Soco Share Discussion Threads

[tyler19] 21/9/2018 19:31

We all get some calls wrong, or at least the timing. I think the management at soco are partly to blame for the share price. It’s normal in the oil industry not to invest during the downturn, but not to identify and resolve ongoing technical issues such as the compressor problems at the earliest is disappointing to say the least. Normally, during downturns companies enhance recovery from existing wells. This hasn’t happened here. Hence, the management need to make-up time and quickly.

Still it’s the right time to be in oil companies.

[nigelpm] 21/9/2018 18:49

Indeed. Genuinely disappointed with two parts really.

1) My insistence that it was incredible value when there were signs of Vietnam not performing well - that was head in the sand stuff and makes me look very foolish with hindsight.

2) Missed opportunities elsewhere - although I did hold plenty of SQZ to cushion the blow here.

[tyler19] 21/9/2018 18:45

Nigelpm, I’m in a similar position to yourself but am planning to continue buying in small portions over the year ahead. I know this goes a little against grain here but I’d rather buy a company in a sector that is in recovery phase, which is undervalued and is looking to expand. Good luck to you.

[chopsy] 21/9/2018 18:44

I'm lucky enough never to have bought Sia. It's on my watch list though. I'd like to see trend reversal first.

[general george] 21/9/2018 18:38

Big selling at the end there.

I'm a bit surprised, i think the deal looks decent.

I guess going to be alot of drilling next 2 years to make the most of thr explo licence.

We end up with 15k boepd producer, with little debt when revenue from the acquisition is backdated to 1 jan 2018.

[tyler19] 21/9/2018 18:36

It’s disappointing to see the share price drop but understandable in the light of declining Vietnam production. The stock is now trading on a forward yield of 6.4%. Which allows for a slightly further drop in production. Hence, I see strong support at this price.

It’s not the sort of company you want to follow on a daily basis, but if you Look at the medium to long term I can see a recovery. Finally, the management seem to be waking up from slumber. Drilling is starting, reserves being increased, all steps in the right direction. Just need a little luck on the drilling front to change direction of the share price. Fingers crossed!!

[nigelpm] 21/9/2018 18:33

Tempted to buy back in here

If I didn't hold any I would almost certainly be buying back in.

[fangorn2] 21/9/2018 18:13

@Nigelpm

"Not selling anything here. Stubborn as sin but also not feeling in the mood to increase either."

Tempted to buy back in here

And you know how stubborn I am! :)

[nigelpm] 21/9/2018 17:27

Not selling anything here. Stubborn as sin but also not feeling in the mood to increase either. Got a reasonable position in HUR and SQZ which thankfully have served me very well indeed.

[chessman2] 21/9/2018 16:44

I’ve also been wrong for a long time so managed to sell half my holding today. Should have done so many months ago!

Hurricane has my interest now.

[nigelpm] 21/9/2018 16:38

800k traded in the auction at 80p - lots of selling pressure continuing.

Very surprised I won't deny that - been wrong for a long time here.

[buywell3] 21/9/2018 16:28

market definitely not impressed

[kenobi] 21/9/2018 14:25

yes a figure of 100 or 150 extra wells to double production was suggested, the first milestone though is to drill any unsecured areas before the expo licence runs out in 2020.

[richalert] 21/9/2018 14:06

Quite a sizeable chunk of recoverable costs (156 million) to come back, which will come out of Cost oil (Capex), I presume.

Going to take a while though.

Wonder if the "doubling of production", comes with having to drill a lot more wells to achieve the 7000 bpd from Egypt.

[thegreatgeraldo] 21/9/2018 13:45

stepone,

Yes, that's correct... you then need to visit page 34 to see what happens to those bbls.

[deld] 21/9/2018 13:31

Ed might be quite clear about doubling reserves and production but I for one would be slightly more careful of wells that are small producers and with declining production and emphasis made elsewhere of enhancing recovery (an easy throw away couple of words that usually adds up to a lot of money). So are we doubling production by drilling non stop or reacting to declining production by catch up. Time will tell but not yet convinced of the benefits to shareholders.

[stepone68] 21/9/2018 13:20

Seems pretty clear on page 10 of the presentation;

• Expected to add production of 6,500 – 7,000 bopd in 2018

[thegreatgeraldo] 21/9/2018 13:18

Working interest is a well understood & widely used term for describing production, but is the starting point for understanding the value of that production

[richalert] 21/9/2018 13:09

I listened in to the webinar, but this question was not made clear. Probably no one asked the right question.

It would be good to try and get some confirmation from management over the figures, and why they expected to double production.

[emptyend] 21/9/2018 13:05

Bit of a danger of comparing apples with oranges re production numbers. Ed was quite clear that the deal would (more or less) double production and more than double reserves.

[deld] 21/9/2018 12:40

So are we saying that broken down the 7890 bopd total production is split with EGPC getting 4296 bopd and the remaining 3594 bopd to Merlon.

[greyingsurfer] 21/9/2018 12:27

Thanks richalert, a useful set of figures.

It's useful to read that in conjunction with slide 34 of the presentation. And in fact the numbers add up, thankfully!

Merlon keep 30% as cost oil (though excess gets divided with EGPC, if there is any). Then they get to keep approx 15% of the profit oil (varies from 12-18%, presumably according to production). So if all cost oil is used for costs they get to keep around 45% of production, for costs and profit. Which just happens to fit exactly with your figures - of EGPC getting 1.6m of 2.88m production.

Of their profit oil Merlon also have to pay a 3% royalty to Stratton Corp.

Peter

[emptyend] 21/9/2018 11:38

Https://www.ebrd.com/documents/comms-and-bis/47177nts.pdf....EBRD document re loan. The JV operating company is Petrosilah.

[richalert] 21/9/2018 11:14

In order to access the accounts of Merlon it is necessary to be a registered investor. The information is password protected.

However, taken from the operations tab on Merlon website. :

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

In accordance with the terms of the production Sharing Contract, Egypt received 1.6MMBbls of crude from Fayum during 2017.



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