SOCO announces interim results for the half year to 30 June 2017
Thursday, Sep 14, 2017
SOCO, an international oil and gas exploration and production company, today announces its Interim Results for the half year ended 30 June 2017 (“1H 2017”).

Ed Story, President and Chief Executive Officer, commented:

“Underpinned by financial strength that has endured low oil prices and harsh macro-economics, whilst delivering sustained cash returns to shareholders, our tenacity was rewarded on many fronts in the first half of 2017. The $42.7m payable associated with the 2005 sale of our Mongolia assets was recovered in full, whilst in Vietnam, the TGT Full Field Development Plan was formally approved, additional water-handling construction commenced and development infill drilling was completed on time and within budget. In Congo (Brazzaville), favourable terms on the Lidongo Permit were achieved, with potential for three further permits to be agreed. We remain confident that, as we focus on strategically reshaping the business and growing our portfolio, we will continue to deliver substantive value to shareholders.”

OPERATIONAL HIGHLIGHTS

Vietnam

  • Stable rates of production during 1H 2017, averaged 29,600 BOEPD gross and 8,606 BOEPD net to SOCO’s working interest (1H2016: 37,180 BOEPD and 10,862 BOEPD, respectively).
    • Te Giac Trang (“TGT”) production averaged 7,056 BOEPD net (1H2016: 9,252 BOEPD)
    • Ca Ngu Vang (“CNV”) production averaged 1,550 BOEPD net (1H2016: 1,610 BOEPD)
  • Full Field Development Plan for TGT approved in February 2017
  • Two infill wells, TGT-30P on the H1-WHP and TGT-29P on the H5-WHP, executed on time and within budget
    • TGT-30P producing at 2,500 BOEPD and TGT-29P producing at 1,600 BOEPD
  • Installation of new processing equipment on the TGT H1 Wellhead Platform (“WHP”) currently well advanced which will allow for higher levels of water management and oil production

Republic of Congo (Brazzaville)

  • Discussion to improve the commercial terms of the 20-year Lidongo Permit concluded in 1Q 2017
    • Discussions with the authorities and the Marine XII partners on commercialisation of the Lidongo area continue.
  • Applications for three further exploration permits were submitted in March 2017 for retention of the Lideka East, Viodo and Loubana prospect areas beyond the expiry of the Marine XI Exploration Licence.

FINANCIAL HIGHLIGHTS

  • Increase in return to shareholders to $21.0m via a final dividend of 5 pence per share for 2016 (1H 2016: $9.4m), paid on 16 June 2017
  • Ongoing balance sheet strength; half year-end cash and liquid investments balance of $132.0m with no debt ($100.3m at 31 December 2016)
    • $42.7m collected in March in association with the 2005 sale of Mongolia assets
  • Low cash operating costs just under $13/bbl (1H 2016: $10/bbl)*
  • Cash capital expenditure down to $15.5m (1H 2016: $27.2m)
  • Revenues up at $74.0m (1H 2016: $72.7m)
  • Net operating cash flow of $27.1m (1H 2016: $16.2m)
  • Net loss down to $6.7m (1H 2016: loss $12.2m)
  • Average realised crude oil price up at $53.90/bbl, a $2.13 premium to Brent (1H 2016: $40.89/bbl)

OUTLOOK

  • 2017 production guidance range is maintained at 8,000 to 9,000 BOEPD, reflecting planned shut-ins later in the year
  • Formal signing of Production Sharing Contract over Blocks 125 & 126, offshore Vietnam, after Vietnamese Government and Prime Minister approval in August 2017.
  • Ongoing focus on sustainable cash flow generation and commitment to strategy of cash returns
  • 2017 capital expenditure of $50.0m (Vietnam $35.0m, Africa $15.0m) fully funded from existing cash resources
  • Transformational business development involving growth and rationalisation of the portfolio
For more information, please visit: https://www.socointernational.com
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