Soco Share Discussion Threads

[emptyend] 08/1/2018 14:26

.......just to repeat a post I made prior to Christmas:Just a final pre-Christmas thought that came to me in the shower...........perhaps the fact that a pre-close update is being used (rather than a belated mid-period update as per IMS timing) might indicate that a reserves update could be included? Obviously the basic reservoir data is well understood and could be re-run at any time.....but we now presumably have several months operation of the water-handling and we now have an agreed plan for next year's work programme on TGT, as well as the FFDP that was agreed earlier in the year. Accordingly it should be perfectly possible to produce a reserves estimate that correctly classifies known resources (as at year end) in very short order? And such an update should surely reclassify at least some of the 2C downgrade from 2015 back to 2P?Furthermore, if a reserves update is available by the second half of Jan, then that throws open the possibility of corporate deals being done on the back of it. I'd like to think that we'll see some strong upward momentum in January.....

[emptyend] 08/1/2018 14:17

Now a matching announcement from Kuwait Energy, who are being advised by BofA Merrill Lynch.....

[emptyend] 08/1/2018 13:09

Hi rhomboid,I see we have a similar view on the circumstances of the news ;-)On the substance, both (southern) Iraq and Egypt have been seriously considered previously - and so I think the board is broadly comfortable with the risks there....as am I. The Yemen, of course, is a different kettle of fish - but, according to reports, the assets there are intact ....they just aren't producing for now. So both companies have blue sky assets (Cabinda and 125/6 in SOCO's case). We'll see. Should be an interesting ride for those who are in at or below current levels, I think.

[rhomboid] 08/1/2018 12:51

Nice to see some excitement here, obviously until terms are in the open it’s a difficult deal to assess but I would only venture that with assets in Egypt Yemen & Iraq it represents a rather racy set of geo political risks. As EE speculates it might be that news of this approach (accidentally?) leaked with at least half an eye on another transaction getting jump started that might be more in line with the risk appetite of existing major Soco holders?

[yasrub] 08/1/2018 12:28

I think SIA is in the bracket of the market will react AFTER a deal. Surprising but the racy PMOs and TLWs are the current flavour.

[quepassa] 08/1/2018 12:25

This morning Peel Hunt issues broker note and REITERATES their BUY RECOMMENDATION with TARGET PRICE of 145p.

On 29th. Dec, Jefferies REITERATED BUY with TARGET PRICE 150p.

The prelim talks are interesting and give a boost but of more interest is the surging oil price which is not yet fully reflected .

ALL IMO. DYOR.
QP

[eggbaconandbubble] 08/1/2018 12:19

previous message!

[extrader] 08/1/2018 12:16

Hi ee,

I think ebb's point is that analysts referred to in your 20290 shouldN'T take too long to come to a conclusion....

ATB

[emptyend] 08/1/2018 12:07

....the other point to note is that if there is anyone minded to take SOCO out then they would now need to make a move. Who knows whether there may be or not? ......but, whatever the case, I think we can stop watching paint dry and turn back to some proper speculation with a good degree of enthusiasm.

[eggbaconandbubble] 08/1/2018 12:04

Empty, last sentence of last para, last message needs a re-read I think!

[emptyend] 08/1/2018 12:03

Good point re FTSE-250!Note also the line in the RNS:"Given the relative sizes of SOCO and Kuwait Energy, including their respective stated oil & gas reserves, any transaction would be likely to constitute a reverse takeover for SOCO for the purposes of the UK Listing Authority's Listing Rules. "I'd also note that I believe SOCO have a completely separate strategic deal being worked on at the same time, so I think the question to be answered is which route provides the most shareholder value. We can be confident that shareholder value will be front and centre in board considerations (and I remind you that the new execs loaded up at 150/160p last year)

[nigelpm] 08/1/2018 11:49

Other point - combined entity likely to qualify for FTSE-250.

[nigelpm] 08/1/2018 11:47

Great points ee. Confirmation RNS.

[emptyend] 08/1/2018 11:37

I'd also add that if some of the Kuwait Energy shareholders are looking to adjust their stakes (up or down) we could see a vast improvement in short term liquidity in the shares. I suspect that there would be some major changes in the shareholder register on both sides of the combined entity (since I'd guess that a number of the core holders of SOCO over the years would also be interested in adjusting their stakes....Contini, Maugein heirs etc)........so I'd be thinking that average daily volumes might get up to 2mn or so shares for a while. But the unanswerable question for now is at what price. What % of the combined entity will SIA holders get?.....that is the crucial question for us!...and what would the analysts make of it? Surely many analysts would already have had a close look at the Kuwait Energy assets ahead of the planned float, so they should take too long in coming to a conclusion once terms are public.

[emptyend] 08/1/2018 11:26

I note that Kuwait Energy's proposed float would have valued the whole company at getting on for $1bnhttps://www.ft.com/content/953ae7aa-2a85-11e7-9ec8-168383da43b7Also note from that the production of 28,000 bopd and the indication that the Iraqi asset (17,000 bopd) is likely on sort of service contract rather than a traditional PSA. And that Yemen is shut-in but intact.It seems to me we have two companies here who each feel their assets are undervalued, and there is complementary geography in the asset mix. My feeling is that there is definitely something in this and I'd be expecting news in the next week....perhaps in the next couple of days. I've had the sense for a while that the ducks are being lined up and I suspect that both parties will now have year-end independent reserves reports with which they can finalise the terms (which, frankly, I think will have been agreed in outline for some weeks).The task for the combined entity will be to extract value from the portfolio - and that will likely lead on fairly quickly to an asset-swap deal with a third party, IMO, to take a major step forward in refocusing the strategy.

[nigelpm] 08/1/2018 11:07

I'm going to remain skeptical until I see the detail that's for sure.

[kenobi] 08/1/2018 11:03

Well, a deal that would offer a listing to a company who otherwise would be unable to list on the london stock exchange otherwise. Possibly to provide an exit for the owners of other company. As long as the valuations make sense, it could be good,

assets that need developing, and cash, seem like a relatively good fit for soco,

K

btw, on a seperate note saw this on bbc,

[nigelpm] 08/1/2018 10:56

Looks sensible on balance for Kuwait -

Share risk/exposure
Provide Kuwait with a London listing


Less so for Soco on first glance


NOT what I was expecting at all.

[nigelpm] 08/1/2018 10:47

Kind of explains the recent weakness if truth in this.