Soco to Boost Vietnam Field Capacity After Record Revenue

Soco International Plc, the U.K. explorer focused on Africa and Asia, is seeking to increase production capacity at its offshore deposits in Vietnam after revenue rose to a record in the first half.

Soco expects daily oil output from the Te Giac Trang fields to reach 55,000 barrels a day for the rest of the year following the connection of the second production platform in July. The floating, production, storage and offloading vessel, or FPSO, was tested at a rate of 60,500 barrels a day last week, London-based Soco said today in a statement.

“Even with that we still haven’t tested the limits of the capacity of the FPSO, we still have extra capacity,” Chief Financial Officer Roger Cagle said in a phone interview. “Typically you are talking anywhere between 10 to 25 percent excess when you get above the nameplate capacity of any vessel,” he said.

First-half revenue jumped 10-fold to $263.2 million in the six months ended June 30 from a year earlier. Soco held $178 million in cash at the end of the reporting period amid plans to drill wells in the Republic of Congo, Vietnam and Angola. The explorer may be able to increase its reserves estimate later in the year following the expansion in Vietnam, Cagle said.

Firmer Valuation

“Delivery of the TGT development and an update on TGT reserve estimates, possibly by year-end, could lead to a firmer valuation for the field and possible divestment of Soco’s Vietnam assets,” Michael Alsford, a London-based analyst at Citigroup Inc., wrote in an e-mailed report. “If a sale is not forthcoming, we expect management to consider further distributions to shareholders in 2013.”

Cagle said the company doesn’t plan to sell its cash-generating project in Vietnam and will possibly consider a special dividend in December.

In the Democratic Republic of Congo, Soco has bought 46.75 percent of Block V from Ophir Energy Plc for $8.7 million, increasing its stake to 85 percent.

In the Republic of Congo, it’s in talks with a potential partner to work at the Marine XIV Block, Cagle said.

Soco fell 5.3 percent to close at 336 pence in London, the biggest decline since April 10. The shares have risen 15 percent

this year.

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