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Soco to Expand Vietnam Field Output 27%, Allowing Dividend

March 11 (Bloomberg) -- Soco International Plc, a U.K. oil explorer focused on Africa and Asia, is seeking to boost pumping capacity at its fields off Vietnam by about 27 percent, allowing it to pay an annual dividend to shareholders from this year.

Soco plans to test production at the Te Giac Trang fields at more than 70,000 barrels of oil a day, Chief Executive Officer Ed Story said. Now, its floating, production, storage and offloading vessel has a 55,000 barrel-a-day designed capacity.

“We have another, maybe, 15,000 barrels a day of production that is limited by that capacity in the vessel,” Story said in a phone interview. “In the course of doing this test, we will determine what the limitations are.”

The London-based company, which today reported record sales for last year of $621.6 million, is studying paying annual dividends this year. It had $320 million in cash on March 8 and plans to secure new projects in West Africa and Vietnam with at least one to be announced this year, Story said.

“We are looking to do an annual distribution going forward depending on the rates of production and cash generated,” he said. “There will be a distribution no matter what.”

Soco rose 1.7 percent to 383.3 pence, the highest in a month, by the close in London.

The explorer will hold about $500 million in cash by the end of the year, estimated Sanjeev Bahl, a London-based analyst at Numis Securities Ltd. This will be “significantly in excess of current asset capital expenditure requirements.”

Increased Reserves

The company plans to drill an appraisal well at TGT H5 block this year, which will possibly allow it to book increased reserves, Story said. Soco in February raised its estimate for the TGT fields’ resources to 958 million barrels of oil in place, up from 466 million barrels, citing data from RPS Energy Consultants Ltd.

“I know we’ve been rather boring because of no exploration wells in the past year, but that would change,” Story said.

Soco plans to drill the Lideka Marine East Well 1 in the Republic of Congo later this year and is examining plans to drill two wells in the Nganzi Block in the Democratic Republic of Congo.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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