Soco Share Discussion Threads

[ed 123] 13/11/2017 09:34

New Company Secretary.

???

Who would that be?

[emptyend] 13/11/2017 07:56

Board changes as flagged. New Company Secretary.........but what will the next news be?

[emptyend] 07/11/2017 12:43

That is an excellent and well-informed summary FH (in fact it reflects my own view precisely in nearly every respect ;-))I would observe, though, that the energy spark is intended to be reinjected by the new team, who are poised to both start doing deals and to re-market the attractions of the company.....hence my comments above re expectations. Other than the deals, the reserves rebooking and the length of the licences are key. Prior to the 2015 reclassification etc, the shares were at 250p - at a point when the oil price was roughly at today's level. IMO proper resolution of these outstanding matters should see the shares back over £2 within the next 6 months.

[thegreatgeraldo] 07/11/2017 10:55

fh,

Are you waiting for the men in black? Wouldn't hold your breath, although I feel a song coming on.....

[flyinghorse1] 07/11/2017 10:47

I would say the men in black dont know this company now. SOCO seem to have distanced themselves from all PR and rely on just a few required announcements.

Its like they have become invisible. I don't think its a bad company (No Debt, cash, likely re booking of reserves, potential deal , bottleneck, sells at a premium to Brent) or has bad assets but spark is missing. I dont think there is enough here for new retail investors ATM, (except those of us who have been here a long time) or institutional investors with the fireworks going on in other companies.

Perhaps its just the phasing thats wrong with SOCO right now and it could become a platform for growth with money getting out of the more leveraged positions as nerves on oil price sustainability jitter.

Being objective the current negatives for me are:
Lack of company energy
TGT licence extension
TGT reserves rebooking through a work program and debottle necking-they have not gone they are still 2C & 3C.

FH

[emptyend] 07/11/2017 10:45

Re #20069, in fact the share price is precisely where it was at the 2016 lows (120p)......a price that was shared with TLW for 2-3 days.Since then we've had a few pence of dividends - but you're right to note that OPHR and SIA have underperformed the rest dramatically. I am hopeful that a combination of events will enable a rapid catch-up....but that won't happen seriously until management get out there with a new story to tell the institutions. In the days/weeks that remain before that process can start (bearing in mind that the likely trigger will be a deal that has been flagged as "by year end") there is an opportunity for retail investors to get back in (unless, like me, they've held throughout the last n years)............... I know I've said similar things previously, but this time I believe they really are finally getting their ducks lined up to do things.

[jotoha2] 07/11/2017 10:31

Ditto there npm , am expecting £1 once we get FID at ophr, as for sia , will give them time until the next update , clearly the men in black do not like this company , very strange.

[nigelpm] 07/11/2017 10:24

The only coincidence with SIA and OPHR is that I hold both in reasonable measure - that's probably why both have been hammered!

[jotoha2] 07/11/2017 10:17

Small holders selling again, can't blame then really when all around are rising in line with price of oil.

[jotoha2] 07/11/2017 09:59

A far better comparison is to look at oils low since feb 2016 , tlw , pmo , enq bp shell and many others have risen between 100-300% whereas sia and one other ophr are actually below that feb 2016 level , now either the insiders know both of these companies are for the knackers yard , or we are due a massive rerating once positive news comes through.

[emptyend] 07/11/2017 09:29

Here's a comparison for you:Since the start of July, the SOCO share price has basically done nothing at all (apart from a short blip down a couple of weeks back).In stark contrast, since the start of July the price of Brent has basically gone up in a straight line from under $46 to over $64.Now it could be argued that institutions are building liquidity ahead of the Aramco float......but I doubt that would have much of an impact on SOCO.It seems to me that a reappraisal of prospects is warranted, and I hope that the forthcoming update (mid Nov?) will provide the stimulus.

[emptyend] 06/11/2017 10:53

I see the recovery factor as more relevant in the P50/P10 debate. Higher recovery factors are doubtless reflected in the P10 case. But the 2P/2C difference is basically a matter of the work programme and the length of the licence. The licence length is known to be a binding constraint at CNV, but it isn't a factor (yet anyway) at TGT.........so it should follow that a full work programme to develop the TGT field would result in a movement from 2C to 2P. The 2015 revision assumed that investment would simply stop (as there was no agreed plan in place, unlike the current situation).The question of "how much?" would depend on production data and experience since the start of 2015 - they must surely now have a much better understanding of the reservoir behaviour. The other factor here is the possibility of a licence extension.....in respect of which I wouldn't count any chickens, but it clearly will become a factor in investment decisions as time goes by, so I'd guess it will become a discussion item for the partners.

[flyinghorse1] 06/11/2017 10:08

EE,
My thinking around the reserves reclassification split was more to do with internal vs external views on the recovery factor expected. I agree the STOIIP was not the issue.
I suspect that the 3C component of the split could represent the higher end of recovery ( higher recovery factor) but am not privy to the detail.
There are other reasons such as licence period and liklihood of extension that could shift reserves from 2P to 2C but again i have not seen the detail. I need to go back through the A/R and see if the detail of the reclassification and subsequent split to 2C and 3C is clear.
SPE PRMS does allow for taking one licence extension ( and holding as 2P though it can be 2C ) where there is evidence supporting its liklihood, but either SOCO and or GCA did not push it.
So to sum up i feel the current TGT reserves reflect the current licence period and the reclassification split 3C component the recovery factor expectation differences.
We have to understand the reclassification to be able to determine what might be reasonably moved back to Proven from Contingent, and as you say its a work program that will do this.
FH

[flyinghorse1] 06/11/2017 09:44

Stepone68,
Yes you are correct my mistake in text above.( its correct in my spreadsheet so my EV of £1.28/share is ok )
My main point was about the previous reserves revision and what might come back. I wanted to start looking at the likely triggers for share price rise going forward, feeling that we are at bottom.
If we had kept all the returned cash the EV would be close to zero which does not feel right either.
I'll change it above so as to not confuse people.

FH

[stepone68] 06/11/2017 09:01

Trying to understand the above - shouldn't EV be market cap PLUS debt MINUS cash?

[emptyend] 05/11/2017 22:52

...sooo....looking back:STOIIP unchanged at TGT in 2015 (and presumably still unchanged) with most of the reclassified 2C potentially now coming back into 2P, given work prog. 1/2/3 P & 1/2/3 C will likely now be different anyway with more production experience. Different picture at CNV - those reserves won't come back unless the licence is extended or CNV-7 drilled.......so we need to focus on TGT. Obviously the water-handling and FPSO arrangements are important here. Settle those and drill new wells and I see no reason why a chunk of reserves shouldn't come back.

[emptyend] 05/11/2017 22:29

Good discussion points there, FH.My understanding from the time IIRC was that the STOIP estimate wasn't a factor - indeed I think it went up slightly. But you are right that the rest was split - and I've long felt that a proper capex prog should enable a portion to be written back.I'll look back on some details....

[flyinghorse1] 05/11/2017 20:41

I decided to look at what magnitude of Reserves we might expect to recoup for Vietnam(2P -proven & probable). The ERCE model ought to be well tuned by now and forward capital program's and oil price decks in play known.

I never really delved/drilled into the major YE 2013-YE 2014 write down/reclassification where Vietnam went from 117.3mmbls YE13 to 40.8mmbbls YE2014-a 76.5mmbbls drop (37.3mmbbls YE15 and 33.3 YE16)

It seems on examination the large YE13 numbers were based on a 3rd party estimate of STOIIP and a management estimate of RF--Some high numbers were thrown about that were subsequently difficult to support with the consequent 2P audit & ERCE model and capital curtailment.

The 76.5mm drop was further split in to a 2C reclassification of 38.9mmbbls(ie due to capital curtailment --waiting on development/drilling capital) and 40.7mm went to 3C--effectively lost (P10 10% chance of recovery)

So on balance, and bearing in mind the ERCE model may throw up good or bad surprises and if the STOIIP view has changed , we could see 38.9mm bbls come back on the books.

I started this because I was trying to figure out what might get us kick started again as a company-it has to be reserves back on the books(audited) and cash generation , as I view the current price as a new base/start.
I was calculating our Ev based share price (got about £1.28) and to look at the reserves on a Ev basis which showed the 2C needs to go back into 2P to generate some serious uplift.
The main problem with returning cash is Ev is Market cap plus debt minus cash so with little debt, and returning cash all the time our EV stays suppressed.

My biggest mistake was reinvesting all my dividends back into SOCO and not understanding the impact on EV. I dont do that now but some of the erlier chunky ones I did.

I would rather have a discussion on what will trigger a relaunch (which I think will happen)-its like we are a new company now with oil rising, the impact of years of no investment biting and just need a clear strategy for growth-hopefully the Water handling, new TGT capital will provide the first step.
FH

[emptyend] 05/11/2017 20:27

Bad weather in Nha Trang with the worse typhoon in 16 years turning up in time for the APEC summit this week............good job no work started yet on 125/6.

[jotoha2] 05/11/2017 12:33

Wrong or right makes no difference , they have taken longer then their last statement , anyway nice little article about Vietnam in the DM today , Vina capital fund has shown returns of 22% over 1 year , 84% over 3 years and 192% over 5 years ,which is the opposite to soco's achievement , looks like the fund manager needs to spend a couple of hours per week guiding our BOD on how to achieve in Vietnam.

[emptyend] 05/11/2017 10:38

Wrong. It is only a "must-release" if there is a material unexpected change from previous guidance. And that can only be concluded after the full system is back up and running. From memory they've guided to 8,000-9,000 bopd for 2017 - so if 2017 production were no expected to fall outside that published range when the system is back in stable state (post-testing), than an RNS would be needed. But AFAIAA they are still "fiddling with it" - from which one can draw no conclusions at all, positive or negative.The much more interesting bit is what the guidance will be for 2018 .......and that will only be settled when the capex programme has been agreed between the partners (following their December Opcom, IIRC).

[jotoha2] 05/11/2017 09:44

They must issue an rns once the water handling changes have been completed and working , or there are problems ,as it is a material issue , it's already overdue , why?

[emptyend] 04/11/2017 23:15

I'm not expecting an RNS Monday. Its obviously not impossible, but no reason I know of for one to be issued (probably) 10 days before a board meeting.After the board meeting, I'm expecting board changes and an operational update (as for last two years)

[nigelpm] 04/11/2017 22:37

Can't see it falling if goings on in Saudi spike the oil price as I fully expect.