Interim Management Statement

RNS Number : 1462H

Soco International PLC

15 May 2014

 

Thursday 15 May 2014

SOCO International plc

("SOCO" or the "Company")

INTERIM MANAGEMENT STATEMENT

SOCO, an international oil and gas exploration and production company, today announces its Interim Management Statement relating to the period from 1 January 2014 to 14 May 2014.

HIGHLIGHTS

·     Production net to SOCO's working interest averaged 14,090 BOEPD for the four months to 30 April 2014, in line with the Company's expectations

·     TGT 2014 in-fill drilling programme underway, with the first development well TGT-18P reaching target depth

·     Preparation of the H5 development plan progressing as planned; contracts for the wellhead platform awarded and construction of the jacket commenced

·     Drilling of the Litchendjili extension on the Marine XI, Republic of Congo (Brazzaville) block planned for late Q2/early Q3

·     Net cash and liquid investments as at 14 May 2014 were approximately $270 million

OPERATIONS

Vietnam

Block 16-1 - Te Giac Trang ("TGT) Field

The TGT field is currently producing from 16 producing wells from two unmanned platforms. The field continues to perform in line with expectations. Production averaged 40,314 barrels of oil equivalent per day ("BOEPD") through the first four months of the year, 12,071 BOEPD net to SOCO, in line with TGT's current share of the FPSO nameplate capacity.  TGT crude sales currently realise a premium of above $4 per barrel to the Brent benchmark crude price.

Drilling of the 2014 in-fill development programme at the TGT field has commenced. The first development well TGT-18P reached the target depth of 3,742 metres on 11 May 2014 and logging of the well is underway.  The well was first spudded in early March by the Hercules Resilience rig, but was suspended following various mechanical complications. Drilling of the well was completed by the Ensco 109 rig which arrived on location in late April.

The TGT partners have been focused on achieving approval for the H5 development.  The Hydrocarbons Initially In Place/Reserve Assessment Report ("RAR") has been completed and approved for submission to the authorities. Preparation of the Outline Development Plan documentation has commenced. Contracts for the purchase of steel, long lead items and for the design and construction of the wellhead platform have been awarded. Construction of the jacket has commenced and final negotiations are ongoing to formalise the remaining required contracts.

Block 9-2 - Ca Ngu Vang Field ("CNV")

Production from CNV averaged 2,019 BOEPD net to the Company's working interest during the first four months of the year. Preparation for drilling the CNV-7P well in the south-west area of the field commenced in the first quarter of 2014. The well is being drilled by the Naga 2 rig and is expected to enable production levels to be increased. The top hole section of the well has been completed and the well is currently drilling at approximately 3,600 metres measured depth.

Republic of Congo (Brazzaville)

Marine XI : Litchendjili Extension

Technical work is ongoing in preparation for drilling to test the extension into SOCO's Marine XI block of the Litchendjili oil and gas discovery on the ENI operated Marine XII block. Offset well data is currently being reviewed and the seismic volume is being updated to refine the well location.  Negotiations have begun to contract a rig to drill the Litchendjili LXM-101 well with the expectation of commencing drilling in late June/early July.

Nanga IIA

Reprocessing of the remaining previously acquired seismic data is ongoing and is expected to be completed in the second quarter of 2014. We have received approval from the Congolese Ministry of Hydrocarbons for an extension to the Prospection Authorisation through mid-October 2014.

Mer Profonde Sud ("MPS") permit

Following the Company acquiring a 60% working interest in the MPS Block, offshore Congo (Brazzaville), the transaction has received government approval but remains subject to regulatory approval to enter into the third and final period of the licence. Subsequent to obtaining the necessary approvals, which include a clear defining of the block boundary, the partners would look to drill by early 2015. A detailed well location study is currently underway and is expected to be completed in June/July.

Democratic Republic of Congo (Kinshasa) ("DRC")

Block V

After receiving approval in late 2013 from DRC Ministry of the Environment and ICCN, which is the Park Warden's organisation responsible for managing the Virunga National Park, preparation was carried out during the period to commence a lake bed seismic survey on Lake Edward.  The survey is currently ongoing and is expected to be completed this quarter.

The seismic survey represents the Company's final operational activity onsite Block V under its current work programme.  No drilling has been planned or is warranted at this stage.

CORPORATE

In April, SOCO announced that Anya Weaving would join the Company as Chief Financial Officer with effect from 1 May 2014. Anya joins SOCO from Bank of America Merrill Lynch where she was a Managing Director in Mergers and Acquisitions with responsibility for the oil and gas sector.

OUTLOOK

The TGT field continues to perform in line with the Company's expectations. The 2014 TGT in-fill development drilling programme is underway and the TGT field partners are working towards sanctioning the H5 development. The Company is preparing for an exciting exploration programme with two wells planned offshore the Republic of Congo.

By continuing its disciplined approach to the allocation of capital, the Company is comfortably positioned to fund its ongoing development programme, to retain exposure to a high potential exploration campaign and to continue an annual return of cash to shareholders.

15 May 2013

ENQUIRIES:

SOCO International plc

Anya Weaving, Chief Financial Officer

Tel: [phone]

Bell Pottinger

Rollo Crichton-Stuart

Elizabeth Snow

Tel: [phone]

NOTES TO EDITORS:

SOCO is an international oil and gas exploration and production company, headquartered in London, traded on the London Stock Exchange and a constituent of the FTSE 250 Index. The Company has interests in Vietnam, the Republic of Congo (Brazzaville), the Democratic Republic of Congo (Kinshasa) and Angola, with production operations in Vietnam.

SOCO holds its interests in Vietnam, all in the Cuu Long Basin offshore, through its wholly-owned subsidiaries, SOCO Vietnam Ltd and OPECO Vietnam Limited. SOCO Vietnam Ltd holds a 25% working interest in Block 9-2, which is operated by the Hoan Vu Joint Operating Company and holds a 28.5% working interest in Block 16-1, which is operated by the Hoang Long Joint Operating Company. OPECO Vietnam Limited holds a 2% interest in Block 16-1.

SOCO holds its interests in the Marine XI and the Nanga II A Blocks in the Republic of Congo (Brazzaville) through its 85% owned subsidiary, SOCO Exploration and Production Congo SA ("SOCO EPC"). SOCO EPC holds a 40.39% interest in the Marine XI Block located offshore in the shallow water Lower Congo Basin and is designated operator of the Block. SOCO EPC also holds a 100% interest in a one-year exploration licence over the Nanga II A Block, located onshore, adjacent to the coast.

SOCO hold its 60% working interest in the Mer Profonde Sud permit, offshore the Republic of Congo (Brazzaville) through its wholly owned subsidiary, SOCO Congo BEX Limited.

SOCO holds its interests in the Democratic Republic of Congo (Kinshasa), all onshore, though its 85% owned subsidiary, SOCO Exploration and Production DRC Sprl ("SOCO E&P DRC"). SOCO E&P DRC holds an 85% working interest and is the designated operator in Block V, situated in the southern Albertine Graben in eastern DRC.

SOCO holds its interests in the Angolan enclave of Cabinda through its 80% owned subsidiary, SOCO Cabinda Limited, which holds a 17% participating interest in the Production Sharing Agreement for the Cabinda Onshore North Block.

 

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