Soco Share Discussion Threads

[fangorn2] 08/11/2018 11:12

@EE

Don't forget GENL and GKP. Both off more than SIA surely and neither paying a Divi!
:)

[dunderheed] 08/11/2018 10:50

Greying I'd say I've probably got a much better understanding than you though eh buddy?

[emptyend] 08/11/2018 10:39

Just a few comparison of "performance" over the last five years.....TLW -71%PMO -68%OPHR -88%SIA share price is down 79% over the same period and, if you adjust for the dividends, it is down 66%. There is probably an adjustment to be made for OPHR distributions too?But in sum whilst the majors are up 10% or so and the likes of CNE have made much smaller losses thanks to some conspicuous drilling success, the mid-cappy E&Ps are generally similarly out of favour.That might be justified in some cases, but SOCO isn't overleveraged and is committed to paying decent dividends, unlike PMO/TLW.

[greyingsurfer] 08/11/2018 09:41

You're a bit of a one trick pony when it comes to understanding price moves, aren't you, D.

[dunderheed] 08/11/2018 08:13

R U kidding EE?
There is poor sentiment for poorly run o&g companies. Simple.

There have been many very fair revaluations of assets and mgt teams over the past couple of years in line with oil price strengthening?!!

[emptyend] 08/11/2018 08:07

The bottom line here is that there needs to be the prospect of growth. 125/6 offers that in due course. Meantime the Merlon deal offers that too. But it isn't yet done and the EGM circular (with all the detailed info eg on the assets and upside) is still awaited.Meanwhile there is still nothing new on organic production growth, despite the drilling on CNV (which I hope is very near completion now) and the plans for compressor remediation on TGT. But those are a plus 10-15% issue.....and the real problem has been poor sentiment towards oil and gas companies, despite a reasonable outlook on fundamentals.

[lauders] 08/11/2018 01:48

I wonder whether SIA will actually ever go up? With the DOW closing up 545.29 yesterday and oil continuing to dip a bit I suppose we will have to wait a while. This company's share price performance is enough to try countless saints!

Only relevant quote I have found on SIA in the media so far for a while is: I think we’ve seen something like that happen with Soco International,for example, where a lower valuation has depressed the share price to a shadow of its former self.

It sure is a shadow of its former self!

[emptyend] 03/11/2018 11:51

https://asia.nikkei.com/Economy/Vietnam-primed-for-M-A-boom-as-foreign-ownership-limit-eases

[emptyend] 31/10/2018 19:40

Good spot/question. My own guess is that they may want to interpret the 3D after the ENI well has been drilled in the adjacent block. I think this is expected in late 2019 or early 2020.But there could be a range of explanations.

[flyinghorse1] 31/10/2018 15:44

I did note in the interim's -"deferral to 2019 of seismic acquisition
on exploration Blocks 125 & 126 in Vietnam"

A conversation with with a seismic friend revealed that the seismic acquisition business is in a terrible state with much consolidation and CNOC moving in and few big service operators shooting new surveys for clients.

The O&G business prides its self in Seismic (3D/4D) as being a key enabler in placing wells, defining STOIIP/GIIP and maximizing reservoir recovery.

Some operators see it as a means (by owning acquisition cos)to leverage in on acreage.

It would be a real blow if industry seismic acquisition capacity has been lost or at best we have to wait to get surveys done at whatever cost. SOCO dont state why a delay but i wonder if the two are related.

FH

[emptyend] 31/10/2018 15:05

Re the circular, there will be much more detail in that about both the deal and the assets.As regards "another year" I was referring explicitly to getting a handle on the scale of potential upside in the north of the concession. The production and profit increase should be in the accounts for 2018, assuming the deal completes in Q1.....but until the deal completes (I assume) they won't be able to get on with investing in the assets to raise production more quickly.I see most of the next 4-6 months as a Vietnam newsflow story plus a greater understanding of the Merlon deal. Remember the 2019 work programme will be agreed in a few weeks time..... hopefully pointing to increased production there!

[tomke22] 31/10/2018 13:35

The link looks like paid PR to me and I am not saying that it is wrong to pay for PR.

Re: 21847
To me it seems illogical for the market to be waiting for an EGM circular?
The terms of the deal are known and the market reaction is known, no reaction.
..little visibility on the outcomes there for another year..
Another year! I was rather hoping for some positive newsflow sooner than that.
So holders should hold on and hope?

I can see the logic of the deal from the Sellers perspective who get cash and tradeable paper. So for Soco Merlon is a deal which may pay off in 2+ years time.

[emptyend] 31/10/2018 12:10

....interesting piece.CNV well to TD "imminently".....and further down it suggests that the current market cap might be roughly equal to one year's revenue, post deal completion.I'm in no doubt that there will be a material rerating at some point. What will trigger that and when, however, is more difficult to say. IMO it would be helpful to resolve the compressor issue in Vietnam and make it clear that production there has finally turned around. Perhaps the CNV well could be a start?

[emptyend] 31/10/2018 10:58

It goes further than that. The payments position in Egypt is not only improving, there is a clear path to eliminating the backlog - before SOCO reach the point of materially ramping up production.As might be expected, the market will be waiting to see the EGM circular before making its mind up. To my mind the upside potential of the under-explored north of the acreage is the attraction of this deal - and there will be little visibility on the outcomes there for another year.

[tomke22] 31/10/2018 10:27

It looks like the market's view is that investing cash in Egypt is like investing in Russia. As the Buffet adage goes,something like "only invest what you are prepared to lose that way you won't be disappointed". He also tells the story of when he was investing the cash in Russia everyone was happy but when he tried to take the profits out it started to go wrong.


There was a line I remember in one of the updates on the investment that getting cash out of Egypt had proved difficult recently but that Egypt had undertook to improve. The market it appears to have priced the Egypt investment using the Buffet maxim.

Tom

[lauders] 23/10/2018 05:16

Thanks for that 777! Shame it is not "one of the top shares on everyone's oil market buy list". We might all be a bit happier here if it were at the top! One day it may be though. I have been patient here and will no doubt continue to be while collecting that retained dividend ;-)

[seven7seven] 22/10/2018 10:08

A snippet from an article by Roland Head @MotleyFools.Some may not be fans of Motley Fools but nevertheless it's a good article.A snippet from the article which is of significance here is as follows:How can you tell how profitable an oil company really is? With oil prices having made a strong recovery from their 2016 lows, most companies' profits and margins are rising.That's good news for shareholders. But over the long term, rising profits don't always translate into market-beating shareholder returns.You see, oil companies annual profits are driven by operating costs per barrel in their reporting. But the cost of developing oil and gas projects is sometimes greater than the cost of operating them. Only by adding development costs and operating costs together can you understand the full-cycle cost.This all-inclusive measure gives us a longer-term view on profitability. We can use it to estimate whether a company is generating real wealth for shareholders, or whether it simply recycles profits into new projects without any residual gains.An easy alternativeCompanies don't always provide their full-cycle costs. But you can get an idea of how profitable a firm's investments have been using a standard accounting metric called return on capital employed, or ROCE. This compares operating profit to the capital invested in a business,(Then it gives a six year average for the 4 companies he's covering with a ROCE percentage)Soco International (LSE: SIA)13.0%Royal Dutch Shell6.0%BP1.0%Premier Oil (LSE: PMO)-0.7%Why I like SocoVietnam-focused Soco has paid generous dividends for a number of years, while maintaining a net cash balance. It's no surprise to me that it ranks highly for ROCE.Perhaps by chance, Soco also recently published the full-cycle costs of an asset it's planning to acquire. Merlon's El Fayum asset in Egypt's Western Desert has operating costs of just $6 per barrel, but a full-cycle break-even cost of $34 per barrel.Both numbers look attractive to me, but what's so interesting is the difference between them. Perhaps this focus on full-cycle costs is why Soco has historically generated a higher ROCE than many of its peers.After recent falls, it is one of the top shares on my oil market buy list.

[nigelpm] 18/10/2018 17:55

Agreed with Ken. Fine not to RNS but twitter feed on website would be good compromise.

[emptyend] 18/10/2018 16:24

Sound advice, Kenobi. I'm sure Billy will take note.

[kenobi] 18/10/2018 15:54

yes I agree EE, but you can't use twitter to release information about about the company, even if it's not judged important enough for an RNS on a twitter handle that very few know about. I'm not suggesting that they run adverts during the superbowl, just list it in their contact info, or send this info out to those subscribed by email too. They shouldn't and they shouldn't want to. Surely if you're taking the trouble to push out info you want the widest coverage possible as pay back for your efforts ? Best to get it out there, and if you're using twitter, best to publicise it, at least on your website

K

[lauders] 18/10/2018 15:21

Not exactly my favourite source of information which is why I don't subscribe, but....

Sometimes it is hard to fathom why a company with strong fundamentals continues to be unloved by the market, and for me that is very much the case with SOCO International (SIA) at the moment, and has been for some time now. Lately the share price has slipped and is now trading at around the 88p level, and whilst it has bounced around 10% from the recent low of 80p that we saw, it still seems incredibly cheap at a market cap of just over £300 million, especially when you consider the current strength in oil prices.

Gary Newman, the author, has always been a SIA bull from what I know. Now if SIA were to just let the market know about ANY good news via an RNS perhaps the share price would react?

[emptyend] 18/10/2018 15:18

As you know, some companies (facing a similar problem and using the same PR company) have used a website FAQ. Others also have their Twitter feed on their website. The latter seems more appropriate in this case, IMO. I think all these things are evolving. As you know, the existence of discussion boards makes people voracious for news in order to have things to discuss and debate. And if they don't get it then people start arguing about Brexit or using advanced Kremlinology to read things into previous RNSs that actually don't exist (and which people quickly come to view as a "truth" which they then cease to challenge). Or indeed to question the bona fides and parentage of the management or board. Basically bulletin boards abhor a vacuum of information......so when there is some small piece of real news it is best to get it out there, I think.

[greyingsurfer] 18/10/2018 14:44

It is my belief (based on some recent exchanges and some knowledge of the way their advisers operate) that Soco have changed their approach to putting out small items of news, so keeping an eye on the website and the Twitter feed seems sensible.
What will be interesting is whether the CNV sidetrack outcome merits an RNS or just a tweet.....

You raise an interesting point. I can't find the news on the website, only the tweet. I can understand the basis for only issuing RNSs for notifiable news, and social media for small updates - but I would have thought it should be on the web as well.

I have suggested they might consider doing so.