict we'll still be talking about some of the debt (which was over due at the last agm), at the next agm. Hopefully not the $40M currently outstanding. I suspect we'll get chunks of it, from time to time, at some point soco will need to get tough and serious about going to court for this, if that's the only way to get payment.

Disappointed not to hear more about marine IX there was a time we were being told that a "deal" whether a sale or a unitisation deal, could be done quickly, probably the agm before last, difficult times since of course, hopefully there'll be some progress there.

as for cabinda, well not really expecting that to ever come to anything,

K

[emptyend] 02/2/2017 09:45

Low risk, I think, Nigel. It is the parent company acknowledging the debt and providing the comfort - and they are the ones who need international investors. Wouldn't be good to end up in court......so it won't.China is perfectly capable of "regulating" FX transfers though, which doubtless is the reason for delay.

[nigelpm] 02/2/2017 09:39

adam - there could be any number of reasons for this - any international transfers of cash will be scrutinised heavily I'm sure.

There absolutely must be a risk Soco never see it but at least progress is being made.

[emptyend] 02/2/2017 09:22

The M&A front is an interesting one. There are plenty of opportunities but still not much cash, so Ed Story may well be right that there will be a lot of deals done this year.Certainly companies that need to do deals but who don't manage to do one (and there are dozens with unfunded commitments) will be in trouble. But I would expect SOCO to be more focused on development opportunities and nearish-term production....so it will be interesting to see where they go. I don't expect surprises, just value accretion within Asia.

[adam] 02/2/2017 09:19

Why do you need "regulatory" clearance to pay a creditor? Also why would it take so long? How come they paid $10m if they don't have regulatory clearance? Isn't regulatory clearance like getting pregnant? You can't get a little bit pregnant

[nigelpm] 02/2/2017 09:08

Everything looked as expected and on track to me - excepting the slightly lower production guidance - I had it in mind it would be more like 9,000 - 9,500.

Definite progress being made on the debt - more about regulatory than not wanting to pay - so I'd say that's some progress albeit slow.

M&A side could get interesting this year so it's continue to sit be patient and buy on any dips I'd argue.

[emptyend] 02/2/2017 08:17

re output, Lauders, it is fairly clear that the 2017 output caution is due to downtime for drilling, hook-ups and other output-enhancing measures, given that the latest output numbers showed an increase. So underlying output capacity in a year's time looks likely to be somewhat higher.Also worth noting the exact wording re Mongolia payment and the Marine XI position.

[adam] 02/2/2017 08:14

Stock markets look forward, but with SoSo you may need the Hubble telescope. Next year Rodney...

[lauders] 02/2/2017 08:10

News and no comment yet? Must be digesting everything but initial reaction is not great and it seems like more "delay" to me plus a reduction in output. The wait continues for the share-price to recover here. At least SOME news is about to come by the looks of it. Not holding my breath.

[ed 123] 01/2/2017 10:42

Good morning, emptyend!

Could you bring back mrwaite to help you with Magna Energy too?

[mrwaite] 01/2/2017 07:40

Ed123
"Finally, you think those who disagree with you on shareholders' interests are "barking"? "
I rarely post here, but must say that it was the directors own holdings here which caused me to invest some 17 years ago and I haven't regretted it for one moment. The share has served me well in my retirement and the present price and payouts make up a many times multiple of my investment, even without considering the 4 for 1 split.

[ed 123] 31/1/2017 23:30

The article in your link (post 19115) is dated 22 June 2015, emptyend.

You wrote,

..worth pondering how this effective "takeover" of management might develop.....

Why do you write that when we already know how it developed? The total assets of Magna Energy Ltd on 31 March 2016 were reported as being only $1.7 million. And the new effective takeover team of Watts and Brown both resigned from Magna on 27 January 2017.

Are you relying on "alternative facts" or "alternative reasoning"?

When your investing days are over you might find employment with Donald Trump!

[ed 123] 31/1/2017 23:14

Same old, Cheerleader in Chief!

If your post 19114 is self parody, emptyend, then I apologise and you have more humour than I give you credit for.

I'll assume you actually meant what you wrote. When the dive in the oil price gifted bargaining power to the managements of oil companies with strong balance sheets, how can Soco's management (which made no asset purchases that I recall) be anything other than "chaff", as you like to put it?

And why has Soco only now moved to set up a business development group? Someone tell me, please, that they weren't waiting for Watts and Brown to finish their executive roles elsewhere and so become free to do more at Soco?

Finally, you think those who disagree with you on shareholders' interests are "barking"? Your arrogance speaks volumes.

[emptyend] 31/1/2017 22:55

..worth pondering how this effective "takeover" of management might develop.....https://www.carlyle.com/media-room/news-release-archive/carlyle-group-commits-500-million-magna-energy-ltd

[emptyend] 31/1/2017 18:32

Well said, Peter!Soco operates in the real world where managing and accepting risk is bread and butter. It doesn't operate in ADVFNLand, where all companies multibag except those many where the BoD spend their lives conspiring to destroy investors capital as fast as possible.I couldn't have put it better.What today's news makes clear is that transactions are moving up the priority list and are no longer to be done on a part-time basis. It has always been the case here that substantial amounts of insider skin in the game are shareholders' guarantee that the board and management seeks to act in shareholders' interests. If anyone is suggesting otherwise, they are barking.The last two years have been a tough time for the whole sector. But these are times when management wheat gets sorted from the chaff.

[greyingsurfer] 31/1/2017 14:39

There's no certainty that Soco's business development intentions will benefit its shareholders.No, of course there isn't, Soco operates in the real world where managing and accepting risk is bread and butter. It doesn't operate in ADVFNLand, where all companies multibag except those many where the BoD spend their lives conspiring to destroy investors capital as fast as possible.The question is: is this a sensible use of resources with a decent probability of adding value for a company with good cash flow, no debt and a forward cash stream with reasonable clarity stretching forward over 15 years and quite possibly more. And one that has been repeatedly attacked on the boards and elsewhere for having no forward plans for new projects?From what, little, I know so far the answer looks like yes.Peter

[ed 123] 31/1/2017 13:35

I've taken a look at Magna Energy Ltd. Mike Watts and Jan Brown both resigned as directors there four days ago. They were the two executive directors. The intention at Magna was to build a new oil and gas business focussed on the Indian sub-continent.

Magna's main asset is shares in Oilex, but these have fallen in value resulting in writedowns. Magna has no revenue. Accounts show that Carlyle stepped in with a capital contribution of $1.2 million in 2015/16 and Magna had $0.764 million in cash at 31 March 2016. Approaching the end of the line???

Takeaway? Even when run by two people of pedigree, O&G start-ups are high risk.

(There's no certainty that Soco's business development intentions will benefit its shareholders.)

[ed 123] 31/1/2017 13:09

Richalert.

DR MIKE WATTS has served as an independent non-executive on the SOCO Board of Directors since August of 2009. He has served as Chairman of the Audit and Risk Committee since 2014.

Taken from today's rns.

[richalert] 31/1/2017 08:44

Not quite how I was going to ask the question Ed. What was Dr Mike Watts function in Soco for the past year?