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SOCO slides on Canaccord downgrade

RESULTS: Shares in the frontier oil and gas explorer headed south after Canaccord questioned their trading premium over peers
March 6, 2014

Shares in frontier oil and gas explorer SOCO International (SOCO) were marked down heavily after Canaccord questioned their trading premium to peers' and downgraded its advice to sell.

IC TIP: Hold at 410p

The signing of a gas sales contract meant that SOCO's daily net entitlement technically increased by 8 per cent last year, to 16,694 barrels of oil equivalent (boe). But that was something of an accounting gain that didn't flow through to the financial results. These instead suffered from the temporary curtailment of production at its key TGT field in Vietnam, as well as the fall in oil prices, which meant each barrel sold realised around $5 less than it did the previous year. As a result, cash profits slipped by 5 per cent to $473m (£283m), while operating cash flows came in at $314m - down from $335m in 2012.

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