Soco cuts output forecasts for 2015

OREANDA-NEWS. London-listed independent Soco International has cut its expected production levels for this year, the result of lower oil prices and a reduced drilling programme at the Te Giac Trang (TGT) field offshore Vietnam.

But Soco says its breakeven oil price is in a low \$20/bl range and its capital expenditure programme is fully funded, so is well suited to weather a period of lower oil prices. It also highlighted its commitment to growth, including possible acquisitions, "if the right opportunity comes along".

Production last year was 13,600 b/d of oil equivalent (boe/d), in line with the [recently-amended forecast]( http://direct.argusmedia.com/newsandanalysis/article/947390), with 2015 output pegged at 10,500-12,000 boe/d. Soco's production up to 27 January is 12,900 boe/d.

Soco — which is debt free and has a cash balance of \$185mn as of yesterday — reported an average realised oil price of \$103/bl last year, a premium of \$4/bl to Brent, although it said the premium will fall this year.

Capital expenditure will fall to \$90mn this year — from \$161mn last year — with \$70mn allocated for Vietnam and the rest for operations in Africa. There is a contingent budget of \$25mn available for additional well drilling in Vietnam should approval be granted.

Production from the TGT field averaged around 38,400 boe/d, with 11,500 boe/d net to Soco. The number of wells planned for this year at TGT is five to six, including three at the H5 platform. The floating, production, storage and offloading vessel's oil capacity for TGT is 55,000 b/d.

"The TGT field's low-cost, high-margin production, with under-utilised producing capacity, positions it well as a swing producer as overall Vietnam production plans are optimised," Soco said.

First oil at the TGT H5 platform is on target for September-October this year, which Soco previously said would boost production capacity by 15,000-25,000 b/d.