Soco Share Discussion Threads

[kenobi] 08/5/2018 14:21

Sounds like the same stuff that was being discussed when SOCO had licences there, the sticking points will be the same, I guess it's probably edging towards some type of longer term compromise, where UNESCO come to some sort of compromise, as you say it's a shame that it didn't happen sooner, but as you say shame it wasn't done a lot sooner, at least for our sakes as shareholders.

[emptyend] 08/5/2018 10:45

https://www.businesslive.co.za/bd/world/africa/2018-05-04-drc-plans-to-allow-oil-exploration-in-protected-national-parks/....irritating......they are looking now to reclassify a fifth of Virunga so as to permit oil exploration. A decade earlier would have been helpful.......and saved an unnecessary eco-witch-hunt

[nigelpm] 08/5/2018 09:49

RE: oil prices.

I remain wholly unconvinced we will see $100 any time soon if ever. However, I'm always willing to be surprised to the upside.

[kenobi] 08/5/2018 09:47

Hopefully the rosier outlook in oil prices will feed through to a greater willingness on PV's part to drill more wells and increase production further,

K

[nigelpm] 08/5/2018 09:21

Lots of activity this morning trading wise - 60k sell lump chucked into auction at £1 and a bit of a drop on the bid - very unusual. Not seen that for a long while in morning auction.

[linton5] 08/5/2018 09:08

Someone got a cracking purchase 😎

[emptyend] 07/5/2018 17:59

Very interesting piece, thanks!I think there are some excellent comments about shale, the project pipeline crunch and, frankly, the utter complacency of many who claim to be analysts. Barclays seem to have made a sensible and honest stab - but many others seem to (to borrow from another context) to believe in unicorns.I don't think I buy $100+ in 2019........ but I don't think it will be all that short. And I do think it will follow in 2020.The paper suggests that many "analysts" have got oil prices pencilled in for 2018/19 that are $20 below today's. I am tempted to wonder what their advice will be when they change their minds. In present circumstances, I'm delighted that my perspective on oil prices seems to be in a substantial minority......and I think that will change in the next 6-9 months because analysts views seem as credible as the Remainiacs' view on Brexit .......

[apdi71] 07/5/2018 15:14

Higher oil prices in the pipeline?:

[emptyend] 07/5/2018 13:30

....and, looking at the post-tax position, net income in 2017 from continuing businesses was reported as $12.2mn (before the 100% African write-downs that, by definition, cannot continue in 2018). So at current oil prices, there would be around $32mn or so additional net income ....so say $42mn total net income p.a. at current oil prices....which is around 12p per share.So the P/E ratio at current oil prices is less than 9. And that is without any "windfall" gains from asset sales or write-backs of assets and reserves.....or, for that matter, any explo upside from 125/6 or any other deal.All these figs are v approximate (mental arithmetic in the garden) but the oil price rise surely drops right through.

[emptyend] 07/5/2018 12:16

Brent over $76 today.....so realisations at the current price level would be about $22 per bbl more than last year's average. This indicates that daily pre-tax profits would be close to $200,000 greater than last year's average......so say an increase of $65-70 mn pa in gross profit if oil prices stayed at this level.Quite significant, given that gross profit in 2017 was $41.2mn.

[emptyend] 04/5/2018 18:20

I think one has to look simply at the share price by comparison with other E&P companies. There is nothing wrong with the existing business and nothing (other than it being unleveraged) to justify a material difference in share price performance vs the other companies.....except a lack of transparency on future growth.Medium term there is a reasonable prospect of growth from 125/6 and some gains from realisations or writebacks of assets written down....but that isn't the same as having a clear growth story.That is what is needed....and such clarity is now overdue. Any fool can "nearly" do deals, but there aren't an infinite number of good asset packages (especially of material scale) out there....so having failed to do something with either Kuwait Energy and the Santos assets, I hope they have another well-justified preferred target that is well-advanced.

[dunderheed] 04/5/2018 18:01

21k reserved for Saul.

[kenobi] 04/5/2018 17:57

Just to be clear what I mean is that in the last 6 months or so, we've gone from, will the opec deal hold, will they be able to stablise oil at 60 70 dollars, to many people thinking there's a crunch coming down the line and in the short term it's more likely to drift up than down. I'm not saying its right, I personally have nothing to go on other than what I read, I would say the mood music is significantly more positive for the poo with issues like venezula for example, that's before we even consider the middle east and the Iran nuclear deal.

K

[kenobi] 04/5/2018 17:54

True Peter,

but I disagree that peoples expectations haven't changed much, there's a lot of talk about more bullish oil prices, and it has certainly helped other oil companies share prices,

K

[greyingsurfer] 04/5/2018 17:33

Though, let's not forget that any valuation of Soco depends on changes in long term expectations of the PoO, not on the short term price moves. I doubt anyone's valuation models have changed very much since the start of the year.

Peter

[kenobi] 04/5/2018 17:22

Although those figures might appear worse due to a bit of a bump at year end, we were below a pound in early december, the bump came just before the announcement of the Kuwait discussions.

K

[kenobi] 04/5/2018 17:13

yes hard to understand how it could underperform the oil price quite so much,

Hopefully the surging oil price will trigger PV to spend some money to increase production, and that might drive the price up, but we're up against relatively short timescales on the licences now, hopefully they'll be able to get those extended, and some deals will bring on some other assets which can be developed too, removing what might appear a cliff edge of production. Not to mention the reclassification of reserves at some point, though if this takes too long the problem will be remaining licence length will be short.

K

[dunderheed] 04/5/2018 16:49

Just as we are annoyed / disappointed with their under performance as the two are inextricably linked.

[emptyend] 04/5/2018 16:47

Can't disagree with that. It has certainly dramatically underperformed for the last year. However, it is still generating lots of cash and paying a reasonable dividend (which should grow if oil prices are higher). It also has a large chunk of shares held by management and others who will be even more annoyed at the underperformance than we are...........and, ultimately, "something" will happen....

[hywel] 04/5/2018 16:35

Since the start of the year Oil has gone up 15%, Soco has gone down about 7.5%, this has been a dog for a long time.

[nigelpm] 04/5/2018 14:35

Not really - people can buy/sell and go through the SETS order book so doubt that very much Linton.

[linton5] 04/5/2018 14:09

Compared to most of the oilers inside the ftse350 I think this stock is manipulated somehow

[emptyend] 03/5/2018 10:12

Presumably rectification of the compressor issues will be done at the same time as there is downtime for other reasons.

[flyinghorse1] 03/5/2018 09:57

K,
Pretty sure you are reffering to the gas compression issue.
The last i saw was mention n 2017 prelims note dated March 22 2018:

"Following installation, the operator identified a sub-optimal performance issue affecting two gas compressors on the FPSO. Evaluation of the technical solutions and requirements for further investment in the gas compression issues is ongoing and these costs will be included in the 2018 work programme and budget"