SOCO International plc ("SOCO" or "the Company")

SOCO is an international oil and gas exploration and production company, headquartered in London, traded on the London Stock Exchange and a constituent of the FTSE 250 Index. The Company has interests in Vietnam, Thailand, the Republic of Congo (Brazzaville), the Democratic Republic of Congo (Kinshasa) and Angola.

The Company today announces its preliminary results for the year ended 31 December 2008.

2008 HIGHLIGHTS

FINANCIAL

  • Fully funded with year end cash balance of $303.4 million [2007 - $68.3 million]

  • Record after tax profit of $411.1 million [2007 - $32.3 million]
    • Record profit of $54.4 million pre Yemen gain on disposal of $356.7 million



OPERATIONAL

South East Asia

  • Commenced production operations in Vietnam and Thailand
    • Production from continuing operations, averaged over the period since start up, was 6,415 barrels of oil per day

  • Continued Vietnam drilling success with TGT-6X and TGT-7X wells delivering strong results
    • TGT Field Development plan now at final stage of Government approval
  • TGD Prospect "E" discovery confirmed hydrocarbon system indicating new area for high impact appraisal
    • High pressure/high temperature (HPHT) appraisal area now awaiting Government approval



Africa

  • Acquired our first seismic programme in the Democratic Republic of Congo (Kinshasa)

  • Completed 3D seismic interpretation offshore the Republic of Congo (Brazzaville) as precursor to commencing exploration drilling in 2009

  • Expanded the Africa portfolio through two additional blocks



CORPORATE

  • Completed sale of Yemen assets for approximately $465 million



OUTLOOK

  • Ramping up production in both Vietnam and Thailand

  • Expect to accelerate development programme on TGT for first oil in mid-2011

  • Preparing for appraisal drilling in the HPHT area in Vietnam next year

  • Commencing exploration drilling programme in Africa



Ed Story, President and Chief Executive of SOCO, commented:

"We close 2008 with the strongest balance sheet in our history and expect to ramp up to our highest production level ever during 2009. It's hard to imagine being better positioned to weather the world financial crisis. We are confident in the sustainability of our business model as we begin exploration drilling in Africa this year and progress development and appraisal programmes in Vietnam."

10 March 2009



ENQUIRIES

SOCO International plc
Roger Cagle, Executive VP, Deputy CEO and Chief Financial Officer
Tel: 020 7747 2000

Pelham PR
James Henderson
Mark Antelme
Tel: 020 7337 1500

CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT

SOCO closes out one of the most tumultuous years ever in this industry with the strongest balance sheet in the Company's history and began ramping up to the highest production rate in years. During the year we demonstrated our ability to bring a major project on stream, essentially on time and on budget, during a period of high material costs and scarcity of qualified contractors. With further work to be done, we have what could become one of our most significant exploration discoveries. In line with our business strategy, value was realised from our mature asset in Yemen in order to provide funds for reinvestment in areas with material upside that promise the potential to further add significant shareholder value.

Our business model is about progressive sustainability as we aim to refresh our asset portfolio by replacing disposals with potentially high impact new projects. Although Vietnam assets are already in the portfolio, the high pressure/high temperature (HPHT) area in Block 16-1 where we had the discovery with the Te Giac Den 1X side track (TGD-1XST1) well represents an exciting new area for appraisal. We added to our growing presence in West and Central Africa by farming into a prospective block adjacent to our Marine XI Block offshore the Republic of Congo (Congo Brazzaville) and by signing a production sharing agreement on a block in the Democratic Republic of Congo (DRC) in the highly prospective Albertine Graben where other industry participants have announced several significant discoveries in the basin on the Uganda side of the border. We also have a memorandum of understanding on a very large interior block in the DRC.

Adding or replacing components of the asset portfolio are only meaningful if this leads to value creation. Bringing two projects into production in South East Asia and clearing the initial hurdle in embarking into the development of what has been the Company's largest field discovery in its history indicates that we can progress the impressive asset portfolio that we have built.

FINANCIAL AND OPERATING RESULTS

Three items dominate the Company's results for 2008. The completion of the sale of SOCO's Yemen interest in April contributed $356.7 million to 2008 earnings along with $36.4 million of operating profit through to April and provided $438.5 million cash inflow from the transaction. In July, the Company announced the commencement of production operations at the Ca Ngu Vang (CNV) field on Block 9-2 in Vietnam. This was followed by the commencement of production from the Bualuang development in Thailand in August. All three events underpin the Group's strong balance sheet and financial position to ensure that it can meet its future development and exploration goals. After tax profit from continuing operations was $30.6 million from just four and five months of producing operations from the Group's Thailand and Vietnam assets, respectively, representing a significant addition to earnings. Production from continuing operations, averaged over the period since start up, was 6,415 barrels of oil per day (BOPD).

2008 was an extremely active year for the Group. Continuous drilling in Vietnam; construction of development facilities on the CNV field in Vietnam and the Bualuang field in Thailand; and pre-drill exploration activity in the DRC and Congo Brazzaville meant that the Group's capital expenditures reached a record $217.6 million (2007 - $178.6 million). The Company not only funded its commitments through the funds raised on the disposal of its Yemen asset, operating cash flows of $45.1 million (2007 - $49.0 million) and with the remainder of proceeds from the convertible bonds issued in 2006, but ended the year with its highest ever cash balance of $303.4 million (2007 - $68.3 million). This ensures that the Company is well placed to progress its existing exploration and development opportunities and to consider other opportunities that may arise.

The Directors do not recommend the payment of a dividend as the reinvestment of cash will be utilised to fund our ongoing exploration and development activities.

2008 OPERATIONS REVIEW

VIETNAM

Block 16-1

To date, seven exploration/appraisal wells have been drilled in the Te Giac Trang (TGT) field, with an average oil and gas flow of approximately 11,300 BOPD from each well. The TGT field reserve assessment report (RAR) received approval from the Vietnam Government in April 2008 and the field subsequently received a Declaration of Commerciality under the Petroleum Contract. The Outline Development Plan was approved by the national oil company, Petrovietnam, in September. The TGT Field Development Plan is anticipated to be submitted for approval by the Vietnam Government in the first quarter of 2009.

During the year, two appraisal wells were drilled. In June, the TGT-6X appraisal well was drilled on the H4 fault block as a down dip test to the TGT-3X exploration well. Two drill stem tests (DSTs) flowed at a combined maximum rate of 14,490 BOPD of 39 degree API gravity crude oil. The TGT-7X appraisal well on a previously untested fault block, designated H3N, within the TGT field, was spud in July. The well flowed at a combined maximum rate of approximately 8,100 BOPD from two DSTs.

The addition of a productive interval discovered by the TGT-6X, combined with the success on the previously untested fault block penetrated by TGT-7X, adds confidence to our recoverable crude oil range estimates for this field. Moreover, six wells over a 15 kilometre structure testing a total of 60,000 BOPD provides comfort relative to an expected full field production outlook in excess of 100,000 BOPD with first phase production targeted for mid-2011.

The Outline Development Plan for the TGT field was submitted early in the second quarter of 2008. In August, the shareholders of the Hoang Long Joint Operating Company (HLJOC) unanimously approved the Declaration of Commerciality for the TGT field. The final approval by the Government of Vietnam is now anticipated in the first half of 2009.

Concurrent with moving toward the development of TGT, exploration drilling continued on the Block when in January 2008, the Company received formal notification that the Prime Minister of The Socialist Republic of Vietnam had granted the extension of the deadline of the HLJOC's obligation of surrendering the remainder of the Block 16-1 Contract Area until 6 June 2008. This extension was granted to allow the completion of the previously agreed active work programme.

The HLJOC gave notice in June of a discovery at the TGD-1XST1 following completion of the first DST from the prospect "E" well. Although significant downhole damage sustained during drilling and preparations for completion precluded recording meaningful sustained flow rates, the test flowed gas and condensate to surface. The second DST recovered black oil, condensate and gas, indicating the presence of oil with similar qualities to that of the CNV field. The test was hampered by apparent limitations of the perforations, which had to penetrate two casing strings and associated cementing. Additionally, operational issues during both the drilling and testing of the well impacted on its ability to flow and accordingly there are no meaningful sustainable flow rates from either test.

The main objective of TGD-1XST1 was to identify the presence of a working hydrocarbon system. This was achieved confirming a high pressure environment necessary to recover hydrocarbons at these extended depths.

Based on the TGD-1XST1 discovery and a previous discovery at the Voi Trang (VT) prospect, Petrovietnam approved the application for two appraisal areas within Block 16-1 in January 2009. The TGD appraisal area encompasses an area of 150 square kilometres including prospect "E" and the analogous "E" South Prospect. This area borders the southern boundary of the TGT field. The VT appraisal area, the award of which is conditional upon a successful RAR of the commerciality of the previous discoveries in the awarded area, encompasses the VT discovery and several adjacent leads, and covers an area of approximately 100 square kilometres.

HLJOC has submitted the requisite documentation to the Government of Vietnam for formal approval. Upon receiving final governmental approval of the appraisal areas, which is expected in the first quarter of 2009, work will commence immediately to reprocess the 3D seismic over the TGD appraisal area in anticipation of drilling a well in 2010. The RAR on the VT appraisal area is anticipated to be complete by the end of the second quarter of 2009.

Block 9-2

The first flow of crude oil and wet gas from the CNV field occurred on 25 July 2008. It was developed as an unmanned platform tied back to the Bach Ho facilities and was the first project in Vietnam to utilise the existing facilities of Bach Ho in order to maximise the life of existing infrastructure and minimise the investment costs. Five development wells have been drilled in the field and a sixth is drilling as at the time of this report. The Hoan Vu Joint Operating Company (HVJOC) is evaluating the necessity for additional development wells in the fractured Basement reservoir. The field is expected to be in production for the next 20 years. Oil production is expected to be between 10,000 to 20,000 BOPD and wet gas production to be between 25 and 50 million cubic feet per day. The HVJOC has signed a provisional gas contract, with final pricing to be determined by an independent expert during 2009 and applied retroactively to the start of production.

THAILAND

First production of crude oil from the Bualuang oil field in Block B8/38, in the Gulf of Thailand, occurred on 27 August 2008. Following the successful hook up and commissioning of the floating production storage and offloading vessel, production from the field began from well BA-05. After a period of multi-rate testing of this well, the other producers were brought on-stream sequentially over the subsequent days. In total, six development wells have been drilled on the field, five producers and one water injector.

REPUBLIC OF CONGO (BRAZZAVILLE)

In March 2008, SOCO Exploration and Production Congo SA (SOCO EPC) entered into an agreement to farm-out 8.5% of its interest in the offshore Marine XI Block to Petrovietnam, subject to approval of the appropriate regulatory authorities of the Government of Congo Brazzaville. SOCO EPC will remain as the operator with a 29% working interest in the Block. SOCO EPC is finalising the terms of a rig contract for a two well drilling programme in the Marine XI Block that is expected to commence in the third quarter of 2009.

In September, SOCO EPC entered into a farm-in agreement to acquire a 29.4% working interest in the Marine XIV Block, which received regulatory approval from the Government of Congo Brazzaville in March 2009. The Marine XIV Block, which will also be operated by SOCO EPC, is located in the Lower Congo Basin in shallow water, adjacent to the Company's Marine XI Block, and will complement SOCO's activity both operationally and technically. The Block comprises three discontinuous sections located in water depths ranging up to 115 metres and covers approximately 265 square kilometres. Previous exploration activity on the Block has resulted in oil discoveries. A multi azimuth 3D seismic acquisition programme is currently underway.

DEMOCRATIC REPUBLIC OF CONGO (KINSHASA) (DRC)

In March 2008, SOCO Exploration and Production DRC Sprl (SOCO E&P DRC) entered into a new production sharing contract (PSC) with the Government of the DRC, Dominion Petroleum Limited (Dominion) and Cohydro, to acquire exclusive rights for hydrocarbon exploration on Block 5, located in the southern Albertine Graben in eastern DRC adjacent to the border with Uganda where there have been recent discoveries in the same basin. The Block has an area of 7,105 square kilometres, including part of Lake Edward. SOCO E&P DRC holds a 38.25% participating interest in the PSC.

In April our PSC over the Nganzi Block, onshore DRC, received a Presidential Decree thus passing the final regulatory hurdle before becoming effective. Confirmation of our first PSC in the DRC is a very important first step to commencing a full scale exploration programme in the country. Acquisition of a 360 kilometre 2D seismic programme was completed during the year, and processing is underway.

ANGOLA

Activity on the Cabinda Onshore North Block, in which SOCO Cabinda Limited holds a 17% participating interest, had been suspended pending review of the security situation. The seismic acquisition programme is now expected to commence in the second quarter of 2009 with approximately 1,300 kilometres of 2D and 100 square kilometres of 3D seismic planned.

CORPORATE

Disposal of Yemen interests

The Company completed the sale in April 2008 of its interest in the East Shabwa Development Area to Sinochem Petroleum Limited for approximately $465 million. The proceeds from the disposal have strengthened the Company's balance sheet and provide funding for its existing exploration and development projects and other opportunities that may arise. Details of the disposal can be found in Note 5 of the financial information below.

The Board

John Snyder has officially notified the Board that he will retire at the upcoming Annual General Meeting from his role as a Non-Executive Director. John was instrumental in the formation and listing of SOCO and has been a valuable contributor to the Board and its Committees as an independent Non-Executive Director since his appointment in 1997.

OUTLOOK

2009 is set to be another significant year on a number of fronts. First and foremost, the development programme at TGT will gather momentum as it progresses toward first oil targeted for mid-2011. Concurrently in Vietnam, work will commence immediately on TGD to reprocess the 3D seismic over the appraisal area in anticipation of drilling a well in 2010.

In Africa, we will start a multi-well exploration and appraisal programme on Marine XI offshore Congo Brazzaville and possibly be ready to drill the first well on the onshore DRC Nganzi Block. We also expect to conduct the largest 2D seismic survey in the Company's history in the Cabinda North Block. Preliminary exploratory activities will commence on the new licences in Marine XIV in the first quarter of 2009 and the Albertine Graben following the award of the Presidential Decree.

SOCO's track record of delivering projects from inception through the exploration and development phases to first oil has clearly been established. Our strong partnerships within Vietnam have enabled our ambitions for the CNV field to be realised and we now look forward to continue to establish similar relationships in the Africa Region and to targeting further exploration and development success, in both Vietnam and Africa.

We have never been stronger financially and never had a more prospective portfolio. We have delivered on our promises in the past and fully expect to do so again in 2009. We trust your patience will be well rewarded as the industry rebounds and the resilience of our Company is demonstrated.




Rui de Sousa Ed Story
Chairman President and Chief Executive

REVIEW OF OPERATIONS

Several significant milestones were reached during 2008 that advanced SOCO's projects. Oilfields in both Thailand and Vietnam commenced first production. A Declaration of Commerciality was approved at the Company's largest field discovery to date. Two appraisal areas were approved by the national oil company in Vietnam, one of which has the potential to equal our success to date in this country. Pre-drilling work has us poised to begin drilling in Africa this year. Additionally, new projects were added to the portfolio that will allow us to potentially realise even more value in the future.

During January 2009 production net to the Company's working interest averaged 3,724 barrels of oil equivalent per day (BOEPD) and 2,874 barrels of oil per day (BOPD) from the Ca Ngu Vang field offshore Vietnam and the Bualuang field offshore Thailand, respectively. During the cost recoupment phase of the Ca Ngu Vang field, entitlements production is considerably higher than our 25% working interest.

VIETNAM

SOCO holds its interests in the Cuu Long Basin through its 80% owned subsidiary SOCO Vietnam Ltd (SOCO Vietnam) and through its 100% ownership of OPECO, Inc. SOCO Vietnam holds a 25% working interest in Block 9-2, which is operated by the Hoan Vu Joint Operating Company (HVJOC) and holds a 28.5% working interest in Block 16-1, which is operated by the Hoang Long Joint Operating Company (HLJOC). OPECO, Inc. holds a 2% working interest in Block 16-1.

The Cuu Long Basin is a shallow water, near shore, oil rich basin defined by several high profile producing oil fields, the largest of which has been the Bach Ho field, which lies between Block 9-2 and Block 16-1. Bach Ho has produced more than one billion barrels of oil to date.

BLOCK 9-2

Ca Ngu Vang (CNV)

As all remaining acreage has been relinquished, activity during 2008 on Block 9-2 focussed on the development of the CNV field, which came on stream in July. Since that time, additional development drilling has been taking place concurrent with production. Development drilling began in the prior year with the first production well, the CNV-1PST reaching total depth on the last day of 2007. In the subsequent abbreviated test, carried out in the first quarter of 2008, the well tested at approximately 10,000 barrels of liquid per day with a 30% water cut.

Between February and May, a further development well was drilled but suspended pending installation of the unmanned platform. A high sea state at the end of May caused an intermittent shut down of operations on the pipe laying barge, slowing the installation of the production and water injection pipelines between the CNV well head platform and the Bach Ho central processing platform. Nevertheless, despite the unanticipated delay, oil production remained on target to begin by the end of July 2008. During June, the installation of the topsides and modules on the platform were completed and the PVD-1 drilling rig returned to CNV from the Te Giac Trang (TGT) field, where it had been redeployed to drill TGT-6X during the platform installation. The three existing development wells were then tied-back and completed.

The first flow of crude oil and wet gas occurred from CNV on 25 July 2008. The hydrocarbons are transported from CNV via a 25 kilometre subsea pipeline system to the processing facilities at Bach Ho. Crude oil is processed and then stored in a floating storage and offloading vessel before being sold. The wet gas produced from CNV is separated offshore and transported to an onshore gas facility for further distribution to meet domestic demand of natural gas, LPG and condensate. The HVJOC has signed a provisional gas contract with Vietnam Oil and Gas Group, with final pricing to be determined by an independent expert during 2009 and applied retroactively back to the start of production.

The CNV field utilises an unmanned platform that is tied back to the Bach Ho central processing platform. This marks a key milestone in the growth of the Vietnam petroleum industry, being the first project in Vietnam to utilise the existing facilities of Bach Ho in order to maximise the life of existing infrastructure and minimise the investment costs.

Development continued after first oil and the sixth well, the CNV-6P, is currently being drilled. The HVJOC is evaluating the necessity for further drilling locations for additional development wells in the fractured Basement reservoir. The CNV field is expected to be in production for the next 20 years, with oil production expected to be between 10,000 and 20,000 BOPD and wet gas production to be between 25 and 50 million standard cubic feet per day (MMSCFD).

BLOCK 16-1

Te Giac Trang (TGT)

The TGT field comprises five fault blocks extending over 15 kilometres on a north to south trend along the eastern portion of Block 16-1. Exploration drilling began on this structure in 2005 with the wildcat discovery well, TGT-1X. To date, seven exploration/appraisal wells have been drilled in the TGT field, with an average oil and gas flow of approximately 11,300 BOPD from each well.

Two appraisal wells were completed in the TGT field during the period. In June, the TGT-6X appraisal well, drilled on the H4 fault block as a down dip test to the TGT-3X exploration well, reached 3,437 metres measured depth (MD), as planned. Two drill stem tests (DSTs) flowed at a combined maximum rate of 14,490 BOPD of 39 degree API gravity crude oil. Although the well flowed gas with a relatively low gas to oil ratio, measurement problems precluded recording a reliable gas rate. The first DST tested an interval between 3,064 metres and 3,094 metres in the Miocene Intra Lower Bach Ho 5.2 (ILBH) "lower" interval and flowed approximately 6,650 BOPD through an 80/64 inch choke size. The second DST tested a 28 metre section in the ILBH 5.2 "upper" interval with a maximum flow rate of approximately 7,840 BOPD through a 64/64 inch choke size.

The second appraisal well to be drilled during the period, and the seventh exploration/appraisal well to be drilled in the TGT field, was the TGT-7X. The well was drilled by the Adriatic XI rig to test a separate, previously untested fault block, designated H3N, and was drilled to improve knowledge of the reservoir distribution. The well flowed at a combined maximum rate of approximately 8,100 BOPD. The first of the two DSTs tested the lower section of the Lower Miocene ILBH 5.2 in a net interval of 37 metres between 2,923 metres and 3,003 metres MD. The test flowed at rates in excess of 7,100 BOPD and 5.9 MMSCFD of gas with no water. The second test, in a net interval of 13 metres between 2,754 metres and 2,773 metres MD of the upper section of the Lower Miocene ILBH 5.2, tested a tighter previously untested part of the reservoir and produced at approximately 1,000 BOPD and 0.5 MMSCFD of gas.

Efforts to achieve declaration of commerciality on the TGT field progressed during the year. In January 2008, the reserve assessment report (RAR), which is a precursor of an official request to approve the Declaration of Commerciality, was submitted to Petrovietnam. The RAR received approval from the Vietnam Government in April 2008. In August, the HLJOC partners unanimously approved the Declaration of Commerciality on TGT. The Outline Development Plan was submitted early in the second quarter and was approved by Petrovietnam in September.

The target is to obtain formal governmental approval of the Field Development Plan, being the final hurdle, in the first half of 2009, with the ambitious target of bringing the field on production by mid-2011. We believe this ambition is achievable given the existing infrastructure in the area and the extensive appraisal programme that has been carried out on the TGT field to date. Approval of the development area will trigger full working interest payment contribution from Petrovietnam.

Te Giac Den (TGD)

Whilst the TGT field was undergoing appraisal, exploration drilling continued elsewhere on Block 16-1 after the Company received formal notification in January 2008 that the Prime Minister of Vietnam had granted an extension to the deadline for surrendering the remainder of the Block until 6 June 2008. This extension was granted to allow the completion of the previously agreed active work programme on the high potential "E" prospect.

The Adriatic XI rig was moved on site in the final quarter of 2007 to re-enter the TGD-1X borehole, which had been temporarily suspended at 4,625 metres, and drill a sidetrack well, the TGD-1XST1. The rig was fitted with high pressure well control equipment, including a 15,000 psi blow out preventer. The well kicked off at approximately 650 metres and was cased three times prior to reaching the top of the high pressure and high temperature (HPHT) section, which was the preliminary target just above Basement.

TGD-1XST1 ceased drilling in May after reaching 5,096 metres MD. Difficulties were encountered during the course of drilling, including equipment problems on the rig and the associated complexities of drilling high pressure sections. The decision was made to not drill an extended Basement section, primarily due to concerns over the integrity of the well bore and also the difficulty and anticipated time and expense of deepening the hole. The well was therefore plugged back to 4,820 metres MD prior to conducting two DSTs in the HPHT Oligocene interval.

The first DST was completed in June and a discovery was declared on TGD-1XST1 after the test flowed gas and condensate to surface, establishing the presence of a working hydrocarbon system. The second DST, completed in July, recovered black oil, condensate and gas, indicating the presence of oil with similar qualities to that of the CNV field. The well encountered approximately 120 metres of good oil and gas shows in a combined gross interval of 570 metres. Permeability and porosity were preserved and compared favourably with pre-drill estimates. The test was hampered by apparent limitations of the perforations, which had to penetrate two casing strings and associated cementing. Additionally, significant downhole damage sustained during drilling and preparations for completion precluded recording meaningful sustainable flow rates from either test. As planned, the well was plugged and abandoned and the Adriatic XI rig was moved to the TGT field to drill the TGT-7X appraisal well on the H3 north fault block.

In January 2009, the Company was notified that the application for the TGD appraisal area had been approved by Petrovietnam. The TGD appraisal area encompasses a 150 square kilometre area, including the HPHT discovery well TGD-1XST1 on prospect "E" and the analogous "E" South Prospect, and borders the southern boundary of the TGT field. The documentation required for the formal approval by the Government of Vietnam has been submitted.

Upon receiving final governmental approval of the appraisal areas, which is expected by the end of the first quarter of 2009, work will commence to reprocess the 3D seismic over the HPHT area in order to identify the optimal location for drilling an appraisal well in 2010. The well design and drilling programme will also be revised to allow a better evaluation of each of the hydrocarbon bearing formations.

Voi Trang (VT)

In January 2009, the Company was notified that Petrovietnam had approved the application for the VT appraisal area based upon an earlier discovery. The award is conditional upon a successful RAR of the commerciality of the previous discoveries in the awarded area. The VT appraisal area encompasses the discovery well and several adjacent leads and covers an area of approximately 100 square kilometres. The RAR on the VT appraisal area is anticipated to be completed by the end of the second quarter of 2009.

THAILAND

The Bualuang oil field is located in Block B8/38, offshore in the Gulf of Thailand. SOCO's 99.93% owned Thailand subsidiary, SOCO Exploration (Thailand) Co. Ltd. (SOCO Thai), holds a 40% interest in the Bualuang field after farming out 60% of its 100% interest.

Oil production commenced on 27 August 2008 from well BA-05. After a period of multi-rate testing of the well, other producing wells were sequentially brought on-stream over the subsequent days. In total, six development wells, five producers and one water injector, have been drilled. Crude oil is processed and stored in a floating production storage and offloading facility (FPSO) prior to onward sale. Work is currently underway to increase the water handling capability of the FPSO to allow the field to reach targeted production levels.

Under the terms of the farm-out, the Farmee was designated the technical operator of the project and will engage an independent reservoir engineer to perform an analysis of the proven reserves contained in the Bualuang field. SOCO Thai will receive an amount equal to one dollar for each barrel of proven reserves over 10.4 million barrels. At a later date, the joint venture partners plan to test the remaining potential within Block B8/38, including the undrilled east flank of the field as well as analogous structures elsewhere in the production licence area. Transfer of interests earned and operatorship to the farm-in partner are subject to approval of the appropriate regulatory authorities of the Government of Thailand.

REPUBLIC OF CONGO (BRAZZAVILLE)

SOCO's interests in Congo Brazzaville are held through SOCO Exploration and Production Congo SA (SOCO EPC), which is held through the Company's 85% owned subsidiary SOCO Congo Limited.

Marine XI

The Marine XI Block is located adjacent to the coast in the Lower Congo Basin, offshore Congo Brazzaville, in shallow waters with depths ranging up to 110 metres and covering approximately 1,400 square kilometres.

In March 2008, SOCO EPC entered into an agreement to farm-out an 8.5% interest from its 37.5% interest in the Marine XI Block to Petrovietnam Exploration Production Corporation Ltd. SOCO EPC remains as operator with a 29% working interest in the Block. The assignment of interests is subject to the approval of the appropriate regulatory authorities of the Government of Congo Brazzaville, waivers of any third party preferential rights and certain obligations of Petrovietnam. The remaining interests are held by the national oil company, Société Nationale des Pétroles du Congo (SNPC) (15%), Africa Oil and Gas Corporation (10%), Raffia Oil SARL (18.75%) and a subsidiary of Lundin Petroleum (18.75%).

During the year, pre stack depth migration processing was carried out on the data acquired in the 2006 3D seismic programme to better image the pre-salt structure. SOCO EPC is currently finalising the terms of a rig contract for a multi-well drilling programme that is expected to commence in the third quarter of 2009.

Marine XIV

In September, the Company announced that SOCO EPC had entered into a farm-in agreement to acquire a 29.4% working interest in the Marine XIV Block, offshore Congo Brazzaville, from PA Resources Congo SA (PA Congo). Regulatory approval from the Government of Congo Brazzaville was received in March 2009. SOCO EPC became the operator of the Block, with PA Congo retaining a 12.5% interest and SNPC holding a 15% carried interest. The remaining interests are held by fellow farm-in participants and SOCO's Marine XI joint venture partners, Raffia Oil SARL (21.55%) and a subsidiary of Lundin Petroleum (21.55%).

The Marine XIV Block is located in the Lower Congo Basin in shallow water, adjacent to the Company's Marine XI Block and will complement SOCO's activity, both operationally and technically. The Block comprises three discontinuous sections located in water depths ranging up to 115 metres and covers approximately 265 square kilometres. Previous exploration activity on the Block has resulted in some oil discoveries. A 3D seismic acquisition programme is currently underway.

DEMOCRATIC REPUBLIC OF CONGO (KINSHASA) (DRC)

SOCO DRC Limited, the Company's 85% owned subsidiary, holds 99% of SOCO Exploration and Production DRC Sprl (SOCO E&P DRC) which holds the Group's interests in the DRC.

Nganzi Block

The Nganzi Block covers 800 square kilometres, onshore western DRC. SOCO E&P DRC is the designated operator with an 85% working interest. Cohydro, the state owned oil company, holds the remaining 15% interest. The production sharing contract (PSC) over the Nganzi Block became effective on 12 April 2008 after receiving final approval through a Presidential Decree.

Preparations for the acquisition of 360 kilometres of 2D seismic were carried out at Kipholo and Lukula. The seismic campaign commenced in July and was completed in October. Processing of the data is currently underway.

Other blocks

In March 2008, SOCO E&P DRC entered into a new PSC with the Government of the DRC, Dominion Petroleum Limited (Dominion) and Cohydro, to acquire exclusive rights for hydrocarbon exploration on Block 5, located in the southern Albertine Graben in eastern DRC adjacent to the border with Uganda where there have been recent discoveries in the same basin.

The Block has an area of 7,105 square kilometres, including part of Lake Edward. SOCO E&P DRC holds a 38.25% participating interest in the PSC with Dominion, as operator, holding a 46.75% interest and Cohydro holding the remaining 15% interest. The first phase of the PSC has a five year span, during which SOCO and Dominion will carry out geological and geophysical work, acquire at least 300 kilometres of 2D seismic data and drill two exploration wells.

An aeromagnetic and aerogravity survey was conducted over Block 5 in July and the results are currently being reviewed. Final approval of the acreage award is pending a Presidential decree.

The Company has a memorandum of understanding as a precursor to negotiating a PSC on a large interior block in the DRC. Interests in this block are not final until the PSC has been signed and a Presidential decree issued.

ANGOLA

SOCO's 80% held subsidiary, SOCO Cabinda Limited (SOCO Cabinda), holds a 17% participating interest in the production sharing agreement (PSA) for the Cabinda Onshore North Block. The Angolan state owned oil company, Sonangol P&P, holds a 20% interest in the PSA and is operator, with Interoil holding 21%, Teikoku Oil Co. Limited 17%, Angola Consulting Resources 15% and ENI Angola holding the remaining interest 10%.

Activity has been suspended pending a review of the security situation. It is now expected that a seismic acquisition programme will begin in the second quarter of 2009. The programme comprises approximately 1,300 kilometres of 2D and 100 square kilometres of 3D seismic.

YEMEN

On 12 January 2008, production from the East Shabwa concession reached the 100 million barrels milestone. In the first two months of 2008, both water injection and gas reinjection into Basement was at capacity with water injection rates of approximately 50,000 barrels of water per day, with an increase in capacity expected thereon. Pressure surveys confirmed pressure maintenance in both the north and western sides of the Kharir field and no significant water breakthroughs. Several Basement wells were temporarily shut-in to allow for repressuring of the reservoir in order to shrink the gas cap in the western part of the field. In addition, activity to increase the production handling capacity of the processing equipment was ongoing and existing equipment underwent debottlenecking to maximise throughput, alongside the addition of new process equipment.

In April 2008, the Company completed the sale of its wholly owned subsidiary, SOCO Yemen Pty Limited (SOCO Yemen), for a cash consideration of approximately $465 million, to Sinochem Petroleum Limited, a Chinese oil and gas company. SOCO Yemen held a 58.75% equity interest in Comeco Petroleum, Inc. which held a 28.57% direct interest in Block 10 of the East Shabwa Development Area in Yemen. The East Shabwa joint venture is operated by TOTAL E&P Yemen under a production sharing agreement with the Government of Yemen.


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