NO TA ON THIS THREAD PLEASE - (edit) and no pointless speculations either!
I've created this thread just to park stuff in that is only tangentially-related to SOCO's interests and doesn't relate to any of the specific assets.
NO TA ON THIS THREAD PLEASE - (edit) and no pointless speculations either!
I've created this thread just to park stuff in that is only tangentially-related to SOCO's interests and doesn't relate to any of the specific assets.
Morning EE
I've often thought that sector consolidation could have involved Soco putting its balance sheet strength to work by acquiring acreage rich cash poor E&P's however the recent Numis note highlighted how low returns on equity are elsewhere in the sector. I like the fact that Soco are very clear on the type of portfolio additions they'd agree and the hurdle levels they need to surpass.
Cheers
G'day rhomboid,
I've certainly had similar thoughts in the past and wouldn't wholly rule it out. However, there are very few situations IMO (if any - certainly amongst public companies) that would pass the hurdles.
cheers
To the person who voted this comment down:
I've certainly had similar thoughts in the past and wouldn't wholly rule it out. However, there are very few situations IMO (if any - certainly amongst public companies) that would pass the hurdles.
Since you clearly disagree with that statement strongly enough to vote it down, could you please tell us about the situations that you think would pass the hurdles? That's information I'm sure we would all appreciate you sharing.
A 320p deal for Heritage Oil (LON:HOIL) won't hurt:
http://www.investegate.co.uk/heritage-oil-plc--hoil-/rns/recommended-cash-offer-for-heritage-oil/201404300701428699F/
A 320p deal for Heritage Oil (LON:HOIL) won't hurt: -
Well yes and no.....
Per the RNS:
This represents a premium of:
25% to closing price. SOCO £4.20 so similar gives £5.25, No thanks
35% to 3 month VWA. SOCO still about £4.20 giving £5.67. Not much better
115% to 31 Dec price. SOCO £3.96 giving £8.51. NOW I'm interested
Just sayin' ;-)
OMH
I observed elsewhere that Heritage Oil (LON:HOIL) accompanied the deal news with some disappointing production news - and that IMO SOCO International (LON:SIA) is in a very much stronger position.
I also think that the H5 development plan (due summer) and associated TGT production outlook will be key - and wouldn't be too surprised if "other news" arrived at the same time.
IMO any deal would need to be at £7+ (possibly more, depending on the reserves and production outlook)
.....and today Salamander Energy (LON:SMDR) has announced it is up for sale:
http://www.investegate.co.uk/salamander-energyplc--smdr-/rns/commencement-of-formal-sale-process/201405010700060105G/
It may be a 'childs drawing' but it looks as though China means business on the 'nine dotted line'.
http://en.wikipedia.org/wiki/Nine-dotted_line
Latest incident is in Vietnam and reported in 'The Guardian'.
http://www.theguardian.com/world/2014/may/07/chinese-vietnamese-vessels-clash-south-china-sea
This has the potential to 'blow up' big-time all across the South China sea not just in Vietnam especially if (when) the Chinese economy makes a hard landing caused by a banking collapse and the Chinese Gov't look for a diversion for the attention of its people.
The dispute with Japan over the Senkaku Islands isn't going away either.
http://en.wikipedia.org/wiki/Senkaku_Islands
Looks like interesting times ahead in the South China sea.
Tom
.... though of course zero impact on SOCO International (LON:SIA) assets, which are in undisputed territory.
If there is doubt over ability to explore in other areas, undisputed assets should become more valuable if anything.
Politically the issue is tough even for China, because their border dispute is multilateral, and can't be resolved by force.
Hi EE,
I was aware that the Soco acreage is not in an area under dispute, unlike Premier's, but I don't think that instability in an area is good news for anyone. Any oil discovery these days tends to come with political risks attached and we should count ourselves fortunate that Vietnam is one of the oil company friendlier countries.
Tom
Frankly I think large chunks of the world counts as "unstable" at present. With Ukraine rumbling on and the Scots deciding on independence, you can't regard many Western Europe O&G assets as "stable" IMO.
With regard to Asia, all of the protaganists are structurally short of energy - which is of course one reason they are all sabre-rattling over potential acreage.
Hi,
It's great to back - and I see lots of the familiar names are still in circulation.
I am really surprised that oil is on offer at $70 and after a quick look at the sector SIA still seems like a sensible investment.
I hope it's as much fun as last time.
Best wishes to all.
Jim
A colleague pointed out this (Beta) site to me. Quite entertaining.
http://simplywall.st/LSE:SIA/soco-international
I guess you can tear up the earnings estimates now, but I thought the web site provided an enjoyable experience.
Jim
The 'calculated fair value' of £ 26-12 sounds pretty compelling, I have to say......:->
I'll have some of whatever they're smoking !
ATB
...oy! ET....get back in the queue ;-)
FWIW I took a very quick search though a few sector notes and was interested to see that analysts broadly expect to see SOCO maintaining the distribution to shareholders next year despite the fall in the oil price. Personally I would be delighted if that were to be the case and (with that payout "only" $120mn ish and with $280mn ish estimated in the bank at year end) there is little doubt that they could afford such a payout if they wished to.
Just in case it is relevant to anyone, I see that the SOCO website now carries a warning:
SOCO is aware of attempts to impersonate the company on social media. SOCO does not use Twitter or have a Facebook page.
I wonder if the share buy back programme will be activated again given the price has dropped below £3 ?
I think it would make sense if you subscribe to the belief that the price of oil will rebound upwards in due course and the share price with it.
I wonder if the share buy back programme will be activated again given the price has dropped below £3
Well, I wouldn't rule it out. However, since the company last did buy backs they've started returning significant cash to shareholders, and indicated they want to move towards a more conventional dividend policy. Given current reductions in FCF, I'd think it unlikely they would pursue both courses at once, unless something radical happens that leaves them will a shed load of cash (certainly not impossible)
Peter