The Group favourably rebalanced its project portfolio and achieved very robust financial results for 2005. The innovative and highly successful convertible bond issue carried out in May enabled the Group to raise US$250 million thus ensuring that SOCO has the financial leverage to develop its high quality asset base.
Operationally SOCO has achieved significant exploration success both in Vietnam and Yemen. In Vietnam, SOCO's success with the drill bit was outstanding, with a string of positive drilling results on both Block 16-1 and Block 09-2, the latter leading the Group and its partners to declare commerciality on the Ca Ngu Vang field. A plan for development is now being progressed with first production being targeted for the second half of 2007.
Following a number of impressive drilling results on the Te Giac Trang field on Block 16-1, the Group believes a Declaration of Commerciality will come in the near future. While the initial well on the Te Giac Vang structure, some 40 kilometers south of the Te Giac Trang discovery, did not lead to a commercial success, the potential of this structure remains significant. Indeed, the potential of the entire clastics fairway, the boundaries of which are still being delineated, is tremendous.
In Yemen three rigs are in place and will continue operating throughout the year. Expansion of facilities and the implementation of a water injection program and further infill drilling in the Kharir field will lead to an uplift in production throughout the year which now stands at approximately 45,000 BOPD versus a 2005 year average of 32,937 BOPD.
Elsewhere, development efforts in Thailand and the commencement of the 3D seismic program in Congo Brazzaville are both expected to get underway in the second half of this year.
In summary, the outlook for SOCO is extremely promising, with production assets to take advantage of the favourable oil price, near term development prospects to add additional reserves and exciting remaining exploration potential.
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