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Soco International slumps as oil prices and write-off dent profits

Soco International slumps as oil prices and write-off dent profits

Soco International (LON:SIA) shares slumped after writing off US$79.5mln from exploration assets in Vietnam and the Democratic Republic of Congo.

Falling oil prices also put a dent in the group’s financial results.

Oil revenue fell to US$448.2mln in the twelve months to December 31, from US$608.1mln in the prior year. 

Soco made a US$14mln profit after the write-offs, versus a US$104mln profit in 2013.

Production averaged 13,605 barrels oil equivalent for the year, with 11,538 boepd coming from the TGT operation in Vietnam. 

Problems with an offshore well in Vietnam meant a portion of reserves have now been relegated to resources, and caused a US$60mln impairment, while the company has also decided to delay exploration drilling in the DRC until next year.

There was a US$79.5mln write-down of costs associated with the Albertine Graben Block V, in eastern DRC.

Soco ended 2014 with US$166.4mln of cash. Some US$250mln was generated from operations and US$119mln was returned to shareholders during the period (at 22p per share).

And the company intends to pay a US$50mln (10p per share) dividend for the year, which will need approval.

Chief executive Ed Story said: “Notwithstanding the challenging market conditions, given our financial strength and near-term outlook and based on the results of 2014, the board is recommending a cash dividend of 10 pence per share, amounting to c.$50 million.”

In London, SOCO shares fell 70p, 29%, to trade at 171.3p.

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