Soco Share Discussion Threads

[ntv] 28/9/2017 11:24

poor share price performance considering the price movement in brent

[stupidboy] 28/9/2017 09:36

Some background, from April 2017, on the FFDP and reserves reclassification:

The delivery and approval of an updated FFDP for the TGT Field has been a long hard battle for the company to progress through its partners and the Vietnamese authorities. Whilst we are pleased to have achieved that milestone and to have also been able to recommence drilling and development activities in the field, the overall macro and micro situation we are in now is significantly different to the one we had prior to 2104. At that time, with significantly higher oil prices, plans for the further development of the field, that would have been in the updated FFDP if it had been written at the time, would have included both more wells and significantly higher capital investment in alternative production infrastructure. The plans at the time were curtailed by the dramatic fall in oil prices that remain well below levels at the time. Alongside that, the intervening period has seen very limited activity in the field focussing almost completely on low cost, low reward work overs.

Thus, the current situation for the field is that the distribution of hydrocarbons within the field and the rate at which they can be recovered is not the same as it was three years ago, and the plans agreed by all parties are not the same either. As such, the approval of the updated FFDP does not mean it is a simple process of moving things from one side of the equation to the other. We are continuing to look at enhancing the performance of the field and in increasing recovery. This remains one of the company’s highest priorities.

[linton5] 27/9/2017 19:23

I'm in for some tmmw here el chapoos

[emptyend] 27/9/2017 15:58

If I recall correctly, kenobi, the FFDP identified 18 wells to be drilled. It is a multi-year programme but, as with every company, capex is usually planned/committed in Q4 for the succeeding year. Peter makes a good point about reserves reclassifications (from 2C back to 2P) but that is minimum 6 months off, I suspect, unless it is a material element of a corporate deal (as seems quite possible, IMO).I believe the current focus is on water-handling and the terms of the FPSO extension. 125/6 signing likely 4-6 weeks away.

[kenobi] 27/9/2017 15:06

Peter,

how far ahead are you thinking then ? what did the fdp tell us about development plans beyond this year ?

My understanding is that it agreed wells to be drilled this year did it even go into the next year ?

Re poo, it's not the case that the reserves were reclassified because they were uneconomic is it ? I thought it was just because there was no firm plan to develop them. I thought the idea of the fdp, was that there would be a firm plan. However the firm plan seems to be short term, so doesn't allow the reclassification of those reserves. I hope I'm wrong, but that's my understanding.

It will be interesting to see how things develop in terms of wells drilled, hopefully PV will want to drill more next year, and volumes produced.

K

[greyingsurfer] 27/9/2017 15:00

It hasn't allowed us to restore the reserves figures for example, and it only seems to be a short term plan.

Far too early to judge that surely? And a lot of the reclassification followed from the PoO. I wouldn't expect them to reclassify again until they have shown that production can be increased and have a new view on a stable(ish) PoO

Peter

[kenobi] 27/9/2017 14:22

ee,
you may be right although we've heard the partners aligned story many times before,
but my point is that as someone looking to buy into oil, the figures/ news stories are not yet in to show that soco has gone back to growth. The water handling is a good start, but more than anything that's fighting a rear gaurd action against the (no that aligned) partners views that we shouldn't do shut offs until there is no oil left at all. The soco view is that we should shut of when the water cut reaches massive proportions, the partners view is in no way aligned with that. Their view is why should we come back and get the least economic stuff when your licence has expired. It's a good step that water handling facility has been installed after years, (3, 4 5 ? ) or promises of increased liquid handling or converting to handle more liquid and less oil, have all come to nothing.

My point is, a growth story is much more appealing to investors, and when (soon hopefully) we can get back to that, then there will be more interest.

I'm unconvinced that the fpso has been the bottleneck for some time, lack of drilling has been a significant factor. All that waiting for the fdp, I'm not really sure it's been as dramatic as we hoped. It hasn't allowed us to restore the reserves figures for example, and it only seems to be a short term plan.

But like you I hope better times with growth are ahead,

K

[emptyend] 27/9/2017 13:47

kenobi.....that assessment is very much last year. Partners are now realigned .....that may not have showed through in much concrete info as yet - but it will.

[lauders] 27/9/2017 08:46

The Shares were purchased on the open market pursuant to a trading plan entered into on 9 February 2017.

Not exactly new news. We might receive some real news one of these days if we are patient enough. Been here a while as it is!

[richalert] 27/9/2017 08:44

Not the news we are looking for!

[jotoha2] 27/9/2017 08:24

Nice token share purchase by a couple of the boy's !!

[kenobi] 26/9/2017 21:21

SOCO is not in a good situation, for a few years production has been falling, it's a one trick pony in vietnam, on a couple of assets whose production is falling and the partners seem reluctant to spend money to stop it.

If they can turn that around, and do some deals that will give us production elsewhere I would expect a significant boost.

K

[emptyend] 26/9/2017 21:00

True re the debt gearing on TLW...but the direction is clear on both TLW shares and oil prices. SOCO odd one out for no obvious reason.

[jotoha2] 26/9/2017 17:06

Based on that , sia share price should be around 170p , but then of course it's not TLW !!

[emptyend] 26/9/2017 17:01

When oil was $30 TLW shares were 120p. Now 193p,

[nigelpm] 26/9/2017 16:11

Quite astonishing that POO has doubled from $30 to near $60 and Soco's share price has remained where it was!

[emptyend] 26/9/2017 13:03

The evidence we had for under-use is that at one point we wanted to test the FTSO capacity to 70,000bopd but that required Talisman to produce 15,000 and (despite stringing things out for about 6 months) they couldn't....hence we couldn't test it. I think they were at about 8,000 at that point.

[kenobi] 26/9/2017 12:26

Sure ee, in principle that makes sense, what we have no visibility of is what utilisation of the Talisman / Repsol capacity is. Although we suspect it's under used, what evidence do we have for this ?

Well lets see when they announce the new deal,

K

[emptyend] 26/9/2017 10:41

Kenobi, re Talisman/Repsol we've all had those thoughts over the years and I'd bet it still gets discussed. The fact seems to be though that a chunk of the FPSO capacity has always been "spare" as it is reserved for Talisman/Repsol. Presumably this is not costless to them - but, whatever the case, I would think there is an opportunity to revise the split when the extension occurs (in part because the capex contribution made by Talisman would have been predicated on no extension).Coupled with the water handling on H4 platform, the extension should offer some opportunity to recalibrate that constraint.

[ed 123] 26/9/2017 10:12

Re: post 19864. Ramping, Richalert? It's hardly going to work here, imo. When the oil price rises some holders use that strength to sell into. Remember Emptyend's occasional reminders about how illiquid these shares can be? So, the oil price has been rising but someone sold 13,100 shares yesterday just before the close at a penny below the quote, then another 38,500 were traded in the closing auction at 115p (the day's low). Someone offloaded 8,357 shares this morning below 115p. Several days ago, someone sold in the closing auction down at around 111p. There seem to be stale bulls here (no surprise, eh?) who use any strength (either from ramping or oil price) to sell into.

No one should be surprised. It's the same old pattern. There have been useful gains by some other oilers recently on the back of the rise in the price of oil. Soco holders will always be relative losers in these circumstances.


Emptyend,

(Sigh)

(Yawn)

If the water handling news is going to be so materially good, don't you think it would already have been indicated in a rising share price? Is the truth that, over the next few years, there will be an increasing water cut and rising operational cost per barrel?


I've been away for a while and, looking back, I see that GreyingSurfer has achieved a 'badge of honour' for me. Eight upticks for his snipe at me (post 19795). I don't recall having achieved such a high score before. Thank you.

For those who don't do the herding while losing thing .... if you look back to the hurricane posts and read on from there you'll see that Nigelpm (his post 19790) couldn't give a pertinent reply to my post 19788, so side-stepped it. Obviously, the occasional hurricane is not going to impact the long term price of oil. My post 19793 returned to the point I had made earlier and brought in part of Nigelpm's post. No, not misquoting at all, Greyingsurfer, highlighting the side-step of Nigelpm. Maybe it was too subtle for you?

So where is Soco now, at a time when the Brent front month is priced at $58/59/bbl? It's not boosted its own oil production, not done any asset buying, not progressed any exploration. Stagnant.

Yes, I've heard the defence that their Vietnam partners have slowed progress ….. but why has it taken so long/so much effort to achieve nothing at all in M&A?

Do holders remember those times when a large number of non-execs sat on the Board? Did it reach double figures? They were supposed to be bringing their valuable experience and contacts to give Soco a M&A boost. What happened? Now, holders are told that two employees are dedicating themselves to M&A. For a cash positive oiler over the 2015/6 period, Soco failed abysmally. There were bargains to be had while overborrowed oil companies fought to survive. Today? Brent front month $58/59/bbl. Too late, Soco, you'll have to pay fully for anything today.

If I were a Soco holder I wouldn't be looking forward to anything, save the retirements of Messrs Story and De Sousa.

[greyingsurfer] 26/9/2017 10:00

Brent certainly seems much perkier than many predicted. we do have to keep in mind that this is in no small part due to opec cuts, so this could all come apart.

It could, but the main role of the production cuts has been to reduce the surplus - which resulted from over production and development capacity when the PoO was nearly twice what it is now. In the absence of a maintained price move to $100+ again I doubt we would see such a surplus being built up. If the PoO remains in the sub $70-80 zone I think we'll see a lot of continuing caution about development plans, and it will be a lot easier for opec, and those prepared to work with them, to limit wild PoO gyrations - in both directions.

Peter

[kenobi] 26/9/2017 09:54

I've always thought it would make sense to unify tgt, for years we've been told that the talisman (formally), part was a pimple on the bottom of a rhino, well it's a blooming big pimple !!! I have suggested this at several agms, and the answer has always been that it's been investigated, but no agreement could be found. Which is a shame for all parties, as I suspect it would be better to optimise drilling and fpso capacity across the field as opposed to partitioned across both halves of the field.

Still I guess everything is possible, and perhaps thats something still being discussed.

K

[emptyend] 26/9/2017 09:36

I'd just observe that there is always an alternative. There is also the question of whether an FPSO extension would carry the same carve-out of capacity for the Repsol partners. My guess is it won't.Re Aramco float, I've always seen that as a key event for the macro situation. And so is the prospect of Iran supply disruption, with the Kurdistan referendum triggering likely closure of the Ceyhan pipeline by the Turks.

[kenobi] 26/9/2017 09:21

Brent certainly seems much perkier than many predicted. we do have to keep in mind that this is in no small part due to opec cuts, so this could all come apart. However also consider that the saudis have an oil company to sell, so it's not in their interests to let the market decide the price of oil. How long that will last after the float remains to be seen. In the meantime, lets hope soco do some deals and that we can get some growth, or at least reverse the decline of previous years.

I would like to see a strategy to increase production at cnv. Another bit of news we need to hear about is the situation with the fpso, doesn't the least have a break ? or an extension that needs to be triggered sometime this year (or next ?), it's pretty clear we have no alternative, so lets hope a good deal can be struck.

K