Soco Share Discussion Threads

[kev0856153] 13/2/2018 07:33

nigelpm, A few days ago you claimed these shares were phenomenally cheap and that's when the price was 100p. Why?.

Based on having 5 years 1P+1C reserves left and at 70$ oil that is worth about 5 * $37 = $185M in my view. This takes into account $35M capital expenditure each year.

Then the balance sheet is worth another $100M which excludes the O&G assets.
How much is 30Mmboe of P2 worth? That is a big question. I'm going for $75M

So that comes out as $365M but obviously I need to buy at less than that or I cannot make a profit. 20% less is $292M which is 63p and that is my target buy price. TIA.

[nigelpm] 12/2/2018 23:13

My enterprise value takes into account net decomissioning and other liabilities. Unfortunately these are real liabilities and won't just vanish into thin air.

In which case your enterprise value is exactly that - pure fantasy and a figment of your imagination!

[emptyend] 12/2/2018 22:19

Ps. I see our resident moaner has reverted to type and is whingeing on and on....and on and on.....and on.....about buybacks.

I've said this before but I think the buybacks were around 250p pre-dividends.... So equivalent to under 170p in today's money. Yes ex-post it was suboptimal.....but for 4-5 years they were clearly adding value. Had the oil price stayed up, they still would......

[emptyend] 12/2/2018 22:12

As for the dividend, if that is Peel Hunt's view them they are 100% certainly wrong.....

[emptyend] 12/2/2018 22:11

Decommissioning costs are fully provided for on reserves charged annually to the P&L....

[dunderheed] 12/2/2018 21:51

Invisage I asked earlier and perhaps you missed it? You speak very authoritatively, can you provide some guidance on your own background and experience?
Not saying I disagree with some of what you're saying but I'm wondering what back up you have, in the 'non free bb' real world to justify your arrogance and disrespect to some posters?

[dunderheed] 12/2/2018 21:51

Duplicate post.

[dunderheed] 12/2/2018 21:51

Duplicate post.

[invisage] 12/2/2018 21:41

At close today that is :

£304m market cap less $137.7m (per latest RNS) (c.£100m) -> c.£204m

Stupid accountant that is just a snap shot of the cash at the last results.......you don't know what the cash position is now...

[invisage] 12/2/2018 21:41

At close today that is :

£304m market cap less $137.7m (per latest RNS) (c.£100m) -> c.£204m

Stupid accountant that is just a snap shot of the cash at the last results.......you don't know what the cash position is now...

[kev0856153] 12/2/2018 21:40

So why are Peel Hunt only forecasting a 1p dividend this year. I think the dividend would have been a lot less than 5p last year if not for the Mongolian receivable.

My enterprise value takes into account net decomissioning and other liabilities. Unfortunately these are real liabilities and won't just vanish into thin air. Ignore them at your peril.

[nigelpm] 12/2/2018 20:12

As for the dividend I doubt it will be 5p this year. The Mongolian payment was the reason for the 5p.

You are managing to make some pretty fundamental errors in everything you post!



including $42.7m collected in March 2017 in association with the Company's full and final collection of the receivable due following the disposal of its Mongolia assets in 2005 and after returning $21.0m in cash to shareholders through a 5p per share dividend.

[nigelpm] 12/2/2018 20:09

The enterprise value is really £230 million



As Soco has no debt it is simply market cap less cash.

At close today that is :

£304m market cap less $137.7m (per latest RNS) (c.£100m) -> c.£204m

[kev0856153] 12/2/2018 19:52

The enterprise value is really £230 million and I cannot make the numbers work to justify anything like that. Not for a depreciating asset with the level of capex required.

As for the dividend I doubt it will be 5p this year. The Mongolian payment was the reason for the 5p. Peel Hunt were expecting 1p for 2018. If it's yield you want then buy Shell or BP. Far far safer.

[nigelpm] 12/2/2018 19:50

As ever there isn't a logical person who'd say "Buybacks are bad" or "Buybacks are good" - it depends. It's not black/white.

[kenmitch] 12/2/2018 19:31

Really surprised to see the share price so low.

Again shows what a waste of money Soco’s buybacks at prices way higher than now were.

Those who strongly disagree really should read this superb LEX FT comment/case against buybacks.



Sums spent on them in the US are astronomical!

eg Exon $210 billion before suspending them right at bottom of oil price drop.

NHS budget is £122 million, so Exon alone has spent more than that.

IBM have spent $162 billion which is more than IBM current market cap.

Investors with closed minds won’t want to read the LEX comment. It really is eye opening.

Those who don’t read it or any similar comment or evidence against them will no doubt continue to be certain that SOCO buybacks worked well and perhaps even believe they should be buying back now.

[invisage] 12/2/2018 18:40

Different day same old rubbish from the same people....

[emptyend] 12/2/2018 17:46

......also worth noting that the total market cap is c.£300mn, of which around £100mn is cash.......so a £200mn enterprise value and a prospective dividend yield in the region of £15-20mn.More volatility looms I think.I'm reminded of my other major shareholding where, a couple of years ago, the market decided that a placing had to be done and so sold the shares down by 25%......only to find that the placing was actually completed at a premium to the previous market price. I doubt a placing is involved here, but I'd think somein the market have been "too clever for their own good".

[nigelpm] 12/2/2018 17:27

Some decent buying the last ten mins today.

I think you are right ee - and I'm betting on it.

[emptyend] 12/2/2018 17:22

.....chart looks like a Winter Olympics ski jump ramp for the last two weeks. Is it really worth 25% less? I very much doubt it. I have a feeling in my water that the short-sellers are about to get a shock......

[weeeck] 12/2/2018 16:32

Well I am another one who has purchased today to use up my ISA allocation for this year that I have been putting off waiting for a proper market crash (which may still come). I am one of the very fortunate ones who due to a house purchase was 'forced' reluctantly to liquidise my fairly large holding (for me) of SOCO four years ago but have kept up with events on this and other boards so still have a good grasp of the company. I hope I am as lucky with SOCO this time as I was last time.

[keith95] 12/2/2018 16:09

Morningstar Research

SOCO International PLC SIA QQQQ 10 Feb 2018 02:00 UTC
Last Close Fair ValueQ Market Cap Sector Industry Country of Domicile
09 Feb 2018 10 Feb 2018 02:00 UTC 09 Feb 2018
0.94 1.00 337.7 Mil o Energy Oil & Gas E&P GBR United Kingdom

or believe the Shorting Boo Boys on this thread, who suddenly appear out of the woodwork .... :)

[kev0856153] 12/2/2018 16:06

valuehunter1,
My reasoning is it is overvalued because the vietnam 1P reserves will run out in 5 years and Soco may only be getting in $30M cash flow per year if the capex continues at the current level and even that is only if the oil price can stay at $70. There are some liquid assets on the balance sheet but I cannot justify a £300M market cap even if I allow $100M value for the P2 reserves.

Can you post why you think this is mis-priced by the market? TIA.

[nigelpm] 12/2/2018 15:56

Not really Nigel, because they will look at the actual assets and arrive at their own negotiated valuation.

Yes - that's true but if it has no value to start with per balance sheet you aren't starting from the best negotiating position!