With a second wellhead having commenced production at SOCO's Te Giac Trang (TGT) site in Vietnam last month, production and earnings soared in the six-month period. But, with no further significant boosts to output anticipated in the near term, and with only limited explorations opportunities in the pipeline, catalysts for further share price upside are hard to spot.
Total production at TGT now averages roughly 50,000 barrels of oil per day (bopd) – but management expects gross TGT production to increase only marginally for the rest of the year, to 55,000bopd. Still, with production operating costs rising slightly, from $10 a barrel to $10.50, and SOCO's realised average oil price up 2 per cent year-on-year to $120.68 a barrel, the ramp-up in output sent profits soaring. The group's only other producing asset, the Ca Ngu Vang liquid and gas field in Vietnam, produced a rather more modest 2,178 barrels of oil equivalent a day in the first half.
SOCO's remaining assets, all in Africa, are still at an exploration stage – the most advanced project is the Marine IX site in the Congo where a second test well is expected before the year-end.
Bank of America Merrill Lynch expects full-year EPS to treble to 76¢ (48p) and estimates net asset value of 499p a share.
SOCO INTERNATIONAL (SIA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 353p | MARKET VALUE: | £1,173m | |
| TOUCH: | 352-353.4p | 12-MONTH HIGH: | 387p | LOW: 253p |
| DIVIDEND YIELD: | nil | PE RATIO: | 10 | |
| NET ASSET VALUE: | 350¢* | NET CASH: | $178m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 26 | 14 | 2.0 | nil |
| 2012 | 263 | 202 | 29.2 | nil |
| % change | +896 | +1293 | +1360 | - |
*Includes intangible assets of $209m or 63¢ a share £1=$1.575 | ||||
