Preliminary Results for the Year Ending 31 December 2014

SOCO, an international oil and gas exploration and production company, today announces its preliminary results for the year ended 31 December 2014.

Operational Highlights

  • Annual production net to the Group’s working interest averaged 13,605 BOEPD (2013: 16,694 BOEPD)
  • TGT production net to the Group’s working interest averaged 11,538 BOEPD
  • TGT H5 development ahead of schedule  for first oil targeted in September/October 2015
  • ERC Equipoise study of TGT field completed demonstrating TGT’s full potential
  • Against a background of lower oil prices and resultant uncertainty around the scope and timing of future development, a prudent approach to reserve booking has reclassified a portion of reserves into Contingent Resources
  • 2014 year-end Group 2P reserves of 40.8 mmboe and 2C Contingent Resources of 38.9 mmboe

Financial Highlights

  • Revenue of $448.2 million (2013: $608.1 million)
  • Profit after tax of $14.0 million (2013: $104.1 million) after non-cash $79.5 million of exploration write-offs and $60.5 million impairment of CNV
  • Cash generated from operations of $251.2 million (2013: $314.4 million)
  • Returned c.$119 million in cash to shareholders, or 22 pence per share, in October 2014
  • Strong balance sheet: no debt and a cash balance (including cash equivalents and liquid investments) at 31 December 2014 of $166.4 million (2013: $210 million)

Corporate Highlights

  • Appointment of Anya Weaving as Chief Financial Officer in May 2014
  • Exemplary health and safety record maintained

Outlook for 2015

  • Operational focus on bringing TGT’s H5 fault block production on line and working with TGT partners to submit updated FDP in Q3
  • Production guidance maintained at 10.5-12 KBOEPD reflecting reduced scope of TGT drilling
  • Sufficient cash flow and cash balances to meet ongoing capital expenditure
  • Balance sheet capacity to take advantage of opportunities in the market as they arise
  • Recommended dividend of 10p per share (c.$50 million) to be approved at the AGM
  • Ongoing focus on sustainable cash flow generation and commitment to strategy of cash returns

Ed Story, President and Chief Executive Officer of SOCO, commented:

"2014 was a strong year for SOCO. We concluded an independent study confirming TGT’s full potential and also progressed development with the TGT H5 discovery remaining on a fast track for first production in Q3 2015. We also delivered a second material cash return to shareholders of c. $119 million. Notwithstanding the challenging market conditions, given our financial strength and near-term outlook and based on the results of 2014, the Board is recommending a cash dividend of 10 pence per share, amounting to c.$50 million.

We are committed to evaluating every alternative to optimise our exposure to upside without jeopardising our focus on sustainable cash generation. We remain value driven, see the current environment as an opportunity to plan for future growth and believe SOCO is well positioned to continue to execute its strategy.”

ENQUIRIES:

SOCO International plc

Anya Weaving, Chief Financial Officer

Antony Maris, Chief Operating Officer

Tel: 020 7747 2000

Bell Pottinger

Nick Lambert / Elizabeth Snow

Tel: 020 3772 2500

Latest news