LONDON -- The shares of SOCO International (LSE:SIA) climbed 8 pence to 385 pence during early London trade this morning after the company revealed its annual profits had advanced 134%.
The FTSE 250 oil group confirmed earnings had improved from $89 million to $207 million during 2012. The increase followed the company's first full year of production at its main Te Giac Trang field in Vietnam. Revenue climbed 166% to $626 million while operating cash flow surged 271% to $335 million.
SOCO ended 2012 with net cash of $211 million, up from $114 million, despite spending $95 million buying out a minority interest and $33 million on share buybacks. The firm also claimed its cash pile had gained a further $61 million so far during 2013.
Ed Story, SOCO's chief executive, said:
"The financial and operating results for 2012 demonstrate the transformation of this Company. With the TGT field's average gross production now over 50,000 barrels of oil a day, the record revenues, cash flow and profitability speak for themselves. Moreover, higher rates of production over continued sustained periods support our earlier views of the size of this major oilfield. Further, as we look forward into 2013, SOCO is now poised to take advantage of more substantial future growth opportunities."
Story also expected SOCO to recommend a "sustainable return of capital" to shareholders during 2013, suggesting the firm may declare a long-awaited maiden dividend later this year.
Based on today's results, SOCO's shares are valued at eight times profits adjusted for the group's net cash pile.
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