Soco Share Discussion Threads

[pineapple1] 25/3/2019 16:37

£27B black hole due to loss of UK fuel duty would need to be filled. Peeps will say that they 'll tax electricity appropriately but that idea is full of holes re avoidance unless they intend to apply the tax wholesale to electricity which will not go down well with those who have no EV.
imho

[brick tycoon] 25/3/2019 15:13

One look at the long-term share price suggests this is the archetypal Boom and Bust share. As for Peel Hunt's recommendation, well, they were hot on Carillion and Interserve and we all know what happened to shareholders there!

[pumph] 25/3/2019 14:07

No it isn’t in place, as there isn’t enough generation capacity here or worldwide, let alone the transmission and distribution network capacities to deliver the energy. Add into the equation the decarbonisation of building heating systems as well as electrification of transportation and the extent of investment required to move to much greater use of electricity is absolutely staggering. This will also take decades to achieve, particularly in the U.K. with our tradition of taking ages to even get infrastructure development through planning, never mind construction.

[deanowls] 25/3/2019 12:52

Just as a general question. Where does all that electric come from? I know not oil but do we believe the infrastructure is in place for EV.

[oilinvestoral] 25/3/2019 12:30

Thank for that insightful post / warning buywell! Based on it I have decided to sell my 118,450 SIA shares! Don’t know what I would’ve done without it!

[emptyend] 25/3/2019 12:27

Peel Hunt upgrade to Buy with a 130p price target....https://twitter.com/whatsonthorold2/status/1110128429503053825?s=21

[buywell3] 25/3/2019 11:05

IMO OIL is due for another drop

[laptop15] 22/3/2019 11:44

What's the news flow order due here guys? Any idea? Production update soon? Or financials

[pineapple1] 22/3/2019 09:46

“Perfect Storm” Drives Oil Prices Higher - Oilprice .com

'Oil prices have already hit four-month highs, forcing a range of analysts to overhaul their expectations for this year.

“The latest Brent rally has brought prices to our peak forecast of $67.5/bbl, three months early,” Goldman Sachs wrote in a note. The investment bank said that “resilient demand growth” and supply outages could push prices up to $70 per barrel in the near future. It’s a perfect storm: “supply loses are exceeding our expectations, demand growth is beating low consensus expectations with technicals supportive and net long positioning still depressed,” the bank said.

The outages in Venezuela could swamp the rebound in supply from Libya, Goldman noted. But the real surprise has been demand. At the end of 2018 and the start of this year, oil prices hit a bottom and concerns about global economic stability dominated the narrative. But, for now at least, demand has been solid. In January, demand grew by 1.55 million barrels per day (mb/d) year-on-year. “Gasoline in particular is surprising to the upside, helped by low prices, confirming our view that the weakness in cracks at the turn of the year was supply driven,” Goldman noted. “This comforts us in our above consensus 1.45 mb/d [year-on-year] demand growth forecast.”

Demand in China is growing at a stronger rate than expected, while other emerging markets are set to shake off a rough 2018 that saw a strong dollar, rising interest rates and high oil prices.

Meanwhile, other analysts are also similarly bullish. “As risky assets focused on macro concerns, oil markets have largely overlooked supply-side tightness in 1Q19 that has helped global oil markets to rebalance since the end of 2018,” JPMorgan Chase said in a report. “With a potential for a US-China trade talk resolution emerging, oil prices should finally break out of the narrow trading range and should be supported in the very near-term due to policy-driven supply-side tightness.”

A supply deficit could become rather significant, the bank said, with total oil products demand growth at 1.03 mb/d against supply growth of only 0.3mbd. The second quarter is particularly tight. “As OPEC+ cuts begin to bite and non-OPEC supply tightens in 1H19, due to Canadian curtailments, a temporary US production growth slowdown, and maintenance in some of the key global oil fields (Kashagan particularly), we expect 2Q19 to have a theoretical tightness of over 1.2mbd in global balances.” A supply deficit of 1.2 mb/d is rather notable given the roughly 1.5 mb/d surplus in the fourth quarter of last year, the bank said.

Both Goldman Sachs and JPMorgan see the supply deficit fading in the second half of the year unless OPEC+ continues to over-comply with the production cuts. U.S. shale could rebound from the current lull, while the fate of OPEC+ compliance is up in the air. “Hence, we think OPEC+ cuts will need to be extended not just to the end of 2019 but also into 2020 if they want to avoid another oil price crash,” JPMorgan wrote.

Of course, there is no shortage of uncertainty to these – or any other – price scenarios. In particular, the Trump administration will have a lot of influence over what unfolds this year in the oil market. Trump has helped exacerbate the crisis in Venezuela, where the output declines had somewhat stabilized late last year. Venezuela’s production fell by 142,000 bpd in February, while the losses this month have the potential to be even worse.

The U.S. is also weighing the expiration of sanctions waivers on Iran, and the tight oil market could force Trump to extend some of them. The Department of Energy could also release oil from the strategic petroleum reserve, while the U.S. Congress is working on NOPEC legislation, which could threaten OPEC coordination. Moreover, it is unclear how OPEC+ might respond to any of those actions. For instance, Saudi Arabia could ramp up supply to crash prices in response to NOPEC being signed into law. Or, they could continue to over-comply with production cuts after making the mistake of abandoning them too early last year. The permutations are endless, so take each price forecast with a grain of salt.'

[buywell3] 22/3/2019 01:42

Ford has just announced it is joining the race to make EV's spending circa $1 Billion
Ford plans to revamp Michigan plant for 2023 electric car production.


Every major car manufacturer is now trying to be first with a family EV that will ensure their survival in the next generation car market.

The upshot of this is we now have a race on our hands between these car giants

They know that not all present combustion engine car manufacturers are likely to make the transition , some will go bust, namely those that join the race for change last.

Hence previous estimates of how long EV's will take to become the major transport vehicle on modern day roads is now wrong. The time scale will IMO now be shortened by 50% ... things are moving fast and faster still.

Thus the impact on OIL will be felt sooner than OILIES every dreamed was possible

Delhi drives push for electric vehicles in India
Financial Times-20/03/2019
The reason comes down to the relative economics of today's electric cars, with their higher upfront prices but lower fuel costs

China buys one out of every two electric vehicles sold globally
Quartz-18/02/2019
That's more than half the electric vehicles sold worldwide in the same period, according to data released last week

[0rient] 21/3/2019 17:39

Disappointing we couldn't gain some traction after the two big volume days..SOCO definitely the ugly bird sat by herself in the club! Lets hope a sugar daddy comes along at some point!!

[0rient] 21/3/2019 17:39

Disappointing we couldn't gain some traction after the two big volume days..SOCO definitely the ugly bird sat by herself in the club! Lets hope a sugar daddy comes along at some point!!

[buywell3] 18/3/2019 18:14

More BoD buying would be good

[emptyend] 18/3/2019 17:59

T,They very frequently are! But SOCO is now an exception (having effectively written off all intangibles other than 125/6).It remains a good general rule to be sceptical and to examine the notes on accounts extremely closely.cheersee

[tournesol] 18/3/2019 16:54

EE

thanks for that, much appreciated

I'm obviously behind the times

I've always thought of extractive co's balance sheets as almost irrelevant

I'll update my intellectual model

regards

T

[cascudi] 18/3/2019 14:41

According to advfn the net tangible assets per share is 116p

[emptyend] 18/3/2019 13:36

In the past (when SOCO's book value was mainly represented by intangible assets being valued at historic costs, and not market value) I have argued that book value is a very poor guide.However, all but about $5mn of SOCO's book value is now represented by assets in production, which are subject to rigorous annual tests for impairment (ie ensuring that the value of the assets in production is AT LEAST as much as the book value). This makes book value very much more reliable as a base value, especially with the company also having changed their accounting to successful efforts, which will expense any unsuccessful explo spend in the P&L).Whilst the headroom on the CNV (or is it TGT?) asset is quite small, by implication there is good headroom on the other asset. And that is even more comfortable in the event of licence extensions (because the value of the assets will go up pro-rata).So it is important to recognise that SOCO today is a fundamentally different animal today compared to 2-3 years ago, with a vastly cleaner balance sheet composed mostly of tangible assets in production. Accordingly, the discount to Net Assets is a material investment consideration, IMO.

[tournesol] 18/3/2019 13:13

cascudi

please explain what you mean by "book value" and why it is relevant to the valuation of an extractive business.

T

[cascudi] 18/3/2019 12:55

Current share price 30 per cent below book value, dividend is 7 per cent and it is covered. This should fly imo

[emptyend] 18/3/2019 12:01

....do those trade reports suggest that there were three blocks of 2mn shares traded out on Friday afternoon? Perhaps that has indeed cleared the seller out?

[emptyend] 17/3/2019 18:06

Don't think Mystic Meg had that many votes.....

[oilinvestoral] 17/3/2019 15:37

Redhill

People have voted because they have understood what I meant!

Anyway it’s a moot point! We ain’t merging with OPHR so it doesn’t matter!

Hopefully we get some news tomorrow or at least high volume continues !

[general george] 17/3/2019 11:06

I'm glad we have sorted that out......

I'm intrigued to see if there is any news tomorrow!

[redhill9] 17/3/2019 10:56

oilinvestorAl16 Mar '19 - 22:37 - 22416 of 22417
0 2 0
I know GG, my point is paying them in equity is less of a price to pay !

I'm puzzled why people have recommended this post - it's utter nonsense. The price is the price however it's funded.