Operational Highlights
Annual production net to the Group's working interest averaged 13,605 BOEPD (2013: 16,694 BOEPD)
TGT production net to the Group's working interest averaged 11,538 BOEPD
TGT H5 development ahead of schedule for first oil targeted in September/October 2015
ERC Equipoise study of TGT field completed demonstrating TGT's full potential
Against a background of lower oil prices and resultant uncertainty around the scope and timing of future development, a prudent approach to reserve booking has reclassified a portion of reserves into Contingent Resources
2014 year-end Group 2P reserves of 40.8 mmboe and 2C Contingent Resources of 38.9 mmboe
Financial Highlights
Revenue of $448.2 million (2013: $608.1 million)
Profit after tax of $14.0 million (2013: $104.1 million) after non-cash $79.5 million of exploration write-offs and $60.5 million impairment of CNV
Cash generated from operations of $251.2 million (2013: $314.4 million)
Returned c.$119 million in cash to shareholders, or 22 pence per share, in October 2014
Strong balance sheet: no debt and a cash balance (including cash equivalents and liquid investments) at 31 December 2014 of $166.4 million (2013: $210 million)
Corporate Highlights
Appointment of Anya Weaving as Chief Financial Officer in May 2014
Exemplary health and safety record maintained
Outlook for 2015
Operational focus on bringing TGT's H5 fault block production on line and working with TGT partners to submit updated FDP in Q3
Production guidance maintained at 10.5-12 KBOEPD reflecting reduced scope of TGT drilling
Sufficient cash flow and cash balances to meet ongoing capital expenditure
Balance sheet capacity to take advantage of opportunities in the market as they arise
Recommended dividend of 10p per share (c.$50 million) to be approved at the AGM
Ongoing focus on sustainable cash flow generation and commitment to strategy of cash returns
Ed Story, President and Chief Executive Officer of SOCO, commented:
"2014 was a strong year for SOCO. We concluded an independent study confirming TGT's full potential and also progressed development with the TGT H5 discovery remaining on a fast track for first production in Q3 2015. We also delivered a second material cash return to shareholders of c. $119 million. 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.
We are committed to evaluating every alternative to optimise our exposure to upside without jeopardising our focus on sustainable cash generation. We remain value driven, see the current environment as an opportunity to plan for future growth and believe SOCO is well positioned to continue to execute its strategy."
