Soco Share Discussion Threads

[emptyend] 21/12/2016 10:55

...rearrange the words at the end of para 1 into something sensible. Fat finger.

[adam] 21/12/2016 10:54

As long as the jurisdiction isn't China or Mongolia.

[emptyend] 21/12/2016 10:52

FH - I agree with very much of what you say and indeed flagged a number of those issues to the company earlier this year. As you know, they are intending to put in place a new set of remuneration policies this year and shareholders will get to vote on them. My expectation is that the LTIP may be wound up, because the payout on it is a bit of a lottery and it doesn't well for anyone deliver in the current environment.However, we are where we are at present and, with external oversight of the LTIP and a board/RemCom that contains representatives of substantial shareholders as well as fully independent directors, I think there is plenty of room to hope awards are sensible. For example, last year they reduced the 90% measured achievement under the annual bonus scheme to 75% and paid it in deferred shares rather than cash..........though I think more radical adjustments (and simplifications) would be useful with the revised RemCom policies. It will be interesting to see what they come up with.

[flyinghorse1] 21/12/2016 10:30

EE,
Regarding renumeration,the current schemes in my opinion no longer motivate management to delver outstanding performance.It seems to reward average performance.The LTIP cycle is designed to deliver long term strategy(ie post award hold period),but is now shorter term beneficial to recipients than to the current strategy and the likely restoration of stable high oil prices which are very long(imho).

The common held belief is that SOCO share price is where its at due to oil price.

Say the oil price was back at a steady $100 would we really be back at £3-£4/share,or what ever the returns adjusted price is. Dont forget many invested the returns back in at a high price relative to today,rather than keeping cash.(that would have been a good idea).
Or would cracks in the management current delivery/ strategy appear if we did not rise back there. The part payment of money from mongolia and the 2 new wells has seen a rise of 10p- a long way and a lot of news to get to +£3
I am not saying management are bad but unmotivaated and greedy.
I would like to see some energy about the company,move into a new product(gas),deliver sucessfully outside of Vietnam.
Target a G&A reduction of 50% whilst still delivering. Introduce new blood and energy- our recent hopeful left.

I really should not knock a company i hold a lot of shares in but a shake up is needed and overdue in my opinion esspecially on a rising tide.
FH

[kenobi] 21/12/2016 09:59

I have a vague recollection that the Juristiction is Canadian,
but that's from memory, so I could be wrong,

K

[emptyend] 20/12/2016 11:55

Think it was Swiss - but you'd probably need to check back on TMF.

[redartbmud] 20/12/2016 10:14

fh

Bp. have some experience of that in the Gulf of Mexico.
Lightening will not strike twice? Looks like it is sorted now.

[adam] 20/12/2016 09:47

What is the jurisdiction for the contracts?

[flyinghorse1] 20/12/2016 09:38

The operational comment on the 2 wells is good,so we should have these boosting all of 2017 production as they will be on all year having an annual average effect.

The re run casing comment a bit of a concern,as you normaly run casing once and this can be a tricky operation if its not been done correctly(hole collapse/ loose a zone etc)

[nigelpm] 20/12/2016 08:59

Absolutely - that's quite possible. I was slightly concerned before today's RNS - for me that puts it right back in the unconcerned corner.

[emptyend] 20/12/2016 08:46

......ps....the other factor is that there may well be a number of invoices, reflecting the fact that the payment was based on production that is clearly spread out. It would not be untypical for the oldest to be paid first.

[emptyend] 20/12/2016 08:29

I would be pretty sure that the part-payment by the Chinese is largely down to lack of cash and an attempt to manage their own priorities. Its the same across the whole industry.I've very little doubt that they will cough up in time - but it is basically a case of continuing to press for payment. No doubt if it went to court that SOCO could obtain a judgement (part payment and evidence that the debt is acknowledged makes that outcome inevitable), but it is still a matter of enforcement. The fact that Daqing have a large and internationally-active parent company is likely to prove decisive in the end, IMO.

[nigelpm] 20/12/2016 07:55

Intent is critical in debt recovery - the fact they've sent something no matter how much is important.

[jotoha2] 20/12/2016 07:52

Litigation is not cheap !

[redartbmud] 20/12/2016 07:51

Chinese not letting go easily. If they resort to the courts it could take years and millions in costs.

[lauders] 20/12/2016 07:19

Well at least we have some news! 10 million is better than none but seems like legal action is necessary.

Good the wells have not been plugged and abandoned either, so potential for some more news soon?

[emptyend] 19/12/2016 21:09

Somewhat pejorative way of looking at it, fh. The LTIP is administered by 3rd party (Deloittes) and it is a matter of simple calculation how management performed against the disclosed peer group in terms of total return. There are 24 companies listed on p56 of the AR. Certainly some of the more leveraged companies will have outperformed, but I wouldn't rule out a better-than-median performance.As for the annual bonus, I'd like to think that the RemCom set some clear and tight objectives, including eg the FDP execution. It will certainly be interesting to see how they compare with the 90% achieved (75% awarded) a year ago.

[flyinghorse1] 19/12/2016 19:40

Will be interesting to see what managements view is of how they performed in 2016 and what they award themselves from the trophy cupboard.

If we get no further positive announcements by year end it cant be much.

This of course means 2017 really ought to be a much better year for delivery and share price which will be good for all us longer term holders.

[emptyend] 19/12/2016 10:42

....it is also worth noting that the early November announcement suggested two more infill wells may be drilled on H5, after the first two are completed.Not sure when those might be confirmed, but in or before early January seems reasonable.With the FDP (still) pending and the 125/6 PSA imminent, there must be a chance of material (and long-awaited) news re VN emerging over the next few weeks.

[emptyend] 19/12/2016 09:53

They have never hedged. They haven't been forced to by having debt covenants (unlike most others) and so should be fully exposed to a rise in oil prices (just as they were fully exposed to the PLUMMET).However, they could hedge if they wished - I just don't expect it, unless they suddenly splurge on buying another asset for cash (pretty unlikely, IMO).

[flyinghorse1] 19/12/2016 09:47

SOCO also did not hedge as far as I am aware,and used a very conservative price deck for reserves valuation,further compounding the move from proven to contingent.
Knowing our luck(read board decision making) we will likely hedge into a rising oil price.
FH

[emptyend] 19/12/2016 09:35

With the New Year approaching, it is worth remembering the context of how the share price got to the current level. Essentially it was trading at 250p until the March 2015 results, which contained a major reserves reclassification and created an immediate PLUMMET (hat tip, Lauders).This was the headline passage:"Against a background of lower oil prices and resultant uncertainty around the scope and timing of future development, a prudent approach to reserve booking has reclassified a portion of reserves into Contingent Resources"The main factor here was the total lack of formal drilling plans due to the delays in the FDP. Oil prices were around current levels, but at risk of going down.We are potentially in the process of reversing that. Drilling is going on again and forward plans may well be formalised into the FDP shortly (typically PV & JOC budgets are set in Jan/Feb). And perhaps oil prices are also on the way up in 2017.The OOIP numbers on TGT weren't lowered. The oil is still there. If there are now to be solid plans to extract it, why wouldn't contingent resources be reclassified as Reserves? I can see 200p+ being a reasonable target by the end of Q1.

[lauders] 19/12/2016 00:56

Will do my best EE! Difficult to use anything like "WHOOSH" (especially upper-case) when it comes to SIA, but plummet (note not upper-case again!) is much more comfortable for some reason! If I can ever use words like INCREDIBLE, AMAZING, STUPENDOUS, all preceding words like RISE, ROCKET, UPWARDS TRAJECTORY etc... all the better. Where will SIA be this time next year? I hope nearer 200p at the very minimum. Will there be any news that could re-rate us back towards 400p? Any takeover/bid would not get us anywhere near the latter if it occurred sooner, but who knows later in the year if things improve?

[emptyend] 18/12/2016 16:46

Launders......perhaps you could manage to include "WHOOSH!" next time.......or "plummet", if more appropriate? We must maintain appropriate standards for The Sun's sub-editors....... ;-)

[emptyend] 18/12/2016 09:39

Interesting observation on South China Sea politics:http://blogs.cfr.org/asia/2016/12/16/tillerson-and-the-south-china-sea-cashless-in-india-and-more/.......no obvious implications, AFAICT, though.