Soco Share Discussion Threads

[thegreatgeraldo] 21/9/2018 10:39

Something for the weekend.....

hxxps://www.socointernational.com/private/downloads/AnRvnegstqDO3zM7ewtRnw/20180920_Presentation_DL_.pdf

slide 34.

I was looking for some accounts for Merlon to illustrate what the production delivers to the bottom line.... couldn't find them in the pres

[thegreatgeraldo] 21/9/2018 10:32

Yes, but as above, working interest is not entitlement

[kenobi] 21/9/2018 10:27

yep that does sound pretty conclusive, it sort of suggests that the jv is not 50 50 then, that it's 100% owned by merlon, with a representation by the noc, probably still calling the shots, or at least sanity checking that merlon proposes ?

[dunderheed] 21/9/2018 10:27

I think we're going around in circles here lol!

[thegreatgeraldo] 21/9/2018 10:25

"net" working interest...which when you hold 100% WI is the same as "gross" working interest

[deld] 21/9/2018 10:18

This is where some of the confusion comes from. The RNS refers to 7859 bopd(net). Merlon own operational pages refer to 7900 bopd (gross).

[thegreatgeraldo] 21/9/2018 10:11

From yesterday's RNS,

...."The acquisition is expected to add immediate cash generative production and incremental 2P (net) working interest reserves of 24 mmbbls and 2C (net) working interest resources of 37 mmbbls. Merlon produced 7,859 bopd (net) in 2017, with the potential to increase production levels to a target in excess of 15,000 bopd (net) by 2023 through the recovery of its discovered 2P reserves and 2C resources."....

2P of 24mmbbls producing 7859bopd (c. 2.8mmbbls PA) sounds about right.

[kenobi] 21/9/2018 10:01

ee has suggested that the jv is a 50 50 split between merlon and the national oil company, the figures quoted are the jv production figures, either merlon owns 100% of the jv, in which case it's not a jv, and the numbers are correct or it owns 50 % and the numbers net to merlon should be half. I don't know which is the case,

[dunderheed] 21/9/2018 09:57

I think people may be seeing gross as Merlon plus govt share?

[thegreatgeraldo] 21/9/2018 09:55

Given that Merlon have a 100% working interest in the concession, I fail to see the distinction between gross & net working interest. The RNS yesterday referred to "net" working interest a number of times

[dunderheed] 21/9/2018 09:53

Cheers deld and thanks very much for replying to my point!
Oh blimey don't like such circumstances full stop but I'm 'old school'.
Sorry to bother people but any idea of trucking distances plus any security issues thereof?

[richalert] 21/9/2018 09:45

thegreatgeraldo!

Gross was the wording I was questioning. I presumed that I understood working interest.

[thegreatgeraldo] 21/9/2018 09:35

Working interest is....errrrr....working interest. Not to be confused with entitlement

[kenobi] 21/9/2018 09:28

that's a very good question richard, I too had understood this, but I too wonder if half of this production is actually not merlons at all,

the link below seems to suggest those figures are the jv's not net to merlon,
I find this surprising as I hadn't understood this from the conference call yesterday, in fact I don't recall any mention of the jv there at all,

K
hxxps://energyegypt.net/merlon-jv-petrosilah-to-invest-55-million-in-oil-exploration-in-egypt/

[richalert] 21/9/2018 08:00

Deld.

Gross working interest daily production averaged approximately 7,900 BOPD over 2017.

I read this as daily production attributable to Marlon after deduction of PSC.

Am I right in this assumption?

[emptyend] 21/9/2018 07:42

On the pipeline question, that was discussed on the conf call and more or less ruled out "unless production gets over 20,000bopd". It is worth noting that the unexplored area in the north where 3D is planned is substantially nearer the main pipeline than the present production areas to the south. No idea of the roads/tracks routes though....

[emptyend] 21/9/2018 07:34

......and vice versa. Obviously. As it has always been. And always will be.The benchmark in both Vietnam and Egypt is Brent (and NOT WTI)......and the Egypt price appears to be c. $4 under Brent whereas the Vietnam price is usually $2-3 above Brent.

[deld] 21/9/2018 04:07

Kenobi 21565

Does Merlin have a PSC. Yes, according to their operations page in 2017 they supplied (gave away) 55.4% of the 7900 bopd.

Dunderhead 21599

Drill plus completion plus connection to pipeline. No pipeline connection. This is a truly African adventure with trucks hauling the oil to Tebbeen - about 70 km away.

[redartbmud] 20/9/2018 22:20

Just picked up the crude price quoted by Money AM. Soco may achieve a price somewhere between the price of Brent and WTI Crude. ($78.58 and £70.14 respectively).
The facts remain the same EE - for every $1 fall in the oil price achieved in sales results in $1 off the profit realized by the company.

Simples....

[emptyend] 20/9/2018 21:07

..err....Brent is $78.50

[redartbmud] 20/9/2018 20:47

At the current oil price of $70.78 per barrel, this deal may look good, but what happens if or when we see another marked decline in the price?
Are the current owners getting out at the top end of the market and laying off that risk?

[emptyend] 20/9/2018 15:49

I can believe that. And, in the same way, would be unsurprised if Soco were not the highest bidder for Merlon. Issues of capacity, execution risk and the consideration mix are all important, for example.

[general george] 20/9/2018 15:17

Richalert,

Opex is not 34usd bp.
Opex is 6usd.

The 34usd is the cost from npv10 to production.

[nigelpm] 20/9/2018 15:02

oh - where did you hear that ohisay?

[ohisay] 20/9/2018 14:48

Just to say EE my information is ophir werent the highest bidder for santos