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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Soco International Plc | LSE:SIA | London | Ordinary Share | GB00B572ZV91 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 61.80 | 61.90 | 62.40 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMSIA
RNS Number : 6766L
Soco International PLC
20 April 2018
20 April 2018
SOCO International plc
("SOCO" or the "Company")
Annual Report & Accounts and Notice of Meeting
The Annual Report & Accounts of the Company for the year ended 31 December 2017 and a Shareholder Circular, which includes Notice of the 2018 Annual General Meeting, are now available on the Company's website and can be accessed via www.socointernational.com.
The 2018 Annual General Meeting will be held at The Bulgari Hotel, 171 Knightsbridge, London SW7 1DW on 7 June 2018 at 10.00 a.m.
Paper copies of the above two documents are available on request from the Company Secretary at the Company's registered office at 48 Dover Street, London W1S 4FF, United Kingdom. Paper copies of the above two documents, together with a Form of Proxy, have been mailed to those shareholders having elected to receive paper copies.
In accordance with LR 9.6.1, copies of the above two documents, together with a Form of Proxy, have been submitted to the National Storage Mechanism and will shortly be available for inspection on the National Storage Mechanism's website, http://www.morningstar.co.uk/uk/NSM
This dissemination announcement is based upon the Company's announcement of Preliminary Results for the Year Ended 31 December 2017 made on 22 March 2018 with the addition of information required by DTR 6.3.5 set out below in the Appendix.
For further information, please contact:
SOCO International plc
Tony Hunter, Company Secretary
Tel: 020 7603 1515
Appendix
Following the release of the Company's Preliminary Results for the Year Ended 31 December 2017 made on 22 March 2018 additional information is set out below in accordance with DTR 6.3.5.
1) The following is extracted from page 55 of the Company's Annual Report and Accounts 2017 at www.socointernational.com.
Directors' Responsibility Statement
The Directors confirm that, to the best of each person's knowledge:
(a) the Financial Statements set out on pages 86 to 118, which have been prepared in accordance with applicable United Kingdom law and IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and loss of the Company and the Group taken as a whole;
(b) this Directors' Report along with the Strategic Report, including each of the management reports forming part of these reports, includes a fair review of the development and performance of the business and the position of the Company and the Group taken as a whole, together with a description of the principal risks and uncertainties that they face and how these are being managed and mitigated as set out in the Risk Management Report on pages 28 to 33; and
(c) the annual report and the Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for the shareholders to assess the Group's performance, business model and strategy.
By order of the Board
Jann Brown
Managing Director and Chief Financial Officer
21 March 2018
2) The following description of the principal risks and uncertainties is extracted from the Risk Management Report (pages 28 to 33) of the Annual Report and Accounts 2017 at www.socointernational.com
Principal Risks and Uncertainties
A summary of the key risks affecting SOCO and how these risks are mitigated to enable the Company to achieve its strategic objectives is as follows.
Key: PR Principal Risks
Hot Features
Premium
PR HEALTH, SAFETY, ENVIRONMENTAL AND SOCIAL RISKS MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
The Group operates in an industry sector with high risk SOCO aims to mitigate such risks by implementing the
operating conditions and HSES risks. SOCO HSES MS on all SOCO-operated projects.
These risks include major equipment and materials The SOCO HSES MS facilitates best practice
failures, which could potentially harm the international standards, which exceed national
workforce, the public and/or the environment. requirements in some countries. Further details of how
Additionally, it operates in regions where there SOCO addresses these risks can be found
is a greater risk of economic or social instability and in the CSR Report on pages 34 to 45.
where local attitudes to risk differ
compared with nations with more established or
developed economies. Accordingly, the Group
may be exposed to specific risks in relation to social
and environmental factors as well as
health and safety matters, including security.
--- -------------------------------------------------------- -------------------------------------------------------
PR COMMODITY PRICE RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
Crude oil and gas prices are impacted by a complex The Group does not currently maintain any fixed price,
supply and demand matrix including global long term marketing contracts. Production
and regional supply, potential supply growth from is sold on 'spot' or near term contracts, with prices
unconventional sources, the global economy, fixed at the time of a transfer of custody
refining capacity and initiatives to reduce carbon or on the basis of an average market price. The Board
intensity. The rate of development of emerging may give consideration in certain circumstances
economies, world population, geopolitical uncertainty, to the appropriateness of entering into fixed price,
geopolitical developments, producing long term marketing contracts. Although
nation alliances and technical advances, are all oil prices may fluctuate widely, it is the Group's
factors in this complex supply and demand policy not to hedge crude oil sales unless
curve. Additionally, impacts arise from availability hedging is required to mitigate financial risks
and cost of infrastructure, alternative associated with debt financing of its assets
energy sources, regulation, production levels, market or to meet its commitments. The budget and various
speculation regarding future supply sensitivity cases, applying expert analysis
and demand, weather conditions and natural or other and price forecasting, are regularly tested for
disasters, and many other significant downside scenarios and provide comfort that
and evolving underlying factors. Exposure to SOCO are able to meet its commitments. No price
fluctuations in crude oil prices may lead to hedging mechanisms were in place during the
reduced cash flows, impairment of assets or assets year. During periods when the Group sees an
stranded due to locked in losses in longer opportunity to lock in attractive oil prices,
term contracts. The sustained lower oil price has it may engage in limited price hedging.
significantly impacted the industry as a
whole.
--- -------------------------------------------------------- -------------------------------------------------------
PR EMPOWERMENT RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
The Group's international portfolio comprises oil and As operator in a project, SOCO can directly influence
gas ventures in widespread, often remote operations and decision making. Where
locations with government and industry partners. The SOCO is a co-venturer it seeks to maximise its
conduct of operations requires the delegation influence through active participation with
of a degree of decision making to partners, contractors management, including direct secondments and
and locally based personnel. application of internal control best practice
under a procedural framework.
--- -------------------------------------------------------- -------------------------------------------------------
PR HUMAN RESOURCE RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
The retention and recruitment of high quality personnel The Remuneration Committee retains independent
is essential for SOCO to deliver on advisors to test the competitiveness of compensation
its strategy. The loss of key experience and expertise packages for key employees. SOCO operates bonus and
could result in serious gaps within long term incentive plans as well as the
the Company knowledge base. share option plans to provide incentive. Succession
planning is in place for all key areas
of the business. Further details of SOCO's
remuneration policies and practices can be found
in the Directors' Remuneration Report on pages 70 to
85.
--- -------------------------------------------------------- -------------------------------------------------------
PR LIQUIDITY AND CREDIT RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
The Group has continued to carry sizable cash balances To mitigate these risks and protect the Group's
throughout the year and has a non-current financial position, cash balances are generally
receivable in respect of two accumulating abandonment invested in short term, non-equity instruments or
funds in Vietnam, which limits its exposure liquidity funds, not generally exceeding
to liquidity risk but increases its exposure to credit three months forward. Investments are generally
risk. confined to money market or fixed term deposits
in major financial institutions. The Group seeks to
minimise credit risk by maintaining balances
with creditworthy third parties including major
multinational oil companies subject to contractual
terms in respect of trade receivables. The credit risk
on liquid funds is limited as the Company
only selects institutions with high credit ratings
assigned by international credit rating
agencies and endeavours to spread cash balances and
liquid investments to multiple institutions.
The level of deposits held by different institutions
is regularly reviewed.
--- -------------------------------------------------------- -------------------------------------------------------
PR CAPITAL RISK MANAGEMENT MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
The Group manages its capital to ensure that entities The Group seeks to maintain a sizable free cash
in the Group will be able to continue balance to fund its operations and shareholder
as going concerns while maximising the return to distribution policy. There is daily reporting on cash
stakeholders through the optimisation of balances and forecasts are regularly
debt and equity balances. prepared to monitor cash requirements. Sensitivity
cases are monitored on an ongoing basis
as funds are spent and forecasts are updated to
determine the amount and timing of any additional
financing required. The Group maintains relationships
and active dialogue with various financial
institutions and may consider raising debt or equity
finance at the appropriate time.
PR RESERVES RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
Portfolio management through exploration, appraisal or The Group continues to evaluate projects in existing
acquisition may fail to yield reserves and potentially new areas of interest.
in commercial quantities sufficient to replace The Group is focused on pursuing business development
production. Commercial reserves must be technically and growth opportunities deemed appropriate
and economically recoverable and are subject to risks and commercial when applying the most current
associated with technical success, future information on underlying trends and factors
commodity price and future capital and operating cost under various sensitivities.
profiles. Changes in these factors may
result in reserves being stranded due to premature
write downs, reduced valuations or conversion
to liabilities.
--- -------------------------------------------------------- -------------------------------------------------------
As discussed in Note 4(b) to the Financial Statements, Reserve estimates are reviewed regularly by
the Group uses standard recognised independent consultants. Future development costs
evaluation techniques to estimate its proven and are estimated taking into account the level of
probable oil and gas reserves. Such techniques development required to produce the reserves
have inherent uncertainties in their application. SOCO by reference to operators, where applicable, and
has projects with booked reserves in internal and third-party engineers.
production, development or non-conventional fracture
basement reservoirs. Upward or downward
revisions to reserve estimates will be made when new
and relevant information becomes available.
Such revisions may impact the Group's financial
position and results, in particular, in relation
to DD&A costs and impairment provisions.
--- -------------------------------------------------------- -------------------------------------------------------
PR STAKEHOLDER AND REPUTATIONAL RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
The Group operates in locations, and in an industry Where SOCO is an operator, it implements its health,
sector, where social and environmental safety, environmental and social responsibility
matters may be highly sensitive both on the ground and policies to ensure that Company activities conform to
as perceived globally. This can potentially international best practice. For joint
lead to a reputational risk which may influence various or non-operated projects, SOCO seeks to maximise its
Group stakeholders. The actions of influence to promote best practice. SOCO
international bodies may harm the objectives of the garners the views of its stakeholders through direct
Company and its regional partners. and indirect engagement and by referring
to external sources. Further details of how SOCO
addresses these risks can be found in the
CSR Report on pages 34 to 45.
--- -------------------------------------------------------- -------------------------------------------------------
PR OPERATIONAL RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
There are inherent risks in conducting exploration, SOCO seeks to mitigate its operational risks through
drilling, and construction operations the application of international best
in the upstream industry. The level of risk is practice, including both in the design and build of
potentially impacted by harsh or unexpectedly its infrastructure and in its operating
extreme geological, geographical or weather conditions procedures. Further details of how SOCO addresses
which may result in an associated impact these risks can be found in the CSR Report
on resource availability and increased costs. on pages 34 to 45.
Mitigation may also be achieved by transferring risk,
for example, by entering into partnerships
or farm-outs and by maintaining, at a minimum,
standard industry best practice insurance.
The Board of Directors does not believe that it is
practical or prudent to obtain third-party
insurance to cover all adverse circumstances it may
encounter as a result of its oil and gas
activities. However, the Board believes that SOCO's
comprehensive property, control of well,
casualty, liability and other policy cover conforms to
industry best practice. As such, it
provides substantial protection against typical
industry operational risks. The Board believes
it has struck an appropriate balance between exposure
and coverage.
--- -------------------------------------------------------- -------------------------------------------------------
PR STRATEGIC RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
There is a need to ensure that the Company is well The Company reviews a three year plan as part of its
funded to deliver on its capital commitments planning cycle and Going Concern and
and business development opportunities whilst achieving Viability Statement testing. The variation between
its core strategies of Recognising actual results compared with budget and
Opportunity, Capturing Potential and Realising Value in forecasts are reviewed regularly by the Board. The
order to deliver long term viability Company also reviews regularly the remaining
for the business. life of field economics given changes in economic
conditions. Potential business development
opportunities are assessed utilising the most current
analysis for forecasting and sensitivities.
The Board discusses strategy at each meeting of the
Directors which includes an appropriate
allocation between business development activities and
shareholder returns.
--- -------------------------------------------------------- -------------------------------------------------------
CLIMATE CHANGE RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
Global transition to a lower carbon intensity economy This report sets out the manner in which the Group
in response to climate change could seeks to mitigate each of its principal
result in reduced demand and increased operating cost, risks, including those that may be impacted by a
capital cost, regulation and taxation. global transition to a lower carbon intensity
Accordingly, it is a factor that impacts many of the economy. In applying the mitigation measures for each
Group's principal risks set out herein, of the Group's principal risks, SOCO
including those associated with commodity price, seeks to monitor and apply the most current and
reserves, operations, political, stakeholder evolving information on trends and factors
and reputational. that may impact on its current projects and as may be
applicable to proposed future projects
and the strategy for developing the business. Further
details on climate change can also be
found in the CSR Report on pages 34 to 45.
--- -------------------------------------------------------- -------------------------------------------------------
POLITICAL AND REGIONAL RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
Many of the Group's projects are in developing SOCO seeks to minimise such risks by using both
countries or countries with emerging free market international and in- country professional
systems where the regulatory environment may not be as advisors and by engaging directly with the relevant
mature as in more developed countries. authorities on a regular basis. The Group
There may be a high level of risk in relation to assesses the risks of operating in specific areas
compliance with and interpretation of emerging before beginning operations in order to
hydrocarbon law, taxation and other regulations. Some determine these risks as commercially acceptable.
of the Group's interests are in regions Project reviews are conducted on a risked
identified as potentially more susceptible to business basis considering the most relevant project-based
interruptions due to the consequences factors under various sensitivities. SOCO
of possible unrest. Additionally, the energy sector is does not currently carry political risk insurance or
exposed to a wide range of international associated business interruption insurance
political developments which could impact the operating coverage to mitigate such risks. However, it
and regulatory environment resulting periodically assesses the cost and benefit of
in increased operating costs, compliance and taxation. both and future circumstances may lead the Group to
acquire such insurance cover.
--- -------------------------------------------------------- -------------------------------------------------------
BUSINESS CONDUCT AND BRIBERY RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
SOCO operates both in an industry sector and in certain The Group seeks to mitigate these risks by ensuring
countries where the promotion of transparent that it has adequate procedures (including
procurement and investment policies is perceived as vendor due diligence) in place to eliminate bribery
having a low priority and where customary and that all employees, agents and other
practice may fall short of the standards expected by associated persons are made fully aware of the Group's
the UK Bribery Act and other applicable policies and procedures with regard
anti- bribery or anti-corruption law or regulation. to ethical behaviour, business conduct and
transparency. The annual training and compliance
certifications by all associated persons, refreshes
and reinforces SOCO's Code of Business
Conduct and Ethics.
Running in parallel with the Group's general risk
management process, the Audit & Risk Committee
has established a detailed bribery risk assessment and
mitigation reporting procedure. Bribery
risks are monitored throughout the year along with
implementation of procedures to mitigate
any new risks identified. The Company has arrangements
for 'whistleblowing', whereby staff
may, in confidence, raise concerns regarding
improprieties, which would be addressed with
appropriate follow-up action. To facilitate such
reporting the Company maintains an Ethics
Hotline Service using an independent, confidential
telephone service that can be used by staff
members and other stakeholders to report a suspected
breach of SOCO's Code of Business Conduct
and Ethics. Further details on the Company's
anti-bribery and corruption programme can be
found in the CSR Report on pages 34 to 45.
--- -------------------------------------------------------- -------------------------------------------------------
FOREIGN CURRENCY RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
Generally, it is the Company's policy to conduct and The impact of a 10% movement in foreign exchange rates
manage its business in US dollars. Cash on the Group's foreign currency denominated
balances in Group subsidiaries are primarily held in US net assets as at 31 December 2017 would not have been
dollars, but smaller amounts may be material (2016: not material) and would
held in GB pounds or local currencies to meet immediate not have been material with respect to the Group's
operating or administrative expenses, loss in 2017 (2016: not material).
or to comply with local currency regulations. From time
to time the Company may take short
term hedging positions to protect the value of any cash
balances it holds in non-US dollar
currencies.
--- -------------------------------------------------------- -------------------------------------------------------
CYBER RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
Cyber security breaches could result in the loss of key SOCO continues to focus its efforts on prevention and
confidential data, disrupt critical detection of these threats and employs
business systems or cause reputational and/ or a programme of effective continuous monitoring.
financial harm.
--- -------------------------------------------------------- -------------------------------------------------------
CONTRACTUAL RISK MITIGATION
--- -------------------------------------------------------- -------------------------------------------------------
The Group enters into various contractual arrangements The Group manages its commitments via the annual
in the ordinary course of its business. budget and regular forecasts, reporting against
Such contracts may rely on provisional information actuals on a monthly basis. Board delegated authority
which is subject to further negotiation minimises the exposure to unauthorised
at a later date. This may give rise to uncertainty of commitments.
such information.
--- -------------------------------------------------------- -------------------------------------------------------
3) The following is extracted from Note 34 to the Financial Statements (page 118) of the Annual Report and Accounts 2017 at www.socointernational.com
RELATED PARTY TRANSACTIONS
During the year, the Company recorded a net cost of $1.0m (2016: net credit of $1.1m) in respect of services rendered between Group companies. The Company had a short-term payable of $1.4m to a Group company outstanding as at 31 December 2016. Transactions between the Company and its subsidiaries have been eliminated on consolidation.
Remuneration of key management personnel
The remuneration of the Directors of the Company, who are considered to be its key management personnel, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures. Further information about the remuneration of individual Directors is provided in the audited part of the Directors' Remuneration Report on pages 70 to 85.
2017 2016
$ million $ million
============================= ========== =============
Short term employee benefits 6.1 4.7
============================= ========== =============
Post-employment benefits 0.3 0.3
============================= ========== =============
Share-based payments 1.7 2.9
============================= ========== =============
8.1 7.9
============================= ========== =============
Directors' transactions
Pursuant to a lease dated 20 April 1997, Comfort Storyville (a company wholly owned by Mr Ed Story) has leased to the Group, office and storage space in Comfort, Texas, USA. The lease, which was negotiated on an arm's length basis, has a fixed monthly rent of $1,000.
Under the terms of an acquisition approved by shareholders in 1999, the Company and its Investor Group, including Quantic group of companies, of which Mr Rui de Sousa is a 50% beneficial interest holder, jointly participated in certain regions in which the Investor Group utilised its long established industry and government relationships to negotiate and secure commercial rights in oil and gas projects. In the 2004 Annual Report and Accounts the form of participation to be utilised was set out to be through equity shareholdings in which the Investor Group holds a non-controlling interest in special purpose entities created to hold such projects. The shareholding terms were modelled after the SOCO Vietnam arrangement which was negotiated with third parties. The non-controlling holdings by Quantic group of companies in the subsidiary undertakings, which principally affected the profits or net assets of the Group, are shown in Note 17. The Group has entered into a consulting agreement, which is terminable by either party on 30 days' written notice, wherein Quantic Limited, which is part of the Quantic group companies, is entitled to a consulting fee in the amount of $50,000 per month in respect of such services as are required to review, assess and progress the realisation of oil and gas exploration and production opportunities in certain areas.
[END]
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACSLLFSSSIIIFIT
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April 20, 2018 10:47 ET (14:47 GMT)
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