SOCO International Launches Bond Offering

SOCO International has launched an offering of US$200 million of Guaranteed Convertible Bonds due 2013 (the "Bonds"). The Bonds, which will be issued by SOCO Finance (Jersey) Limited (the "Issuer"), will be convertible into the preference shares of the issuer which are exchangeable for fully paid ordinary shares of SOCO (the "Offering"). SOCO is acting as guarantor ("Guarantor") for the Offering.

Background to and use of proceeds

SOCO's group focuses on high quality projects in core areas of South East Asia, the Middle East and West Africa where it can use its expertise on projects that offer sufficient potential benefit and large enough participation to have a high impact on the group. The group's strategy is to have oil and gas assets in each phase of the oil and gas cycle – production, development and exploration and as such is raising additional funds to continue its expansion.

The net proceeds from the issue of the Bonds will be on-lent by the Issuer to the Guarantor's group and will be used primarily to fund the group's existing appraisal and development opportunities in Vietnam, to allow the group flexibility to acquire additional acreage in its core areas and for other general corporate purposes.

In 2005 six out of seven wells drilled on the group's oil and gas assets in Yemen and Vietnam were successful. In 2006 SOCO has continued this exploration success with its recently announced TGT-2X and TGT–3X wells in Vietnam testing at 17,500 bopd and 9,908 bopd respectively. The group announced the Declaration of Commerciality for the Ca Ngu Vang field, offshore Vietnam, on April 25, 2006 and a Declaration of Commerciality on the Te Giac Trang field is expected to follow. During 2006 SOCO is expected to commence infrastructure development activities in Vietnam to move the discoveries to production, continue exploration and appraisal drilling in Vietnam and Yemen, progress production enhancement efforts in Yemen and initiate a 3D seismic program in Congo.

Summary of the Bonds

The Bonds will be issued at 100 per cent. of the principal amount and will bear a cash coupon of between 4.5 per cent. and 5.0 per cent. per annum. The conversion price will be set at a premium of between 37 per cent. and 42 per cent. to the volume weighted average price of SOCO's ordinary shares from launch to pricing. The final terms of the Bonds are expected to be announced today. Settlement of the issue is expected to take place on May 16, 2006. Merrill Lynch International is acting as sole bookrunner and lead manager. Bridgewell Group Limited is acting as co-manager.

Application will be made for the Bonds to be admitted to the Official List of the UK Listing Authority and to the London Stock Exchange plc for the Bonds to be admitted to trading on the London Stock Exchange's Professional Securities Market. The Bonds will be offered outside the United States in compliance with Regulation S under the US Securities Act of 1933, as amended. In addition, the Bonds may not be offered to, sold to or purchased or held by, or for the account of, persons resident for income tax purposes in Jersey (other than financial institutions in the normal course of business).

Stabilization/ FSA

Ed Story, President and Chief Executive Officer, commented:

"The group achieved significant success in 2005 and the first quarter of 2006. Following the Declaration of Commerciality on the Ca Ngu Vang field and the exciting drilling results on the Te Giac Trang field offshore Vietnam, SOCO is well placed to move its world class Vietnam assets to production. The group will also continue to expand and develop its portfolio of assets across each phase of the oil and gas cycle".


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