Soco Share Discussion Threads

[emptyend] 28/4/2018 20:37

I'd just observe that people should never assume that, just because material deals don't actually get done, management isn't trying very hard and/or isn't capable of delivering.Back in 2008, they came very close to selling the company to the Chinese. Had they done so, they would have been heroes and everyone here would have been long gone. And I would be amazed if they hadn't had a long and hard look at perhaps a dozen possible deals in the last year.For all any of us know, there could be a blockbuster deal ready to be announced on Monday.....

[nigelpm] 28/4/2018 18:49

All this historic looking back is utterly boring. Think of the current position rather than wasting time on what has been and gone.

[dunderheed] 28/4/2018 14:18

Ed in my humble opinion I simply don't think sia have have/had the kind of BD 'connections' that your comparators do?
Let's wait and see but I'm pretty underwhelmed to date, considering their pay packages and let's face it the clock don't stop for no one.
All IMHO of course. DYOR and no investment advice intended.

[ed 123] 28/4/2018 13:53

HaiderAliFool

With reference to your post 20914, apologies for my late reply. I was otherwise occupied all day yesterday.

I can't answer your question. What were Soco's chosen geographies end of 2015/early 2016? Anyway, why shackle with a geographical limit? Why not go to where the best opportunities are to be found?

For example, did Premier Oil have any assets in Mexico before they applied for a share of Block 7 in early 2016? Premier was in some financial distress at that time (share price c. 40p in Spring of 2016) but still was moving ahead with deals and licences. What did Soco do at that time, when it had the huge advantage of a net cash position and positive cashflow? OK, there was an element of gamble on the part of Premier but the low oil price allowed the chosen partners for Block 7 to get a good deal on their interest. Two years on and who has 25% of an oil field that may yield more than a billion barrels? Yes, it's Premier.

OK, there was some good luck involved but for me the important issue is that, even struggling Premier could see a promising prospect for the future and went for it. What did Soco do in that period when, for oil companies, cash was king?

If you want another example, look at what Faroe Petroleum (like Soco with net cash) was doing in the oil price downturn.

In a sense, it doesn't matter now. The opportunity came and it went. Shareholders, however, see the result.

In February 2016, when the oil was at its lowest:
Soco c. 150p
Faroe c. 60p
Premier c. 40p

Today:
Soco 100p
Faroe 130p
Premier 95p

You can say, fairly, that I've picked to two comparators to make a point. Yes, I have, but it does make that point. Whether a company had net cash or big debt in that downturn, it was possible to do deals and set up a business to generate a good return for shareholders.

Soco's AGM approaching once again. Will those who read this board attend and speak up on company performance and directors' remuneration?

[dunderheed] 27/4/2018 17:15

Greying I apologise if I came across aggressive. Perhaps the reason why EE grates my onions is because our free bb personas are quite 'similar'. I have been known to be called 'patronising and arrogant' if you can believe it (!) so I'm going to steer clear of this thread to save my blood pressure LOL.
Christ on a bike, you've just got to look at the title and how long it has been going to see that something is wrong!
Best of luck all.
EDIT but I'll pop back every few months to see how the BD is landing of course.

[dunderheed] 27/4/2018 16:58

What are you talking about greying when something is my opinion I am always careful to caveat it. When it is based on facts then there is no need?!
Go and look at my posts again ffs.

[greyingsurfer] 27/4/2018 16:56

It concerns me that he talks with such authority (never caveating as 'in his opinion') hence people believe it?Something I've never seen you do! Or perhaps you just don't expect people to believe you anyway :-)Peter

[dunderheed] 27/4/2018 14:44

Ok so do you mind copying my reply so he can see my post?
It concerns me that he talks with such authority (never caveating as 'in his opinion') hence people believe it?
EDIT don't bother he will not reply anyway as I am filtered and that is the reason for filter so fair enough.

[stepone68] 27/4/2018 14:42

Think ee was replying to pumph, DH, so you could well still be filtered.

[dunderheed] 27/4/2018 14:37

Empty I thought you had me filtered?!
Of the last 3 oil companies I worked for 2 had the share price as part of their kpis in relation to a pre defined peer group!! The other wasn't listed!!
It is a standard kpi for oil companies mate.
Of course the share price is something that should be owned BY EVERY staff member of any listed company hence is nearly always part of the corporate kpi's for oil companies ! LOL!!
If the company you worked for came out bottom of a comparator share price group of peer companies DO THE MGT HAVE NO CONTROL OVER THIS. Come on??!! LOL LOL.
EDIT I didn't refer to the other three before these three because this is too long for me to remember. However suffice to say the three I was referring cover the last 15 years!!

[emptyend] 27/4/2018 14:28

....and there are 8 KPIs listed, with the main "fail" item being the lack of deals done (which lopped 25% off their possible bonus).All the RemCom assessments against the KPIs look fair enough to me.NB nobody would have shareprice as a bonus KPI because it isn't a controllable. But the requirement to build material stakes is intended to generate shareholder alignment.

[emptyend] 27/4/2018 14:22

Pumph,Yes they are. See page 74/75 of the AR. They would have been entitled to receive cash but in fact they volunteered to take shares.

[dunderheed] 27/4/2018 12:37

Exactly and this should be the main part of the corporate kpi!!

[pumph] 27/4/2018 12:29

Going back to the bonuses gravy train, they are titled as 'performance related', so presumably were earned through the achievement of pre-set stretching targets, not just keeping things ticking along on a business-as-usual basis.

Are any of the measures of this 'performance' publicly declared ? Clearly the company's share price isn't one of the measures.

[dunderheed] 27/4/2018 12:14

To be really clear guys it isn't just about deferred investment over the last few years it us about a forecast drop in production due to a lot of aging fields natural declines in profiles coming on board at around the same time.
There are all sorts of technical middle east and South American reservoir issues (around efficient maintenance) that will be rearing it's heads then as well, regardless of awful deterioration in political situation in both regions as well.

[emptyend] 27/4/2018 12:04

"Distressed assets" are generally those which have big, explo-focused work programmes. Such assets/companies have NEVER been on SOCO's radar.

[emptyend] 27/4/2018 11:59

Well that's true, of course. But there are very many factors at play here - and every year depletion takes a bite and production rates from existing wells trend lower.The "big one" is what happens in the Middle East - and that remains as unclear as ever.

[kenobi] 27/4/2018 11:52

There's a lot of talk about what might happen in venezuela too, but you have to consider that opec/russia have cut production by 1.8M or so per day, so that's capacity that still exists and will come back on stream at some point, which has to be considered in the oil supply demand balance,

K

[emptyend] 27/4/2018 11:31

Indeed. Futures markets are notoriously bad predictors of oil prices. Basically they are just a derivative of spot prices and storage costs.There will be a supply squeeze sometime in the early 2020s as the consequences of cancelled/deferred investment since 2015. The only question is how big will the price impact be. I don't think $90 or so is too unlikely.

[stepone68] 27/4/2018 10:24

Ed, the price that matters will be the futures market in 2020, not the current 2020 price.

[dunderheed] 27/4/2018 10:03

See what I mean about jobs for mates?
What on earth have they done to deserve these lol!

[cwa1] 27/4/2018 09:42

Nice work if you can get it.....

Awards under the Company's Deferred Share Bonus Plan

The Company announces that on 26 April 2018, Persons Discharging Managerial Responsibilities ("PDMRs") were granted deferred bonus awards over ordinary shares of £0.05 each in the Company ("Shares"), relating to a performance related annual bonus earned for 2017, under the SOCO International plc 2014 Deferred Share Bonus Plan (the "DSBP") as follows:-



PDMRs

Position

No of Shares granted

Ed Story

Chief Executive Officer

216,692

Jann Brown

Managing Director and Chief Financial Officer

134,736

Dr Mike Watts

Managing Director

134,736

Antony Maris

Chief Operating Officer

95,268



The number of Shares granted is equivalent to the relevant proportion of the 2017 annual bonus deferred, calculated on the basis of the middle market quotation (as derived from the Daily Official List) on the date of grant (£0.995). Subject to the rules of the DSBP, these Shares will generally vest over two years from the date of grant.

[haideralifool] 27/4/2018 09:32

Ed can you think of distressed assets that were picked up by more nimble players in geographies where SIA operate?

Two distressed asset buyers I can think of bought neighbouring assets, SDX buying Circle in Morocco and SAVP buying Seven in Nigeria.

In both instances not only were the assets distressed, but also the buyers were bringing something to the party in term of fit with their existing operations etc.

[dunderheed] 26/4/2018 17:32

Ed 123 I know what 'analists' are saying but mark my words matey!!
Good summary on sia though and of course bringing back old mates who haven't performed b4 isn't exactly going to help imho. Lol!

[ed 123] 26/4/2018 17:28

Thanks, Dunderheed.

Oil price in 2020? Many supply and demand factors at play. Those who go into that market and trade will be better placed than me. Collectively they are saying around $63/bbl for Brent in mid-2020.

Assuming 8kbopd average from Soco over the next 8 years (till it potentially loses TGT) and discounting cashflows to present value, African bits possibly worthless, and add cash, I think 100p in the stock market is fair enough.

There will be other less risky and more promising stocks to hold, which may be why the seller is dripping them out.

Fwiw, I can't honestly see another oil company buying Soco. With the history of partner problems nobody would touch them, other than at a knock-down price. It would be too much of a gamble.

It's a shame for holders that management did not execute a good asset buy when oil was around $30/bbl and some were in real difficulty. It's very different now.

So, investors are left with holding an income generating business for a limited time - not the best of prospects for those who seek capital gains from equities.