Those of us who have followed SIA for a long time are probably a little disappointed, even EE has admitted as much on the other place, but ..
the market may not share our disappointment. In particular the Company should have removed lingering doubts about the capacity of TGT which it is now admitted has been held back not because of geology but differences with the partners over timing.
Our largest exploration and development project evolved into a successful cash generating asset almost exactly according to plan. The field has now demonstrated performance in excess of 40,000 barrels of oil per day (BOPD) with no significant impact on the main reservoir performance parameters. Although there remain alignment issues with Petrovietnam over the rapidity of raising production levels, the evidence from the field is compelling in support of that agreed by all partners in the Government approved Field Development Plan. Accordingly, we are confident that full Partner concurrence of a field production rate of at least 55,000 BOPD will be achieved by Q3 2012.
TGT is a highly complex field with three main reservoir horizons-the upper and lower Miocene 5.2 and the Oligocene "C"-with approximately 55 individual producing intervals. Well performance to-date has demonstrated the ability of all wells to produce oil at high rates with minimal drawdown and field productivity from the reservoir intervals perforated to date has met or exceeded pre-development model prognoses. Stable flowing pressures of the initial producers indicate a strong level of aquifer pressure support, importantly deferring the need for water injection. Similarly, initial interference tests confirm a high degree of connectivity within the main sands. Clearly we need information from more than the seven intervals that have been perforated to date in the eight producing wells in order to obtain the information necessary to establish the most efficient and effective way to fully exploit the field. Thus, 2012 will be about accelerating the programme in step changes in order to establish the most efficient rates at which to drain the field.
So also the comment by Fox Davies is encouraging and slightly surprising:
A New E&P Company Emerges. ? Management has announced its results for 2011, disclosing that net income rose to $89mm principally on the back of 4x increase in revenues to $234mm; 2011 net entitlements averaged 5.4m boepd. More importantly, the Company reported strong on the back of much higher revenues of $90mm, which will provide sufficient firepower for its 2012 exploration programme. Today?s announcement migrates SOCO away from being an explorer to being a fully-fledged, sustainable E&P company ..