Soco Share Discussion Threads

[ed 123] 04/6/2018 15:40

I'll be going to the AGM on Thursday.

Have any holders, who can't attend, got a question for the Board?

[nigelpm] 01/6/2018 18:10

And no-one wants to buy either!

[rachael777] 01/6/2018 16:42

volume was unusually low today - not sure if i should read anything into it other than nobody wants to sell at these prices.....

[richalert] 01/6/2018 11:58

To be fair interest is only likely to be rekindled, once we have some encouraging news. Be it increased output, reserves update or corporate deals. Any of these may take the share price back to 160s. A couple and who knows?

[kenobi] 01/6/2018 11:49

there has been a 5.25 divi too so todays price is the equivalent of 117 as I write, not far off it's highs

[brucie5] 01/6/2018 11:34

And fell back into the bottom of the rising channel... Just needs to complete.

[richalert] 01/6/2018 11:30

We reached 120 a few days ago.:-)

[brucie5] 01/6/2018 10:26

Pattern of rising lows intact. Directors piling in. But wake me up when we reach 1.20. That's when the gaps open up: 1.40; 1.60.

[emptyend] 31/5/2018 07:36

....yes and no. Nothing special about the purchases at this point, but they have been putting 50% of post-tax salary into the shares for the last year.....and they started doing that when the shares were 150p.

[impvesta] 31/5/2018 07:17

Don't think we can read anything into these purchases as:

"The Shares were purchased on the open market pursuant to a trading plan entered into on 9 February 2017."

[ny boy] 30/5/2018 23:54

Resuming the upside, bear trap at 104p today! More Director buying, always a-good sign.

[ny boy] 29/5/2018 10:39

Added more this morning, some good buys around imho

[brucie5] 25/5/2018 12:22

robowen,
Chartwise, you buy the retraces within a recovery pattern. So if you believe this is the recovery, this is could be a very good day to buy SIA.

NAI.

[nigelpm] 25/5/2018 11:58

Just joined this board as interested in SIA.

Love this nigelpm guy who said the 30% increase in the share price was so obvious yet then does this!

This ain't mumsnet mate. Go and troll somewhere else for your kicks.

[robowen65] 25/5/2018 11:52

Just joined this board as interested in SIA.

Love this nigelpm guy who said the 30% increase in the share price was so obvious yet then does this!

Decided I couldn't resist 118.6p with the 5.25p dividend entitlement coming tomorrow.

[costax1654x] 24/5/2018 20:05

I bought some shares today just in case!Anyway fellow investors have a look at AEG I personally think that it will multibag.Good luck here!

[tyler19] 24/5/2018 19:43

Kenobi, I agree with you there is uncertainty. Mainly within the industry assessing the risks posed by alternatives. This is partially due to the hype created around alternative energies. The jury is still out. However, oil demand forecasts are being increased for many decades to come. Add depletion rates to the equation and things start looking favourable. The Saudis are expecting an oil crunch in 2020 and are starting to invest in capacity. The shale boom in Texas has only been economical so far due to the existing infrastructure which is now reaching full capacity and further increase in production will require new processing, storage and distribution facilities which take time to build. Lastly, OPEC will act to look after its self interest. I suspect WTI around $80 would be desirable providing it doesn’t impact demand. However, the spare capacity within OPEC is of low grade, heavy and sour crude which many refineries cannot process. Hence, oil price is likely to surprise on the side. The uncertainties amongst investors will remain resulting in greater volatility but with increasingly clear uptrend. Great time to accumulate on the dips.

[tyler19] 24/5/2018 19:01

Tournesol, historically oil companies have invested heavily when the oil price has risen and have often over invested creating excess capacity and vice versa, hence a good indicator of oil price. I appreciate that you disagree, this is what makes a market. As for alternative energies, these will grow and take a greater share of the energy market in the years to come. For me it’s the timescale over which the switch over occurs. I don’t see this happening in the next business cycle. Urbanisation is continuing at a rapid pace in most of the developing world including China and india and not to mention other high population countries in a similar position. Adoption of alternative energy still faces many technical hurdles. I’m bullish on oil and oil companies, barring a major recession. In addition countries like using multiple energy sources for strategic reasons as well technical. Oil may still remain the main source of energy even with adoption of electric cars with technologies such as carbon capture at power generation point. Why build lots of new facilities when existing facilities can be modified economically.

[stepone68] 24/5/2018 16:24

If production increases and/or a license extension is agreed, the price will react without waiting for a new audit. (hopefully!)

[emptyend] 24/5/2018 15:39

YASRUB, re the licence length you may have put your finger on why they haven't yet "pushed it" - I've thought for the last 18 months that a licence extension will be applied for at some point, with the only doubt whether the extension is contractual (under the JOC's licence terms) or negotiated (for which there is precedent in VN).But there may be a simpler explanation, which is that Senergy are new to the field and they may want to see the impact of the 2018 work programme first? Slightly odd, I think, to have picked the effective date for the reserves assessment as 1st September, but it may very well be the case that the timing (and perhaps choice of auditor) was driven by some possible deal timing expected?So it is therefore difficult to pin down the timing in relation to HA's question......but the short answer is that the reserves would have to be reaudited. I suspect, though, that a licence extension may happen first.

[yasrub] 24/5/2018 13:29

I raised the reclassification possibility a couple of days ago - I am assuming it is now more to do with the partners alignment to the work programme - my uncertainty was over what would be the constant production volume required over the life of the licence left ?

[haideralifool] 24/5/2018 13:12

Must say that item 1 in that list looks pretty compelling. What would be the steps needed now to get the reclassification formalised?

[emptyend] 24/5/2018 11:46

Just looking at "cashflow from operations" as a metric and using 2017 as a base for forecasting 2018 (based on prices staying flat from here but with production at 9,300 bbls, assuming modest success from the compressor work and drilling) I'd see cash from operations getting close to $150mn for 2018 (mostly in H2, so I think the results at the interims stage should be quite bullish in the outlook, both for cashflow and reserves - assuming reasonable success with the 2018 work in H1).

This compares with:
2013: $314.2mn
2014: $251.2mn
2015: $ 80.3mn
2016: $ 46.0mn
2017: $ 45.0mn
2018: $150.0mn?

....and that is before any "windfalls" from deals, asset sales etc.

And who knows what 2019 would hold?

[emptyend] 24/5/2018 11:09

SteMiS,
To repeat previous comments:
1) There is an embedded reserves reclassification pending, as flagged on p22 of the AR. No value is given for this but, when the reserves were reclassified downwards in 2015 the circumstances at that time were that no work programme had been agreed and the oil price had fallen. Now there has been a significant recovery in the oil price and we have a fully-agreed FFDP and work programme, so the 2015 circumstances have largely been reversed.
2) $220mn of African assets have been removed from the balance sheet via a combination of restatements, accounting policy changes and the technical impairment resulting from the fact that SOCO have no plans for further investment in those assets during 2018 but they have yet to agree a deal to sell them or to otherwise bring them into production - so they cannot report those assets as either held for sale or as producing assets (even though they acquired a full suite of production licences in 2017.
3) Compressor repairs and 2018 drilling can be expected to add to production. How much? Perhaps 10-15% is a fair guess (as again flagged in the commentary)

Difficult to say how much all these things are worth but they are certainly material. Also material is the oil price rise, 50% of which drops right through post-tax. Prior to the reclassification shock in March 2015 the shares were trading in the 250-300p range during the first two months of 2015 with Brent at about $60 (having recently plummeted from $110 to under $50 in the last few months of 2014)

....and then there are the blue sky unknowns of deals and the upside potential of 125/6

There has certainly been a loss of some time value over the two-year haitus but,on the other hand, the uncertainty over the receipt of the c.$50mn Mongolia payment was favourably resolved. I would argue that, in the round, there is now an extremely clear and substantial undervaluation, even before taking account of the "blue sky" points....

....how much of that is common across the sector is difficult to gauge though but, for comparison, Tullow was trading in early 2015 in a 280-400p range (280p when SOCO was 250p immediately before the reclassification prelims announcement in March 2015) and Premier was trading in a range of 120-180p in early 2015 and at around 130p when SOCO was 250p. Both Premier and Tullow have, in recent days, been back at the 130p/280p where they were in March 2015. SOCO, however, has not recovered to even half its March 2015 value.

I would hesitate to argue that it should be worth the 250p per share it was in 2015, even when we get to see what the three points above are really worth - but I am pretty clear that, when those values can be proven, the shares should be 200p+ ceteris paribus.

Of course, sentiment for SOCO remains on the floor at present - but I don't think the company could have been any clearer about what their expectations re reserves write-backs and the production outlook. And the perennial question of what the African assets are worth won't be resolved anytime soon (but remember that they were largely ignored by the market back in 2015 anyway).

You are perfectly entitled to say "meh....come back when these points have been proven" - but IMO the price will be at least 50% higher by that time (relative to other E&Ps).