Preliminary results for the year ending 31 December 2017

SOCO, an international oil and gas exploration and production company, today announces its preliminary results for the year ended 31 December 2017.

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

“2017 saw the further return of cash to shareholders, stable production, and a renewed focus on SOCO’s business strategy. Combined with a strong balance sheet, low operating costs and continued financial discipline the Company is well positioned for growth. The two key achievements this year were the approval of an updated FFDP for the TGT field and securing the PSC for Blocks 125 & 126, offshore central Vietnam. We continue to have a core belief in delivering total shareholder value and we are today announcing a recommended final dividend for 2017 of 5.25 pence per share. To add to the commitment to an annual dividend, a business development team was established in 2017 to emphasise the Company’s commitment to capital growth. In 2017 the team considered a number of opportunities and, although the merger with Kuwait Energy did not materialise, SOCO continues to pursue growth opportunities of scale, which meet our investment criteria. We have the right people and the right financial strength to create opportunities to grow the business and we look forward to delivering in 2018”. 

2017 FINANCIAL HIGHLIGHTS

  • Strong and robust balance sheet, zero debt, solid cash flow, and low cash operating costs:
    • Revenue of $156.2m (2016: $154.6m), an average realised crude oil price of $56/bbl (2016: $45/bbl), a premium to Brent of over $2/bbl
    • $45.0m of cash generated from operations (2016: $46.0m)
    • Loss of $157.3m (2016: $4.2m restated), including E&E write offs of $152.3m (2016: $2.2m write back restated). Loss prior to E&E impact of $5.0m (2016: $6.4m restated)
    • Year-end cash and liquid investment balance of $137.7m (2016: $100.3m) and no debt
    • Receipt of the remaining proceeds of $42.7m associated with the disposal of our Mongolia assets
    • Low cash operating expenditure of $13.73/boe (2016: $11.70/boe)*
    • 2017 cash capital expenditure of $29.3m (2016: $40.1m), was fully funded from existing cash resources 
  • Recommended dividend of 5.25 pence per share (approx. $24.3m)
    • Dividends to shareholders during 2017 of $21.0m (2016: $17.5m)

*See Non-IFRS measures note 12

2017 OPERATIONAL HIGHLIGHTS

  • Low cost net production average of 8,276 BOEPD (2016: 9,883 BOEPD) in line with guidance - TGT production averaged 6,724 BOEPD (2016: 8,330 BOEPD) and CNV production averaged 1,552 BOEPD (2016: 1,553 BOEPD)
  • Updated FFDP for the TGT field, offshore southern Vietnam, which was approved in February 2017 allowing for:
    • Installation of new processing equipment on the TGT H1-WHP, completed to allow for higher levels of liquid handling
    • Two infill wells, TGT-30P on the H1-WHP and TGT-29P on the H5-WHP, which were executed on time and within budget
  • A PSC for Blocks 125 & 126, offshore central Vietnam, was signed in October 2017, awarding SOCO a 70% operated interest over the two blocks
  • New 25-year PEXs awarded over each of the Viodo, Lideka and Loubana areas within the former Marine XI Block, offshore Congo (Brazzaville)
  • Group year-end 2017 commercial (2P) reserves of 28.1 MMboe (2016: 33.3 MMboe)

OUTLOOK FOR 2018

  • Production guidance of 8,000 to 9,000 BOEPD net with production levels above this dependent upon the outcome of the 2018 drilling programme on TGT and CNV
  • 2018 capex of approx. $40m fully funded from existing cash resources, to cover the development drilling and infrastructure upgrade on our existing Vietnam assets and purchase, processing and interpretation of seismic data for our new venture Blocks 125 & 126 offshore Vietnam  
  • Maintaining commitment to sustainable cash flow generation and returns to shareholders
  • Continued pursuit of new business opportunities to transform the business in line with our financial strategy of capital discipline, capital allocation and capital return

ENQUIRIES:

SOCO International plc  Tel: 020 7747 2000

Ed Story, President and Chief Executive Officer
Jann Brown, Managing Director and Chief Financial Officer
Mike Watts, Managing Director
Sharan Dhami, Group Investor Relations Manager

Camarco  Tel: 020 3757 4980

Billy Clegg
Georgia Edmonds
Owen Roberts

NOTES TO EDITORS

SOCO is an international oil and gas exploration and production company headquartered in London, admitted to the premium listing segment of the Official List and traded on the main market of the London Stock Exchange. The Group 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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