Soco International slides on UBS downgrade

It said that with the stock having rallied strongly over recent days it is now trading at 1.24x commercial net asset value and on an implied long-term oil price of $112 a barrel, which is well above the forward curve at $65 a barrel.

“This leaves risk-reward looking skewed to the downside,” said UBS.

Still, the bank said it has been quite consistent in its view that Soco’s TGT field in Vietnam is a solid asset, adding that delivery of $21 a barrel of post-tax cash flow during the first half underlines its high-margin, low cost attributes.

UBS said that while TGT is a high-quality asset, 2015 is something of a transition year with lower oil prices coinciding with relatively high capex on the new H5 fault platform.

It said free cash flow will likely be relatively low as a result, meaning next year's dividend will be lower.

At 1005 BST, Soco shares were down 3% at 181.25p.