Soco Share Discussion Threads

[kev0856153] 23/3/2018 11:01

The capital expenditure is the killer. I know you don't like to discuss this but they need to spend $40M just to maintain production levels.

[nigelpm] 23/3/2018 10:39

Well now trading at 92p (if you consider the 5.25p dividend) - effectively a buyer is paying 87p.

The £300m marker cap barrier broken with c.£100m cash on balance sheet (would still expect c.£100m after dividend paid given 6 month cash flows in 2018)

Giving a market cap 87 x 333m = £289m

Honestly didn't foresee this under many scenarios and certainly not a brent price touching 70 bucks!

[buywell3] 23/3/2018 07:37

Will the USA now take the UK FTSE 100 back to 6000 this year ?

IMO ... I think it well might

Will this affect SIA ?

IMO ... I should think it will

[stemis] 22/3/2018 10:42

Keeps me off twitter...lol

[nigelpm] 22/3/2018 10:37

Fair enough - your input is most welcome - I find it keeps me sane.

[stemis] 22/3/2018 10:31

Out of interest, what keeps you interested on reading and posting to the board?

Haha. Fair question. I haven't held since 2010/11 but I made a bit on it in the good times and this is a fairly quiet and mostly rational board (apart from the politics) so worth popping in, now and again, to check if anything has changed.

[nigelpm] 22/3/2018 10:22

Presentation up:

hxxps://www.socointernational.com/private/downloads/LGtAU2KCckTTkQmNlgrPtg/2017_Full_Year_Results_Final_SOCO_DL_.PDF

[dunderheed] 22/3/2018 10:20

Reading the wise words from you and EE, Nige I would assume?

[nigelpm] 22/3/2018 10:15

All this constant nod and a wink from holders about transformative 'news' and 'deals' is a bit desperate.

I actually have some sympathy with you here on this. It's one of those things you either believe management or you don't.

Out of interest, what keeps you interested on reading and posting to the board?

[emptyend] 22/3/2018 10:13

Just on production & remuneration:Production of 8-9 but could be more depending on outcome of work programme. Compressor issue currently trims off several hundred bopd.On remuneration, two expensive execs retiring and the two new ones are partly paid in shares.

[stepone68] 22/3/2018 10:04

Hi SteMiS - the 8-9k is not dependent on 2018 drilling - it's the additional above this that depends on drilling - "Production guidance of 8,000 to 9,000 BOEPD net with production levels above this dependent upon the outcome of the 2018 drilling programme
on TGT and CNV"

But, yes, it is still a disappointing level of production.

[dunderheed] 22/3/2018 09:41

Reserved for pram.

[stemis] 22/3/2018 09:33

As a non holder there's little in these that would encourage me to buy. At 100p a yield of 5.25% is little interest based on a rapidly depreciating asset (commercial 2P reserves down from 33.3MMboe to 28.1MMboe in the year). Deducting cash, SIA still has an enterprise value of around $320m. Annual operating cashflow of $45m at $56/bl is going to struggle to recover that over the life of the remaining reserves, and that's before the $40m of it they plan to spend on capex in 2018. Reduced production in 2017 was 8,276 boepd and they are going for 8,000-9,000 in 2018 but 'dependent upon the outcome of the 2018 drilling programme on TGT and CNV'.

All this constant nod and a wink from holders about transformative 'news' and 'deals' is a bit desperate. Hard to see why any potential partner would value SIA at more than it is now.

And all the while the board line their pockets at shareholders expense (last year 3 execs received $4.5m).

[nigelpm] 22/3/2018 09:24

Could be ee.

What still surprises me is the total lack of interest here.

Certainly if you extrapolate the current oil price back into the numbers and allow for $40m capex this year there are very few scenarios where I come up with a fair value less than £1.40.

[dunderheed] 22/3/2018 08:52

I thought it most interesting that there was no linkage in the results with the recent staff recruitment EE drew attention to recently?
I also am wondering what the Jan and Mike partnership have been up to?
They've been there quite some time now which was the only reason I assume, people were expecting BD news?
Perhaps there just isn't any?
But wtfdik? I can't even begin to contemplate the business model of an E&P company because it's just so damned complicated.

[emptyend] 22/3/2018 08:44

....well of course it might be driven by the auditors. But it's the same auditor as previous years and the business hasn't changed much in the last 2-3 years. I think it is forward-looking.

[nigelpm] 22/3/2018 08:32

Point 2 almost certainly driven by auditors I'd have thought.

No idea on point 1.

A real shame retail investors won't have access to the analyst session - I can't say I'm overly impressed there's not even a dial up for it.

[emptyend] 22/3/2018 08:24

No operational surprises, of course, given the January update. The two things I thought interesting were1) Reserves"The 2017 TGT estimated Reserves do not take into account the fully approved programme in the updated FFDP. This conservative approach will be reviewed following the interpretation and incorporation of the results of the 2018 infill drilling programme into the static and dynamic models."I note the new reserves auditor and the fact that this seems to be conducted through its Malaysian unit.2) Accounting policy changeMoving from modified full cost to successful efforts may appear to be an inconsequential technicailty......and there is something in what they say about successful efforts being better-suited to a producing company (with a strong, stable balance sheet) that is mostly focused on development. However, given that they have flagged an interest in doing deals involving development, it also occurs to me that this change may be a precursor to a merger with a development company (that also uses successful efforts). There are a number of business units of larger companies that would be a good fit for this, some of which are currently "on the block" and some of which would seem a good fit (and include some VN assets as well as other regional developments).I see this as the final stage of deck-clearing and expect more news - perhaps before the AGM.

[impvesta] 22/3/2018 07:52

I can't see anything to particularly inspire other than the dividend which continues to be a welcome and substantial return of cash. Continuing patience required for anything else, as far as I can see.

[nigelpm] 22/3/2018 07:27

Nothing new in the results from what I could see. As you were with a 5.25p dividend to be getting on with.

[nigelpm] 21/3/2018 11:47

Indeed pumph - would certainly be nice for the board to set out how they intend to create shareholder value over the next few years - they need to spend their time focusing on it - I'd very much expect the presentation to be littered with examples and a relatively good plan to go with it.

I'm expecting some very critical analyst questions as well.

I'm not of the opinion that something is going to happen fast but I remain willing to be surprised.

[pumph] 21/3/2018 11:28

Hopefully some positive information to reflect on in tomorrow's results announcement as a welcome break from continual sniping.

[dunderheed] 20/3/2018 18:48

29787, they can merge (another nigey fave) then that cuts the duff stock count down by one!

[jotoha2] 20/3/2018 17:03

Clearly you just love duff stocks nige , this and ophr , what a pick indeed.