Operations
Production averaged 13,960 BOEPD in the first half; 2014 full year production guidance remains 14-15,000 BOEPD
TGT 2014 in-fill drilling programme is ongoing with 6 development wells to be drilled in 2014
TGT FPSO total liquids test to 140,000 barrels of liquids completed; the oil production test to above 60,000 BOPD expected in H1 2015
The TGT H5 development is progressing as planned - the H5 wellhead jacket and drilling deck will be installed in Q3 2014 and first oil is on target for September/October 2015
Currently drilling an exploration well on the Marine XI Block, offshore the Republic of Congo (Brazzaville)
Financial
Financial results in the first half in line with the Company's expectations; revenue of $246.4 million (1H 2013: $324.0m) and net profit of $79.8 million (1H 2013: $105.4m) reflecting the TGT FPSO sharing from May 2013
Continued strong cash generation from Vietnam
Strong balance sheet with net cash and liquid investments of $284 million as at 30 June 2014; capex guidance for the full year 2014 at $160-170 million
Proposed cash return of $121 million, or 22 pence per share, representing c. 60% of free cash flow for 2013
Ed Story, Chief Executive Officer, commented:
"Our focus this year has been on delivering steady progress on the TGT field which continues to perform as expected. The 2014 TGT in-fill development drilling programme is underway with three wells drilled to date. The H5 development project is progressing according to plan targeting first oil in just a little over a year. Our exciting two-well exploration programme offshore the Republic of Congo is underway with the first well in the programme, the Lidongo X Marine-101, currently being drilled.
Our revenue and cash flows in the first half continued to be strong. We are pleased to recommend a return of 22 pence per share to shareholders. With continued strong cash generation and a solid balance sheet, SOCO is well positioned to fund its development and exploration programme and to continue the strategy of targeting half of free cash flow to return to shareholder
