Not for distribution in or into the United States

SOCO International plc - Convertible Bond Issue of $200 million

SOCO International plc ("SOCO") announced today the launch of 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 programme 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).

Stabilisation/ 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".

For further information please contact:

SOCO International plc
Tel: +44 20 7747 2000
Roger Cagle, Deputy CEO and CFO

Merrill Lynch International
Tel: +44 20 7996 1000
Michael Hammond
Andrew Osborne
Russell Alton

Pelham PR
Tel: +44 20 7743 6676
James Henderson
Alisdair Haythornthwaite

This press release is for information only and does not constitute an offer to sell, purchase, exchange or transfer any securities or a solicitation of any such offer in the United States or any other jurisdiction. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. Neither SOCO nor any other participant in the transactions described herein intends to register any securities under the Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States in connection with the proposed transactions described in this announcement. This communication is directed only at persons who (i) are outside the United Kingdom (other than in Jersey) or (ii) have professional experience in matters relating to investments or (iii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc") of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Securities to be issued pursuant to any offer 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).

In member states of the European Economic Area ("EEA"), this announcement and any offer if made subsequently is directed only at persons who are "qualified investors" within the meaning of Article 2(1)(e) of the Directive 2003/71/EC (the "Prospectus Directive") ("Qualified Investors"). Any person in the EEA who acquires the securities in any offer (an "investor") or to whom any offer of the securities is made will be deemed to have represented and agreed that it is a Qualified Investor. Any investor will also be deemed to have represented and agreed that any securities acquired by it in the offer have not been acquired on behalf of persons in the EEA other than Qualified Investors or persons in the UK and other member states (where equivalent legislation exists) for whom the investor has authority to make decisions on a wholly discretionary basis, nor have the securities been acquired with a view to their offer or resale in the EEA to persons where this would resulting a requirement for publication by SOCO or Merrill Lynch International of a prospectus pursuant to Article 3 of the Prospectus Directive. SOCO and Merrill Lynch International and any of their respective affiliates, and others will rely upon the truth and accuracy of the foregoing representations and agreements.

Merrill Lynch International is acting solely for SOCO and no-one else and will not be responsible for providing the protections afforded to customers of Merrill Lynch International, respectively nor for providing advice in relation to the transaction. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Merrill Lynch International or by any of their affiliates or agents as to or in relation to the accuracy or completeness of this release, or any other written or oral information made available to or publicly available to any interested party or its advisers and any liability therefore is hereby expressly disclaimed. The distribution of this announcement and the offering or sale of the securities in certain jurisdictions may be restricted by law. No action has been taken by SOCO, Merrill Lynch International or any of their respective affiliates that would permit an offering of the securities or possession or distribution of this announcement or any other offering or publicity material relating to such securities in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required to inform themselves about and to observe any such restrictions. Merrill Lynch International is authorised and regulated by the UK Financial Services Authority.

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN
 
 
 
 
 
 
 
 

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