Final Results

Soco International PLC
29 April 2005

SOCO International plc

('SOCO' or 'the Company')

Preliminary results for the year ended 31 December 2004



SOCO is an international oil and gas exploration and production company,
headquartered in London.  The Company has interests in Vietnam, Mongolia, Yemen,
Libya and Thailand, with production operations in Yemen and Mongolia.  SOCO
today announces preliminary results for the year ended 31 December 2004. As
announced on 1 April 2005, SOCO has agreed to dispose of its Mongolia
operations, subject to gaining approval from its shareholders.



HIGHLIGHTS

•  Solid operating results with post tax profit of £15.5 million (2003:
   restated post tax profit of £5.7 million) including profit on sale of Tunisia
   assets

•  Gain of £8.4 million relating to sale of Tunisia assets

•  Earnings per share of 22.2p (2003: restated earnings per share of 8.2p)

•  Year end cash balances and short term deposits of £37.0 million, no debt

•  Production up to 5,533 BOPD (2003: 5,409 BOPD)

•  Acquisition and reinterpretation of seismic in Vietnam to prepare for
   extensive exploratory and appraisal drilling programme in 2005, CNV-3X well
   spudded in January, preliminary testing operations have begun

•  Basement drilling in East Shabwa, Yemen, has exceeded expectations

•  Restructuring of ODEX completed with various opportunities being
   explored

•  Continued streamlining of portfolio focussing on projects offering
   more immediate upside



Ed Story, President and Chief Executive of SOCO, said:

'During 2004 we have laid the foundations for the future growth of the Group.
We have continued to build on our strategic alliances with key partners and
taken decisive steps to streamline our portfolio.

We are optimistic as we embark upon one of the most important and exciting
drilling programmes in our history that the drill bit will provide excellent
results for SOCO in the coming year. '

                                                                   29 April 2005



ENQUIRIES:

SOCO International plc                                       Tel:  [phone]
Ed Story, President and Chief Executive
Roger Cagle, Deputy Chief Executive
and Chief Financial Officer

College Hill                                                 Tel:  [phone]
Ben Brewerton
Nick Elwes




                   CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT



SOCO ended 2004 in an extremely strong position. After 12 months of intensive
foundation-laying, we are poised to deliver positive results in 2005. Much of
our preparation has, by definition, taken place behind the scenes and not in the
public spotlight. Nevertheless, we are confident that 2004 will be remembered as
one of the most important - and pivotal - years in the development of the
Company.



SOCO's interests in Vietnam and Yemen remain the Group's core assets; both
providing material upside and the latter providing strong operating cash flow.
During the third quarter of 2004, the Company's first Basement targeted deviated
well in Yemen was spudded, signifying the start of the second major multi-well
drilling campaign in the Company's history.



Our multi-well drilling programme in Vietnam commenced in January 2005. Before
the drilling programme could begin in Vietnam, we needed to improve the
processing of our existing seismic in order to enhance the subsurface image to
better target wells on our Ca Ngu Vang discovery.  New seismic was acquired in
untested areas where geological studies indicated additional prospectivity.
Accordingly, our primary focus was on seismic - both acquiring new data, and
reprocessing and reinterpreting existing data.



While continuing to evolve strategic alliances with key partners in all our
areas of interest, we took decisive steps to streamline our asset portfolio in
others. This continuing process is vital to ensuring that we stay focused on our
long term strategy for building shareholder value.



FINANCIAL AND OPERATING RESULTS



Even while significantly rebalancing our portfolio in favour of those assets
promising the most upside, the Company produced solid operating results in 2004
reporting increased after tax profits of £7.1 million, excluding the gain of
£8.4 million on the sale of the Tunisia assets, versus restated after tax
profits of £5.7 million in 2003. With our production in Tunisia included in the
Group's statistics through the completion of the sale in December, production
net to the Company's working interest increased slightly, rising to 5,533
barrels of oil per day ('BOPD') in 2004 from 5,409 BOPD the prior year. The
Company finished the year in a stronger financial position than it began as cash
and investments, which includes short term deposits, totalled £37.0 million
compared to £32.9 million at year end 2003.



SIGNIFICANT EVENTS



In March 2004, we completed the restructuring of our interest in the ODEX
Exploration Limited ('ODEX') joint venture. First announced in our 2003 annual
report, this transaction created a stronger consortium comprising SOCO North
Africa (34%), and subsidiaries of Oilinvest (Netherlands) B.V. (46%) and of
Joint Stock Bank of the Gas Industry Gazprombank (20%).  One of the consortium's
early public technical challenges was to establish itself as a credible
participant during Libya's first open bid round for exploration areas, which
took place at the beginning of 2005. Although its bid did not result in an award
of acreage, ODEX's demonstration of logistical and technical expertise during
the bidding process created a strong platform for future success. In December,
we completed the sale of our interests in the Zarat Permit in the Gulf of Gabes,
offshore Tunisia, with an effective date of 1 July 2004. As a result, SOCO
received a cash consideration of US$25 million subject to applicable working
capital adjustments.







RETROSPECTIVE



Vietnam

Developments in Vietnam were encouraging as we prepared for the evaluation of
earlier discoveries and for testing additional exploration targets. The
extensive programme included the advanced reinterpretation of existing seismic
data, the acquisition and interpretation of new 3D seismic data and the
logistical preparation for a complex multi-well drilling campaign. Thanks to the
efforts of the Joint Operating Company staffs, we were able to improve upon the
schedule of the critical path, allowing us to spud the first well ahead of the
original timetable.



The first well in this programme will appraise the Ca Ngu Vang ('CNV') structure
on Block 9-2 where the discovery well CNV-1X was drilled in 2002 and tested a
maximum combined rate of approximately 4,500 barrels of crude oil equivalent per
day. The high angle deviation well, CNV-3X, was spudded on 30 January 2005 and
reached a measured depth of approximately 6,100 metres.



Yemen

Our experience with Basement reservoirs in Vietnam played an important part in
driving progress in Yemen's East Shabwa Development Area ('East Shabwa'). In
September 2004, we commenced a four well programme, three of which were deviated
wells specifically targeting the Basement interval. These are the first deviated
wells targeting Basement to be drilled at East Shabwa and obtaining partner
consensus to proceed with the programme was one of the year's successes.



Three of the four wells drilled to date in this programme, which was designed
primarily to test the limits of the Kharir Basement structure, have met or
exceeded expectations, with the third well tested achieving flow rates greater
than 6,500 BOPD and the final well testing greater than 5,500 BOPD. The first
well drilled in the programme encountered low density fractures and is suspended
awaiting a technical decision.



PROSPECTIVE



Throughout 2005, we will be reporting results from the drill bit as we proceed
with the Vietnam and Yemen drilling programmes. The CNV-3X well in Vietnam is
commencing preliminary testing operations. In Yemen, we have proceeded with the
rig already under contract on an extension of the drilling programme initiated
in 2004, targeting both reserve additions and increased production from the
Kharir field. The consortium anticipates contracting another rig later in the
year to evaluate one or more new Basement structures. We also anticipate
completing a comprehensive upgrade of the East Shabwa surface facilities.



The streamlining of our asset portfolio will continue, redirecting our efforts
toward projects that offer more immediate upside to the Company. In April 2005,
the Company signed a sale and purchase agreement with a Chinese company which
has agreed to purchase the entities owning the whole of SOCO's interests in the
Tamtsag Basin in Mongolia. This transaction will add US$30 million immediately
to SOCO's cash balances if the deal is approved at an Extraordinary General
Meeting of shareholders. Additional cash consideration of US$10 million will be
held in escrow and paid 18 months after closing assuming no material undisclosed
liabilities have arisen against the companies sold. Consideration tied to
production in excess of 27.8 million barrels produced subsequent to 1 January
2005 could add a further sum of approximately US$53 million to the total amount
received. Discussions are ongoing with possible farm-in/equity participants in
Thailand.



CORPORATE



At the May 2004 Annual General Meeting, Mr Roger Brittain retired as an
independent Non-Executive Director. Roger played an instrumental role in forming
SOCO and his departure - formally announced in 2003 - followed seven years of
dedicated service to the company.



Mr Martin Roberts was appointed to the Board as an independent Non-Executive
Director in September 2004. During his 35-year career with the international law
firm Slaughter and May, Martin was closely involved with the energy sector. He
was appointed a partner in 1975 and retired from the practice in 2002. His
skills and experience have proved an immediate asset to the SOCO Board.



OUTLOOK



Our industry is undergoing a period of transformation as a growing number of
national oil companies compete in the international arena, deploying formidable
resources beyond their national borders. Results from recent bidding rounds,
including those in Libya and Yemen, indicate that these companies are prepared
to bid aggressively to establish a presence in new territories in order to
protect supplies for their sovereign energy demands.



Competing head-on with such companies is not a viable option for SOCO. Instead,
we believe that our future lies in reinforcing the strength and value of our
strategic partnerships with these entities and creating new relationships in the
early development of other national oil companies' activities abroad. These
groups control access to some of the world's most prolific and potentially
productive hydrocarbon reserves.



Indeed, since our formation, we have worked hard to build relationships with
national oil companies in those parts of the world where we plan to focus our
portfolio. We have focused on capitalising on these links, which were greatly
expanded by the alliance forged between the Company and its strategic
shareholder group in 1999 and we expect the alliance to become an increasingly
important building block in realising this strategy.



SOCO strives to bring a fresh perspective to industry challenges and to apply
standard tools in different ways. This capacity for innovation, coupled with
strong regional ties, is the key to opening up new horizons and delivering
results.



During the next chapter in SOCO's development, drill bits will write the
headlines. This time next year, we are optimistic that they will tell a story of
demonstrable results based on the solid foundations that have been laid. We will
continue to build on these foundations by playing to our strengths while
streamlining our portfolio and further focusing our resources.



As we negotiate the challenges ahead, our strategic partnerships will become
increasingly important. These alliances have always been fundamental to SOCO's
growth. Looking ahead, they will be one of the key drivers in delivering our
strategic goals - recognising opportunity, capturing potential and realising
value.


                              REVIEW OF OPERATIONS



During 2004, solid foundations were laid for the future growth of the Company in
preparation for the most important exploration drilling programme in SOCO's
history. This programme began with positive results in Yemen which immediately
impacted production during 2004.



Overall, crude oil production net to the Group's working interest for 2004 was
up slightly to 5,533 barrels of oil per day ('BOPD') compared to 5,409 BOPD in
2003. This increase reflected a good rebound from the first half of 2004 as
positive production results came in from the Basement drilling programme in
Yemen and a second producing well was put on line in Tunisia. Despite drilling
delays due to lack of rig availability in the first half of 2004, net daily
production from the East Shabwa Development Area ('East Shabwa') in Yemen
contributed 3,958 BOPD to the total, compared to 3,896 BOPD in 2003. In
Mongolia, production was 338 BOPD, compared to 412 BOPD in 2003, as the
remoteness of operations there made sourcing spare parts for production
equipment failures difficult, thus causing interruptions. The discontinued
operations in Tunisia, where production statistics were included through the
completion date in December 2004, contributed the remainder of total production.



VIETNAM



SOCO holds its interests in Vietnam through an 80% holding in its subsidiary
SOCO Vietnam Ltd ('SOCO Vietnam'). SOCO Vietnam holds a 25% working interest in
Block 9-2 and a 28.5% working interest in Block 16-1 in the Cuu Long Basin,
offshore Vietnam. Principal partners in Vietnam are subsidiaries of PTT
Exploration and Production Public Company Ltd of Thailand (PTTEP Thailand) and
Petrovietnam, Vietnam's state oil company. Together, the partners operate
through Joint Operating Companies ('JOCs').



Both Blocks are contiguous to the Bach Ho field, where 2004 production
reportedly averaged approximately 220,000 BOPD and 220 million cubic feet of gas
per day ('MMCFD'), and the Rang Dong field, where production reportedly averaged
approximately 45,000 BOPD, mainly from the Basement.



Review of 2004 activities

In Vietnam, the year started with the focus firmly on seismic - both acquiring
new data and reprocessing and reinterpreting existing data. The results of this
work formed the basis of an extensive exploratory and appraisal drilling
programme, which is scheduled to continue throughout much of 2005.



In total, the JOCs acquired approximately 650 square kilometres of new 3D
seismic over several leads and prospects in Block 9-2 and Block 16-1.
Encouragingly, these leads and prospects appear similar to recent significant
discoveries in nearby blocks within the Cuu Long Basin.



During the year, existing data over and around the Ca Ngu Vang ('CNV') structure
was reprocessed using advanced pre-stack depth migration ('PSDM') technology.
This technology produces higher quality data by using segmented velocity
information to enhance seismic images of sub-surface features. To date, PSDM has
been successfully used by other operators elsewhere in Vietnam. The reprocessing
resulted in a clearer subsurface image allowing a more accurate interpretation
and well targeting. Based on the data interpretation of the new and reprocessed
data, detailed well planning and procurement were undertaken to ensure a
cost-effective three-firm plus three-option well drilling programme.





Subsequent events and 2005 outlook

The appraisal well on the CNV structure that spudded in 30 January 2005 reached
target depth on 16 April 2005.  Reaching a measured depth ('MD') of 6,123
metres, the CNV-3X well has the distinction of being the longest MD well ever
drilled in Vietnam.  The well reached a total vertical depth of 4,426 metres
penetrating approximately 2,000 metres of granitic Basement at an average angle
of 82 degrees from vertical intersecting various fault and fracture domains in
the central and western parts of the structure to the west of CNV-1X, the
discovery well drilled in 2002.



CNV-1X tested to a maximum combined rate of approximately 4,500 barrels of crude
oil equivalent daily. This comprised approximately 3,100 BOPD and approximately
7.9 MMCFD from the Basement interval.



At the date of this report, the well is commencing preliminary testing
operations. A full evaluation of the CNV-3X well will be performed and, should
the well confirm the potential of the structure, the results will be
incorporated into an application to the Vietnamese authorities for approval of
an accelerated development schedule.



Upon completion of the CNV-3X programme, the rig will be moved to Block 16-1 to
spud an exploratory well to test the Te Giac Trang ('TGT') structure in the
eastern part of the Block. The TGT structure is one of a series of Oligocene
prospects delineated by the 3D seismic acquired over the Block in 2004. This is
the same geological sequence in a similar setting in which a major discovery was
recently reported in another part of the Cuu Long Basin.



YEMEN



SOCO continues to derive most of its production from its interests in Yemen.
During 2004, production increased compared to the previous year due to the
continued appraisal and development of the Basement interval in concert with a
proactive workover campaign designed to reduce individual well water cuts from
the producing Cretaceous reservoir. By the end of 2004, the field was producing
at around 29,000 BOPD compared to 23,000 BOPD at the end of 2003.



Production from East Shabwa is transported by pipeline and commingled with
production from the neighbouring Masila block before transportation by pipeline
to the coastal Ash Shihr export terminal. SOCO's crude entitlement is sold under
a 12-month spot market contract.



The Group holds its interest in East Shabwa through its 58.75% majority
shareholding in Comeco Petroleum Inc., ('Comeco'), which holds a 28.57% direct
interest in Block 10. A subsidiary of Occidental Petroleum, which is also a
co-venturer in East Shabwa with a 28.57% interest, holds the remaining minority
interest in Comeco. Total E&P Yemen, with an interest equal to Comeco's,
operates the concession and a subsidiary of Kufpec, the Kuwaiti foreign oil
company, holds the remaining 14.29%.



Review of 2004 activities

The Group's technical experience working with granitic Basement in Vietnam,
helped in the 2003 discovery of the Kharir Basement pool and the subsequent
acceleration of the appraisal and development of this horizon in Yemen. Despite
delays caused by the lack of rig availability, the consortium launched an
extended drilling campaign in the second half of 2004. This campaign included
the consortium's first ever deviated wells specifically targeting the Basement
interval.



To date, most production has come from the Cretaceous clastic Biyad reservoir in
the Kharir field. This interval is characterised by the high water cuts that are
typical of other regional wells producing from this reservoir. To mitigate the
issues associated with dealing with the disposal of high volumes of produced
water, the consortium launched a major workover campaign designed to reduce
water cuts from individual wells and improve well performance. The success of
this campaign was demonstrated by the fact that the consortium was able to
maintain the average oil production rate from the Cretaceous during 2004 at 2003
levels.



During the year, work was completed on production facilities to reduce
bottlenecks and increase oil handling capacity. In addition, facilities and
techniques specifically designed to handle a large volume of associated gas from
the Basement have been evaluated. Extra facilities will be installed and some
additional techniques will be employed over the next two or three years in order
to enable the consortium to increase its capability to produce from Basement.
This, together with adding water injection capability to improve pressure
maintenance in the Basement reservoir, should add considerable productive
capability from the interval.



Block 10 is also one of the Group's most exciting exploration areas.
Reprocessing of all the existing 2D seismic data acquired over the Block was
completed during 2004. Interpretation of this new data was used to identify
several high potential exploration targets. The most prospective will be drilled
as part of the 2005 drilling programme.



During the year, the partnership drilled two new production wells on the
Cretaceous Atuf field. The first of these, ANW006B, was originally drilled as an
injector well. It reached a depth of 1,829 metres, where it encountered
unexpected reserves in the Upper Biyad formation. Consequently, ANW006B was
completed as a producer rather than an injector well and produces approximately
1,500 BOPD.



The second well, ANW007, also encountered the target interval higher than
expected. It was completed as a producer and tied into the field's production
system mid-year. In line with test expectations, ANW007 crude production is
currently averaging approximately 1,800 BOPD.



As a result of these successes, work began on a re-evaluation of the Atuf field
to identify additional producing locations. We are optimistic that this
re-evaluation will deliver substantial benefits during 2005 and beyond.



In August, work began on drilling deviated wells specifically targeting the
Basement interval of the Kharir structure. The first of these, KHA-401, reached
a depth of 3,873 metres. The principal objective of the well was to test the
development of potential productive fractures at depth, in this case over 600
metres below the top of the Basement and well below the Basement interval
penetrated by previous wells.



Initial interpretations of test results on KHA-401 indicate that it encountered
reservoir, but that the fracture development appears inadequate to support
economic production at this depth and location. Currently the well is suspended
while options for side tracking it to a shallower interval are explored.



KHA-402 was spudded in October and reached a total depth of 3,441 metres. The
well was drilled to test the potential of the eastern end of the Kharir field on
the flank of the structure. The well was initially tested in December, achieving
a rate of 550 BOPD before being shut-in for a long-term build-up test. The well
was re-opened on 26 January 2005 and produced at more than 700 BOPD.



KHA-403, the third well in the initial programme, spudded on 6 December and
reached a total depth of 3,383 metres. The well was drilled to delineate the
Basement to the west and to evaluate reservoir development in the undrilled
western extension of the structure. Tested in February 2005, KHA-403 produced at
more than 6,500 BOPD and is now connected to Kharir's main production
facilities.



Subsequent events and 2005 outlook

The fourth Basement well in the drilling programme initiated in 2004, KHA-404,
was spudded on 1 February 2005 and reached a total depth of 3,539 metres. The
well was drilled into the northern extension of the Basement with the objectives
of appraising this area and providing information for a pilot water injection
programme. The well tested at a rate greater than 5,500 BOPD in early April.
KHA-405 spudded on 28 March 2005 as a continuation of the Kharir Basement
evaluation programme.



This year there will be the continuation of a very active drilling programme on
Block 10. Towards the end of this period, it is possible that two exploration
wells will be drilled on recently identified Basement prospects. Initially, the
exploitation programme will continue with plans to drill six wells. A second
drilling phase of seven wells is contingent upon the success of phase one. In
parallel, the need for gas handling, water re-injection equipment and facility
debottlenecking will mean further upgrades to the surface production facilities.



MONGOLIA



Mongolia's Tamtsag Basin is a rank frontier exploration area in which the Group,
primarily through its wholly owned subsidiary SOCO Tamtsag Mongolia ('SOTAMO'),
holds an approximate 95% working interest in production sharing contracts ('PSCs
') over Contract Areas 19, 21 and 22.



Huabei Oilfield Services, the Chinese company providing drilling services to
SOTAMO, did not meet the specific conditions required in order for it to take a
pro rata working interest of 10% in the PSCs. A 5% working interest, carried by
the Group through the exploration phase, is held by Petrovietnam, the Vietnamese
national oil company.



To date the Group has drilled only 31 wells (including one on Contract Area 20,
before its relinquishment) in an area of approximately 26,000 square kilometres.
All Mongolian crude oil production is trucked to the Aershan Oilfield in China,
from where it is transported by pipe and rail to a refining complex in Hohhot
and sold at the prevailing market rate.



During 2004, the Group drilled four exploration wells. Three were designed to
appraise the Tolson Uul North field discovered in 2003, whilst the fourth was a
wildcat exploration well on a structure to the north of Tolson Uul North.



Review of 2004 activities

After securing exploration licence extensions from the government of Mongolia in
January 2004, the Group completed a 102 square kilometre 3D seismic programme
over the Tolsun Uul North area to better define the structure and select well
locations. During the period from July to October, SOTAMO completed the four
well drilling programme to appraise the Tolsun Uul North discovery and explore a
similar structure to the north. All four wells encountered hydrocarbons and two
were completed as part of the pilot production programme.



The first well, 19-20, was drilled to a total depth ('TD') of 2,410 metres,
encountering good oil shows in the Tsagaantsav formation. Initial production
steadied at approximately 70 BOPD. Well 19-21 encountered good oil shows in the
Zuunbayan and the Tsagaantsav formations while drilling to a TD of 2,625 metres.
This well was completed in the Zuunbayan formation with an initial production
rate of approximately 120 BOPD. Well 19-22 was drilled to a TD of 2,600 metres.
Although it encountered good oil shows in the Tsagaantsav formation, a sudden
and total loss of circulation occurred in a fracture zone during drilling. The
well was successfully cased and will be further evaluated during 2005. The final
well of the 2004 programme, the 19-23, was drilled on a previously untested
structure to a TD of 2,253 metres. It encountered good oil shows in the
Zuunbayan formation, extending the basin's productive area approximately nine
kilometres to the north. The well has since been suspended for further
evaluation.



Subsequent events and 2005 outlook

In April 2005, the Company entered into an agreement to sell the whole of its
Mongolia interest to Daqing Oilfield Limited Company.



LIBYA



In March 2004, the Group restructured its interest in the ODEX Exploration
Limited ('ODEX') joint venture. This move created a consortium in ODEX
comprising SOCO North Africa Ltd. (34%), and subsidiaries of Oilinvest
(Netherlands) B.V. (46%) and Joint Stock Bank of the Gas Industry Gazprombank
(20%).



Review of 2004 activities

The ODEX consortium proved its usefulness as a vehicle through which to compete
for significant opportunities during Libya's first open bid round at the start
of 2005. Although the consortium did not win any of its bids in this auction
process, it is clear that it now has the scope to compete seriously with major
companies on larger opportunities and the logistical and technical expertise to
capitalise on any coming opportunities.



Subsequent events and 2005 outlook

ODEX will continue to be the vehicle through which we explore various
opportunities that may arise in Libya and certain parts of Africa. The
consortium is well placed to take advantage of its strong regional relationships
that could provide competitive advantages to some emerging hydrocarbon
potential.



THAILAND



Through its wholly owned Thailand subsidiary, SOCO holds a 100% interest in
Block B8/38 located offshore in the Gulf of Thailand. This Block contains a
small, undeveloped crude oil field, Pornsiri. Due to the marginal economics of
the field under previously prevailing price scenarios, little activity has taken
place on the concession subsequent to the last drilling programme conducted
there.



By the end of 2004, market economics had shifted dramatically in favour of
re-evaluating this asset. Accordingly, we began work on an application to the
Thailand authorities to renew the concession on Block B8/38 beyond its scheduled
2005 relinquishment date. The nature and scope of activity on the Block is very
much conditional upon the Group's ability to attract additional participation on
the concession. Currently, the Company is in advanced discussion with multiple
parties regarding the evaluation of the Pornsiri field.






TUNISIA



On 18 November, SOCO announced that it had entered into a sale and purchase
agreement for the sale of its interests in the Zarat Permit in the Gulf of
Gabes, offshore Tunisia. On 3 December, the sale was completed.







Consolidated profit and loss account for the year to 31 December 2004
                                                                                         (Restated)
                                                                             2004              2003
                                                                           £000's            £000's
Turnover
Continuing operations                                                     17,707            19,039
Discontinued operations                                                    7,394             6,451
                                                                          25,101            25,490
Cost of sales                                                            (10,251)          (13,800)

Gross profit                                                              14,850            11,690
Administrative expenses                                                   (2,412)           (2,667)

Operating profit
Continuing operations                                                      7,319             6,066
Discontinued operations                                                    5,119             2,957
                                                                          12,438             9,023

Profit on sale of discontinued operations                                  8,391               -

Profit on ordinary activities before finance charges                      20,829             9,023
Investment income                                                            366               815
Interest payable and similar charges                                        (136)              (37)

Profit on ordinary activities before taxation                             21,059             9,801
Tax on profit on ordinary activities                                      (5,560)           (4,114)

Profit for the financial year                                             15,499             5,687

Earnings per share
Basic                                                                       22.2p              8.2p
Diluted                                                                     19.7p              7.2p

Consolidated statement of total recognised gains and losses for the year to 31 December 2004
                                                                                         (Restated)
                                                                             2004              2003
                                                                           £000's            £000's

Profit for the financial year                                             15,499             5,687
Unrealised currency translation differences                               (9,001)          (14,354)

Total recognised gains (losses) relating to the year                       6,498            (8,667)
Prior year adjustment                                                       (315)              -

Total gains (losses) recognised since last annual report and
accounts
                                                                           6,183            (8,667)





Balance sheets as at 31 December 2004
                                                      Group                         Company
                                                                     (Restated)                     (Restated)
                                                             2004          2003             2004          2003
                                                           £000's        £000's           £000's        £000's

Fixed assets
Intangible assets                                         85,161        82,311                -
                                                                                                   -
Tangible assets                                           13,296        18,973              428            35
Investments                                                                              96,290        72,326
                                                             -               -

                                                          98,457       101,284           96,718        72,361

Current assets
Stocks                                                       106                              -             -
                                                                            40
Debtors                                                    5,959         4,763              445           406
Investments                                                6,569                              -             -
                                                                             -
Cash at bank and in hand                                  30,477        32,898               59           387

                                                          43,111        37,701              504           793

Creditors: Amounts falling due within one

year                                                      (5,547)       (8,586)            (417)         (173)

Net current assets                                        37,564        29,115               87           620

Total assets less current liabilities                    136,021       130,399           96,805        72,981

Provisions for liabilities and charges                    (1,665)       (3,279)               -             -


Net assets                                               134,356       127,120           96,805        72,981

Capital and reserves
Called-up equity share capital                            14,455        14,396           14,455        14,396
Share premium account                                     41,628        41,325           41,628        41,325
Other reserves                                            33,742        33,366             (424)         (424)
Profit and loss account                                   44,531        38,033           41,146        17,684

Equity shareholders' funds                               134,356       127,120           96,805        72,981





Consolidated cash flow statement for the year to 31 December 2004
                                                                                  2004               2003
                                                                                £000's             £000's

Net cash inflow from operating activities                                      14,446             16,610

Returns on investments and servicing of finance
Interest received                                                                 355                677
Interest paid and similar charges                                                 (28)               (17)
                                                                                  327                660

Taxation paid                                                                  (3,311)            (4,169)

Capital expenditure and financial investment
Purchase of intangible fixed assets                                           (11,747)           (21,651)
Purchase of tangible fixed assets                                              (4,352)            (6,116)
Purchase of own shares by employee benefit trust                                  -                 (583)
Purchase of own shares into treasury                                                -               (424)
                                                                              (16,099)           (28,774)

Acquisitions and disposals
Sale of subsidiary undertaking                                                  9,160                  -
Sale of intangible fixed asset                                                  1,181                  -
                                                                               10,341                  -

Cash inflow (outflow) before management of liquid resources and
financing
                                                                                5,704            (15,673)

Management of liquid resources
Increase in funds placed on short term deposit                                 (6,541)               -

Financing
Issue of ordinary share capital                                                   362                862

Decrease in cash in the year                                                     (475)           (14,811)






Notes to the accounts





1.      Basis of accounting



The accounts have been prepared under the historical cost convention and in
accordance with applicable accounting standards and the Statement of Recommended
Practice 'Accounting for Oil and Gas Exploration, Development, Production and
Decommissioning Activities'.  During 2004, the Group adopted UITF Abstract 38
'Accounting for ESOP Trusts' and the related amendments to UITF Abstract 17
(revised 2003) 'Employee Share Schemes'.  UITF Abstract 38 changes the
presentation of own shares held by the SOCO Employee Benefit Trust whereby
consideration paid for shares is deducted in arriving at shareholders' funds
rather than being recognised as an asset.  UITF Abstract 17 (revised 2003)
requires the amounts recognised in the profit and loss account to be based on
fair value of shares at the date an award is made rather than book value of own
shares available for the award.  As the adoption of UITF Abstract 38 and UITF
Abstract 17 (revised 2003) represents a change in accounting policy prior year
amounts have been restated to ensure that they are presented on a consistent
basis.



2.      Basis of preparation





The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2004 or 2003, but is derived
from those accounts. Statutory accounts for 2003 have been delivered to the
Registrar of Companies and those for 2004 will be delivered following the
company's annual general meeting. The auditors have reported on those accounts;
their reports were unqualified and did not contain statements under s237(2) or
(3) Companies Act 1985.





3.      Dividend



The Directors are not recommending the payment of a dividend.




4.      Tax on profit on ordinary activities

Analysis of charge


                                                                                  2004               2003
                                                                                £000's             £000's
Current tax
UK corporation tax at 30% (2003 - 30%)                                              -                  -
Overseas taxation                                                               5,178              4,722
                                                                                5,178              4,722

Adjustments in respect of previous years:
UK corporation tax at 30% (2003 - 30%)                                              -                  -
Overseas taxation                                                                (237)              (201)
                                                                                4,941              4,521

Deferred taxation
Origination and reversal of timing differences                                    619               (407)
                                                                                5,560              4,114



Deferred taxation includes recognition of a net deferred tax charge of £201,000
(2003 credit - £181,000) in respect of the Tunisia interest and a net deferred
tax charge of £439,000 (2003 credit - £126,000) in respect of the Yemen
interest.  There is no unprovided deferred taxation at either balance sheet date
except for an unprovided deferred tax asset arising in respect of tax losses
that are not expected to be utilised.



5.      Prior year adjustment



Effective 1 January 2004, the Group adopted Urgent Issues Task Force ('UITF')
Abstract 38 'Accounting for ESOP Trusts' and the related amendments to UITF
Abstract 17 (revised 2003) 'Employee Share Schemes'.  The adoption of UITF
Abstract 38 and UITF Abstract 17 (revised 2003) represents a change in
accounting policy for the way the Group presents and accounts for own shares
held by the SOCO Employee Benefit Trust.  The comparative figures in the primary
statements and notes have been restated to ensure that they are presented on a
consistent basis.



The net effects of the change in policy are summarised below:


                                                                         2004          2003
                                                                       £000's        £000's

Profit and loss account
Increase in administrative expenses                                       125           150

Balance sheet
Decrease in fixed asset investments                                     1,411         1,486

Decrease in other reserves                                                794         1,171
Decrease in profit and loss account                                       617           315
Decrease in net assets                                                  1,411         1,486






6.      Earnings per share



The calculation of the basic earnings per share is based on the profit for the
financial year and on 69,740,521 (2003 - 69,337,797) ordinary shares, being the
weighted average number of ordinary shares in issue and ranking for dividend
during the year, excluding 2,475,000 (2003 - 2,227,342) ordinary shares of the
Company held by the Group.



The calculation of the diluted earnings per share is based on the profit for the
financial year and on 78,812,689 (2003 - 78,577,437) ordinary shares, being the
weighted average number of ordinary shares in issue and ranking for dividend
during the year including 2,475,000 (2003 - 2,227,342) ordinary shares of the
Company held by the Group and 6,597,168 outstanding share options and warrants
(2003 - 7,012,298) that have a diluting effect on earnings per share.





7.      Reconciliation of movements in Group equity shareholders' funds


                                                                                             (Restated)
                                                                                2004               2003
                                                                              £000's             £000's

Opening equity shareholders' funds (restated)                               127,120            135,210
Profit for the financial year                                                15,499              5,687
Unrealised currency translation differences                                  (9,001)           (14,354)
New shares issued                                                               362                862
Treasury shares purchased                                                          -              (424)

Shares purchased for employee benefit trust                                        -              (583)

Amortisation of employee benefit trust shares                                   376                722
Closing equity shareholders' funds                                          134,356            127,120





The Group's unrealised currency translation differences arise on retranslation
of the balance sheets of overseas operations, which are denominated in US
dollars, at rates ruling as of year end.




8.      Reconciliation of operating profit to operating cash flows


                                                                                      (Restated)
                                                                              2004          2003
                                                                            £000's        £000's

Operating profit                                                           12,438         9,023
Depreciation, depletion and amortisation                                    3,902         4,998
(Increase) decrease in stocks                                                (343)          268
Increase in debtors                                                          (552)         (508)
(Decrease) increase in creditors                                             (999)        2,829
Net cash inflow from operating activities                                  14,446        16,610

Net cash inflow from operating activities comprises:
Continuing operating activities                                             8,933        11,621
Discontinued operating activities                                           5,513         4,989
                                                                           14,446        16,610



9.      Analysis and reconciliation of net funds


                                              As at 1                    Exchange      As at 31
                                             Jan 2004     Cash flow      movement      Dec 2004
                                               £000's        £000's        £000's        £000's

Cash at bank and in hand                       32,898         (475)       (1,946)        30,477
Current asset investments                           -        6,541            28          6,569
Net funds                                      32,898        6,066        (1,918)        37,046





10.  Disposal of Tunisia assets



In December 2004 the Group completed a transaction with an economic effective
date of 1 July 2004 whereby it sold its 100% subsidiary, SOCO Overseas Limited
('SOCO Overseas'), the parent of the wholly owned subsidiary SOCO Tunisia Pty
Limited ('SOCO Tunisia').  SOCO Tunisia directly held the Group's Tunisia
interest in the Zarat Permit offshore Tunisia in the Gulf of Gabes.  PA
Resources AB acquired SOCO Overseas for cash consideration of approximately
£10.7 million after working capital adjustments and post economic date cash flow
adjustments.  The sale resulted in a net cash inflow in 2004 in the amount of
£9.2 million reflecting the £10.7 million cash consideration net of transaction
costs of £0.2 million and the Group's share of cash held by SOCO Tunisia of £1.3
million, and a profit of £8.4 million.  During the financial period up to the
completion date of the sale, the Tunisia interest contributed £5.1 million to
the Group operating profit (2003 - £3.0 million).  Immediately prior to the sale
the Group's share of net assets held by the Tunisia interest was £6.3 million,
including £4.2 million related to post economic date cash flow adjustments.






11.  Sale of OILSOC Investment Company Limited



In March 2004 the Group's 100% owned subsidiary, SOCO North Africa Ltd ('SOCO
North Africa'), and Oilinvest (Netherlands) B.V. ('Oilinvest') completed a
transaction with a subsidiary of Joint Stock Bank of the Gas Industry
Gazprombank ('Gazprombank') whereby Gazprombank acquired the entire issued share
capital of OILSOC Investment Company Limited ('OILSOC'), a company which was
owned by Oilinvest (55%) and SOCO North Africa (45%). OILSOC assets consist
entirely of its 20% shareholding in ODEX Exploration Limited ('ODEX'), a
specific purpose upstream joint venture formed by Oilinvest and SOCO North
Africa. The sale resulted in a net cash inflow in 2004 in the amount of £1.2
million reflecting £1.3 million cash consideration net of the Group's share of
net assets held by OILSOC, which has been recorded against the carrying value of
intangible fixed assets in the balance sheet. Following completion of the
transaction, the ODEX shareholders are Oilinvest (46%), SOCO North Africa (34%)
and Gazprombank via its OILSOC purchase (20%).





12.  Subsequent events



In April 2005 the Group entered into a Sale and Purchase Agreement ('Agreement')
with an economic effective date of 1 January 2005, to sell its 100% owned
subsidiaries SOCO Tamtsag Mongolia, LLC ('SOTAMO') and SOCO Mongolia Ltd ('SOCO
Mongolia') to Daqing Oilfield Limited Company ('Daqing'), a subsidiary of
PetroChina.  Together SOTAMO and SOCO Mongolia hold the Group's Mongolia
interest.  Under the terms of the Agreement, the Group will receive
consideration of up to approximately US$93.0 million comprised of cash
consideration of US$40.0 million plus a subsequent payment based on total crude
oil produced from the Mongolia interest after the effective date in excess of
27.8 million barrels of oil.



The US$40.0 million cash consideration is payable in two tranches, the first
US$30.0 million being payable, subject to normal working capital adjustments,
upon completion. The second tranche of US$10.0 million will be paid into an
escrow account by Daqing upon completion to be released to the Group 18 months
later upon the satisfaction of the condition that no material undisclosed
additional liabilities are discovered.  The remaining consideration is payable
once cumulative production reaches 27.8 million barrels of oil as described
above, at the rate of 20% of the average monthly posted marker price for Daqing
crude multiplied by the aggregate production for that month, up to a total of
approximately US$53.0 million based on the estimated recoverable costs incurred
to 31 December 2004 and expected to be approved by the Mineral Resources and
Petroleum Authority of Mongolia.



For the year ended 31 December 2004, turnover of £1.7 million was attributable
to the Mongolia interest.  As this turnover arose from test production during an
appraisal programme, an amount was charged from appraisal costs to cost of sales
so as to reflect a zero net margin.  As at 31 December 2004, the Group's share
of net assets held by the Mongolia interest was £35.5 million.



13.  Preliminary results announced



Copies of the announcement will be available from the Company's head office, St.
James's House, 23 King Street, London, SW1Y 6QY.  The Annual Report and Accounts
2004 will be posted to shareholders in due course.


                      This information is provided by RNS
            The company news service from the London Stock Exchange