Soco International opts to impair $220m of charges from non-core African assets

Oil and gas exploration and production group Soco International, which had been in merger talks with Kuwait Energy for some time, announced on Wednesday that production from its Vietnamese operations remained in line with guidance.

Soco also said that, following strategic review, it had decided to impair $220m for non-core African assets, Marine XI off the coast of the Republic of Congo and Cabinda North in Angola.

The firm estimated production across 2018 to be between 8,000 and 9,000 barrels of oil per day net, and that capital expenditure for its Vietnam operations would be in the realm of $4m over the year.

Throughout 2017, Soco recorded average gross production of 28,506 barrels of oil per day, 8,276 of which was netted by the company.

Soco posted revenues of $156m for the year and achieved an average realised oil price per barrel of $56, a premium of $2 per barrel to the Brent North Sea oil benchmark price.

The firm's final capital expenditure forecast for the year remained unchanged at around $30m, all of which was fully funded from existing cash resources.

Ed Story, president and chief executive officer, said "Steady revenues, low operating costs and a disciplined approach to capital allocation have provided the Company with a unique financial stability from which it has delivered a $30.0m capital expenditure programme in 2017, fully funded from existing cash resources, which included the full $42.7m Mongolia payable, which we collected during the year."

"In addition, the company has distributed a $21.0m cash return to shareholders though a £0.05 dividend and has embarked on a rigorous pursuit of portfolio rationalisation and business development opportunities," he added.

The group was expected to release its full financials for the year ended 31 December on 22 March.

As of 1200 GMT, shares had slipped 2.47% to 124.84p.