Soco Share Discussion Threads

[emptyend] 22/4/2019 07:41

....ps....,having said that, I do agree that one cannot rely on the pace of growth. But that applies everywhere.

[emptyend] 22/4/2019 07:40

Hi T,I read Mick's point as being based on production growth, given the aim of doubling production by 2023 - as well as the fact that other growing E&Ps have low or zero dividend yields.I'd also note that a well on 125/6 is likely next year, and this will follow an ENI well on an adjacent block. That has basin-opening potential, especially if it is oil and not gas.You'll also recall that, in Egypt, securing the acreage to the north of the block (with potential resources of 500mn bbls) is a near-term priority.So I think there is plenty of room for optimism, not based on a rerating and an overdue market recognition of SOCO's investment attractions, but firmly on the growth potential over the next 2-4 years.rgdsee

[tournesol] 21/4/2019 17:27

Hi EE and others

I'd like to clarify my previous comment.

Firstly I'm expressing scepticism not so much about Soco as about Mick1909's analysis.

He said ...as long as oil stays around this level the dividend payment will only go up so naturally the share price will do as well so even 130p could be cheap by the end of the year….

I do not think that makes any sense at all. The healthy dividend has not stopped the share price from weakening over the past several years. It follows that it cannot be regarded as enough support to arrest the decline and reverse it. 130p by the year end would represent an increase of around 75% and would automatically reduce the dividend yield very significantly. That seems vanishingly unlikely to me. Would anyone apply the same logic to any other company paying dividends of 7%?

Secondly, I'm not criticising the specific Egyptian assets recently acquired by Soco. I'm simply observing that Egypt is one of many less developed countries where things always take longer than you expect. That holds true even when you adjust your expectations.

It might be that Soco's Egyptian project goes gang busters. It might be that great things happen in VietNam. It might be that there are other new initiatives that prove transformative. But it seems unlikely to me that any of those possibilities can be expected to drive an increase of 75% in the share price by year-end.

Thirdly, when I said things would not come right anytime soon I did not mean never, just not as fast as Mick suggested - ie that a 75% increase by year end was unlikely.

Having said all of the above, I would be delighted to be proved wrong. I have a soft spot for Soco and have done reasonably well out of it over the years. I'm quite happy with my two holdings in the E&P sector but Soco is always on my watchlist so I'm ready to change my mind at any time. It certainly does not look exactly over-valued at present.

It's possible that I'm feeling grouchy about Egypt because I've had an unsatisfactory experience with SDX where I recently exited with a loss of about 40%. Perhaps Soco will overcome the difficulties which have clearly exceeded SDX's management capacities.

Good luck to you and other holders. One day I might rejoin you.

T

[yasrub] 19/4/2019 16:04

Hi Tournesol

Fair comment on Egypt, with reference to SDX I believe not such a good example. I recall your initial enthusiasm when their head man was shall we say a little liberal with his wording on the initial find at SD. Subsequently the latest delay was buried within another announcement and reasonable to conclude unacceptable.

[lauders] 19/4/2019 15:49

That is indeed my experience working in the Middle East for 16 years too tournesol. However, perhaps SIA have a better understanding/association with the team in Egypt. They seem to have a history already. Still, the "every day" workers are another matter and praying 5x a day does tend to interrupt the flow a bit. We shall soon find out I suppose. Is it going to be any worse than Vietnam is another point to ponder. Hasn't exactly been a rocket either!

[emptyend] 19/4/2019 15:20

Hi Tournesol,Re the "won't be anytime soon" comment, I'm not sure about that. I've gone back to my notes from the deal conf call in September:- will take 150-200 (

[mick1909] 19/4/2019 13:54

I've been investing for 9 years now so have a fair idea how TA works but you can't rule out fundamentals which you do state but I see the start of March being that trend reversal and it is being backed up with its year on year dividend and an increase in capex costs with Egypt so as long as the price of oil is around these levels then soco will continue to grow and pay higher dividends which will drive the share price higher

[yasrub] 19/4/2019 12:22

Hi Tournesol

I always value your opinion and working knowledge of the sector. Whilst I am wary of over excitement your last sentence 'If Egypt proves successful, it might stabilise the share price and even, in time, reverse direction. But it will not be anytime soon.'

I am assuming you are trying to bring a dose of realism to any over excitement but I believe you are being a little harsh suggesting it will not be anytime soon. I do not think anyone posting on these boards can be qualified to say such a thing when there are plenty of variables that could have an impact on a company share price positive and negative. By you saying this I am now questioning myself what timeline 'not be anytime soon' means to most PIs ?

Whichever way your post is thought provoking :-)

[tournesol] 19/4/2019 12:00

Mick1909

Are you new around here?

SIA shares moved sideways from 2015 through 2016

Since start of 2017 they have followed a clear and consistent downwards trend.

Dividends are all very well but they are not much good when accompanied by a reduction in share price that outweighs the dividends.

It is abundantly clear that the support provided by the dividend is insufficient to stop the downtrend.

If Egypt proves successful, it might stabilise the share price and even, in time, reverse direction. But it will not be anytime soon.

[general george] 19/4/2019 09:04

I think this is a great opportunity. Soco currently unloved, has some exciting prospects going forward. Not dissimilar to Ophir recently.
Steady far east production and now MEast too.

Add in great divi and exciting drilling. All looks interesting

[mick1909] 18/4/2019 07:35

Theres bargains to be had with shares and this is 1 of them year on year gains on dividends so high yield payer this 1 with Egypt assets to come on line later this year as long as oil stays around this level the dividend payment will only go up so naturally the share price will do as well so even 130p could be cheap by the end of the year

[quepassa] 18/4/2019 07:14

A divergence in Price Targets from two recent broker recommendations:

1. 5th. April Peel Hunt REITERATE BUY with TP of 130p
2. 9th April Jefferies REITERATE HOLD with TP 74p.

At today's price of 76p current, Jefferies' TP is already stale.

Peel Hunt's TARGET of 130p looks more realistic in my view and they see a massive 70% UPSIDE to today's price.

Momentum coming back into Soco which has been left behind in the recent positive run for oil stocks but now catching up as investors reassess the strong prospects of Soco .

ALL IMO. DYOR.
QP

[avsome1968] 17/4/2019 15:10

Hope I don't put a dampener on the recent price rise just took a slice today soco on the move

[lauders] 17/4/2019 07:42

Looks like the oil price is starting to have an impact here. Now we just need some SIA specific positive news to get the momentum going. Over to you SIA BOD.

[quepassa] 16/4/2019 12:05

given the stregnth of oil and the recent big run-up in share prices for the majors, looks to me like Soco has been left behind and forgotten and is looking distinctly cheap/good value


wouldn't surprise me if Soco soon play catch-up pretty quick.

all imo. dyor.
qp.

[pumph] 16/4/2019 11:51

Intriguing spike today (so far at least). Am I being mistakenly optimistic in thinking we’ve maybe finally started the long road to some degree of recovery ? I am genuinely hopeful that (perhaps barring going ex div shortly) we’ve seen the back of a sub 70p share price.

[stepone68] 15/4/2019 15:44

For completeness WB.

[wbecki] 15/4/2019 15:15

Why bother saying it then?

[greyingsurfer] 15/4/2019 13:18

I'm not sure why anyone bothered to respond to my remark. It was just pointing out the bleedin obvious. Yes, of course it will almost certainly be passed, but yes it does also have to be ratified, it's worth paying attention to the details, or sometimes you end up getting caught out.

[wbecki] 15/4/2019 12:46

"greyingsurfer
15 Apr '19 - 12:45 - 22544 of 22545
0 1 0
Correct, if the AGM passes the div!"


Surely a case of WHEN rather than IF??

[mick1909] 15/4/2019 11:47

That's pretty standard then as everyone should vote it through as they want a return on their investment

[greyingsurfer] 15/4/2019 11:45

Correct, if the AGM passes the div!

[mick1909] 15/4/2019 11:27

with the ex dividend date being 9th may and shares bought prior to this date and you will receive the payment on the 31st May 5.5p per share??