28/08/2008
Oil and gas group SOCO International made an interim $394 million (£215 million) pre-tax profit after selling its Yemen operations for $465 million.
The fully listed company, with interests in Africa and South East Asia, incurred a $605,000 loss on continuing operations in the six months to June, after investment revenue of $2.7 million.
But the picture was transformed by the sale of its stake in Block 10 of Yemen’s East Shabwa Development Area and SOCO, whose 40 per cent-owned Bualuang oil field in the Gulf of Thailand has newly started to produce crude, ended the half year with $410 million cash.
During the first six months the company started to produce crude oil and wet gas from its CNV field in Vietnam, where it also completed two appraisal wells in the TGT field and initial exploration drilling on prospect ‘E’ in the TGD field.
SOCO, which increased capital expenditure 53 percent to $120.7 million, pursued its exploration programme in West Africa, where it hopes to start drilling in the first half of next year.
Chief executive officer Ed Story says the Yemen cash provides the company with financial flexibility as it drives its operations forward. He trumpets SOCO’s combination of ‘near-term production cash flow increases, medium-term development projects and reserves upside potential’.
SOCO shares, highlighted by Growth Company Investor at 128.5p seven years ago and at 756p in 2005, hit £23.95p a year ago before almost halving to £12.80p. They have now managed a bounce to £14.24p, valuing the company at £1 billion, where their appeal is speculative.
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