Soco Share Discussion Threads

[ed 123] 03/10/2016 09:54

Hi Droil46.

The TGT field is producing a lot of water with the oil. Total fluid production rate is limited by the available capacity of the FSPO. Soco management say they can perforate new zones and shut high water zones, to raise the rate of oil production. However, Soco management also say they have not, so far, been able to get the agreement of their partners to a forward development plan for the TGT field. The forward development plan is more than a year overdue.

At the current rate of production and expected decline, Soco's TGT licence will expire with a lot of oil remaining in the reservoir. Upon expiry the Government of Vietnam would take back full ownership of TGT and could develop the field for maximum returns.

The problem for shareholders (I used to be one but sold out) is what to believe. Why has there been this delay? Why is the field being operated at something less than its economic potential? When will any agreement come? What will be the detail of any agreement?

[emptyend] 03/10/2016 09:52

...one day they will actually surprise market by announcing FFDP agreement and production guidance increases. Until that sort of positive news emerges, I can understand oil price punters with size to put to work looking elsewhere. But smaller punters wouldn't be as constrained by limited size (though they may also be reluctant to get in before news)?

[emptyend] 03/10/2016 09:48

....about £3mn of trades in TLW so far today vs £50k in SIA

[emptyend] 03/10/2016 09:47

Liquidity-driven, Nigel. Its easier to put £1mn into Shell or even TLW, where there is perceived to be more gearing to oil price rises.

[nigelpm] 03/10/2016 09:28

Still at £1.35 with Oil back over $50 and Cable at 1.285.

Odd.

[droil46] 03/10/2016 09:02

Having worked offshore for years in production, I can only add that big oil companies don't do choke control to limit production. At times of low oil price, maximum production is the target unless under pet engineering. Why? oil available but not produced is known as deferment i.e. deferment oil is not recovered until the end of field life, companies want cash now not in 10yrs time.
If the have the capability of replacing high water cut wells with dry crude, great, that will give extra dollars.

[flyinghorse1] 01/10/2016 19:53

I suspect very quickly if some production wells are on choke control. Water handling may be an issue.
New perforated zones-just needs approval,mobilise E wireline unit & done--1-2days.

New wells-a bit longer I suspect (1-2 months)

FH

[emptyend] 29/9/2016 21:31

fh1, You'll recall the previous comments about the potential for TGT to be a swing producer - and that I noted after the divi announcement that they may have agreed some additional capex (thus limiting the divi).I wonder how quickly production can be increased?

[flyinghorse1] 29/9/2016 19:50

EE-Re Vietnam breaking news--thats some 19,000bbls/day

Wonder if the so far conservative and carefull management of the TGT reservoir may go out the window with new zones opened up & more wso as these are cheap ,fast access to bbbls.

I posted this in March this year which is very relevant now(post16860)
"Interesting article in March's SPE-JPT (Members) on E&P opportunity in Vietnam
hxxp://www.spe.org/jpt/

All good for further SOCO intentioned work if oil price plays ball.

Had a quick blast through and snippets were:
Expanding economy & surging internal demand-produce 340kbopd,demand 477k
New refinery/pet chem startin 2018 ($9bnusd) Nigh Son with 200k bopd capacity & supports Dung Quat the sole refinery.
Driver for energy is the upcoming Trans Pacific Partnership between 12 countries. PV generates 25% of GDP.

It says new small/medium projects in shallow water need $55/bbl usd. Oil growth resuming in 2018/19 with new fields and smaller projects. Country has strong technical capability.

On the E front there is various under explored basins,and the country is seen as a master of fractured granite plays.

30 operating companies from overseas including Exxon,Murphy,Repsol,Soco,Gazprom,Rosneft,Santos,Mitsui,Petronas. ENI & KrisEnergy just acquired exploration blocks in the vicinity of the KyLan1X gas well."

FH

[fangorn2] 29/9/2016 17:30

EE,

Flu - Pah, that's nothing compared to HN51 Bird flu pandemic in Honkers a while back :)

[flyingbull] 29/9/2016 15:19

The monthly oil stock challenge is on! A test for for oil stock picking ability. Deadline for entries is this Sunday 2 October 2016.

[emptyend] 29/9/2016 15:16

It is interesting to note that the volume of cash changing hands on TLW today is more than 100x the volume changing hands on SIA. Quite rare to have the disparity that wide - doubtless because the more liquid E&Ps (and majors) are first stop for funds looking to put money in to the sector.But consider the implications of the link I put up earlier.....https://www.vietnambreakingnews.com/2016/09/pvn-to-step-up-oil-extraction/

[emptyend] 29/9/2016 15:05

:-) ......by December you'll be looking forward to this year's flu pandemic....... (courtesy Express) ;-)

[fangorn2] 29/9/2016 14:28

@ EE,

Hahaha indeed. I think it was. I'll beleive it when i can't get out of my driveway this December.

[emptyend] 29/9/2016 14:21

...cold snowy winter ahead.....typical Express story ;-)Meanwhile this is of some interest:https://www.vietnambreakingnews.com/2016/09/pvn-to-step-up-oil-extraction/

[fangorn2] 29/9/2016 13:53

@EE,

Express? Re which comment? Russian one from "Advanced Energy Strategist"
Or the imminent snowed in!!

[bend1pa] 29/9/2016 13:40

Good article here which neatly sums up the shambles of the latest OPEC agreement.

[emptyend] 29/9/2016 13:32

Tsk....Fangorn, you've been reading the Express?

[fangorn2] 29/9/2016 13:20

@Nigel

Viz Russians...interesting little snippet.

"Last week, I rambled on about whether the OPEC freeze in output was going to happen. Just yesterday, Russia said that it doesn’t really care if the freeze happens or not.

According to the Russian energy minister, Alexander Novak, reaching a deal to freeze output is “non-critical” for Russia. And why would it care?

[fangorn2] 29/9/2016 13:06

We can but wait..still,if it pans out as you hope, that'll go some way to offsetting the December FED Interest rate rise!!

Exciting times...on many fronts. Plenty of "hazards" await..including a very cold snowy winter apparently!

[nigelpm] 29/9/2016 12:49

Certainly possible Fan.

I wouldn't be surprised with a drift down in oil until the meeting and then an announcement with backing from non-OPEC producers as well - that would really fire the market up.

[fangorn2] 29/9/2016 12:23

I suspect we should wait and see whether these cuts actually materialise in November. Suspect they wont,and it's just bluster as it's always been recently.

No mention of Russians, awho are producing at Post soviet highs.

Goldman Sachs: OPEC production cut deal doesn’t change oil price forecasts through 2017

Goldman estimated the proposal would keep production on average at 480,000-980,000 barrels a day below the bank's forecasts through 2017.

[invisage] 29/9/2016 09:11

How about just a short oil nigel rather than a long soco ?

[nigelpm] 29/9/2016 09:06

Certainly truth in that but I think the net impact has been stronger for Shale (certainly than the Saudi's realised two years back).

My point is this has forced their hand over just letting them carry on with it and the market sort itself out.

Clearly, there's a whole multitude of factors but not many expected US shale to hold up this well.

As an aside, a LONG Soco SHORT Forward oil looks great value here. Oil won't jump beyond $60 but could very well fall back short term.

[emptyend] 29/9/2016 08:49

I think Peter is alluding to the point that shale is not the panacea it was once thought to be and that some shale basins are very much better/cheaper than others. The consequence will be that shale doesn't come on "in a flood" as the oil price rises - instead it will be more of a trickle. I suspect the impact will be that oil price rises will be slower than historically may have been the case.