5th Mar 2014 08:38
LONDON (Alliance News) - SOCO International PLC Wednesday said its pretax profit fell significantly in its full year 2013 on lower revenues and exploration write-off costs, but the company is confident of strong future progress.
The major oil-and-gas exploration-and-production company said its pretax profit fell 25% to USD333.3 million from USD445.6 million the previous year as revenues fell 2.2% to USD608.1 million from USD621.6 million in 2012.
The company said its revenues were down due to both lower product prices and production curtailment from its largest producing asset, the Te Giac Trang field in Vietnam, as capacity at its Floating Production Storage and Offloading facility was reduced by up to 15,000 barrels of oil equivalent per day when a contiguous field commenced production into the same vessel in May.
SOCO also posted an exploration write-off cost of USD92.0 million as the company's Nganzi Licence in the Democratic Republic Of Congo expired in 2013, and partners at the site decided not to extend the exploration period.
In November, the company announced that its production guidance for the year remains on track for 16,000 barrels of oil equivalent per day, with the vast majority coming from the company's TGT field in the South China Sea.
On Wednesday, the company said it surpassed its guidance by 4%, achieving 16,694 barrels of oil equivalent per day as production averages from the Ca Ngu Vang field increased 25% during the period and production averages from TGT increased 16% in 2013 despite the FPSO reduction and deferral of the company's 2013 development drilling programme at the site.
SOCO said it is targeting two potentially high impact exploration wells in 2014, at its Congo Brazzaville-Litchendjili Extension and Mer Profunde Sud Block, and plans to fast-track its hugely successful TGT H5 development so that first oil is expected in 2015.
The company said that its future looks extremely bright, it expects to sustain value creation in the coming years, and it plans a return of capital to shareholders in 2014. Using previous guidance of returning 50% of 2013 free cash flow, the sum would be roughly USD100 million.
At the open Wednesday, SOCO shares are down 5.6% at 438.60 pence.
By Tom McIvor; [email protected]; @TomMcIvor1
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