Preliminary results for the year ending 31 December 2016

SOCO, an international oil and gas exploration and production company, today announces its preliminary full year results for the year ended 31 December 2016.

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

“With our disciplined approach to capital allocation, we performed well against our peers during the prolonged oil price downturn and continued to return cash to shareholders, with a recommended 5p dividend announced today. Following the improved macro environment, we are increasing our efforts to provide material growth to the Company. During the extremely low and volatile prices, asset or corporate transactions were difficult to secure. However, at current, more stable prices we are seeing a window of opportunity which we intend to take advantage of in order to grow the portfolio and create more value for shareholders.

After nearly two years of very limited investment on our prime asset, we are now able to address the lack of drilling and the liquid handling restrictions on the TGT producing field. With development drilling recommenced at the end of 2016 and with an approved updated FFDP, we expect to arrest the performance decline and grow production.”

2016 FINANCIAL HIGHLIGHTS

  • Robust balance sheet, zero debt, solid cash flow, low cash operating costs
    • Year end cash balance of $100.3m (2015: $103.6m) and no debt;
      • $150.5m as of 22 March 2017 following receipt of the remaining proceeds ($42.7m) associated with the disposal of our Mongolia assets
    • Revenue of $154.6m (2015: $214.8m)
    • Average realised crude oil price of $45 per bbl (2015: $54), a premium to Brent of over $1 per bbl
    • $46.0m generated from operations (2015: $80.3m)
    • After tax loss of $18.3m (2015: $33.8m loss)
    • Cash capital expenditure of $40.1m (2015: $92.4m), fully funded from existing cash resources
      • Vietnam $13.9m
      • Africa $26.2m, including cost savings achieved on the MPS well
    • Low cash operating expenditure of $11.70 per bbl1 (2015: $10.06 per bbl); operating cash flow break-even oil price per bbl1 still in the low $20s
  • Recommended dividend of 5 pence per share (approx. $20.6m)
    • Dividends to shareholders during 2016 of $17.5m via two 2p dividends (2015: $51.1m)
    • $455m returned to shareholders to date.

2016 OPERATIONAL HIGHLIGHTS

  • Net production of 9,883 BOEPD (2015: 11,976 BOEPD)
  • Resumption of TGT development drilling in November
  • Approval of the TGT updated FFDP
  • New ventures negotiations for Blocks 125 & 126, offshore Vietnam, near conclusion; the execution of a PSC is expected 1H 2017
  • Marine XI Lidongo Permit Production Exploitation Licence application has been approved by authorities granting 20 year rights; renegotiation of PSC commercial terms are near positive conclusion
  • Group year-end 2016 commercial reserves 33.3 MMboe (2015: 37.3 MMboe) following production

OUTLOOK FOR 2017

  • Continued focus on value creation, sustainable returns and capital discipline
  • Heighten the pursuit of growth and rationalisation of our portfolio, with Mike Watts and Jann Brown, former FTSE100 directors, spearheading business development efforts
  • Blocks 125 & 126, offshore Vietnam, PSC formal signing expected in the first half
  • Production Licence applications to be considered for remaining discovery areas on Marine XI in Congo
  • 2017 capital expenditure of approx. $50m to cover the development drilling and infrastructure upgrade on our existing Vietnam assets, purchase of seismic data for our new venture Blocks 125 & 126 in Vietnam and PEX bonuses in Africa on Marine XI
  • Production guidance of 8,000 to 9,000 BOEPD for the full year 2017

ENQUIRIES:

SOCO International plc

Roger Cagle, Deputy Chief Executive and Chief Financial Officer

Antony Maris, Chief Operating Officer

Tel: 020 7747 2000

Bell Pottinger

Nick Lambert

Elizabeth Snow

Tel: 020 3772 2500

NOTES TO EDITORS:

SOCO is an international oil and gas exploration and production company, headquartered in London and traded on the London Stock Exchange. The Company has field development and production interests in Vietnam and exploration and appraisal interests in the Republic of Congo (Brazzaville) and Angola.

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