Pharos Energy Regulatory News (PHAR)

SOCO International plc

2 July 2012

SOCO INTERNATIONAL PLC

("SOCO", the "Company" or the "Group")

PROPOSED ACQUISITION OF THE OUTSTANDING MINORITY INTEREST

IN SOCO VIETNAM LTD

SOCO International plc today announces that it has entered into a conditional agreement with Lizeroux Oil & Gas Ltd ("Lizeroux") to acquire the 20 per cent. minority interest (the "Minority Interest") in SOCO Vietnam Ltd ("SOCO Vietnam") that the Group does not already own, for a cash consideration of US$95 million (the "Acquisition"). The consideration is to be satisfied out of the existing cash resources of the Company.

The Group has carried Lizeroux's share of all costs and expenses incurred by SOCO Vietnam, and, at present, is entitled to receive 100 per cent. of any and all distributions made by SOCO Vietnam, until such time as the Group has fully recovered these costs and expenses, including a rate of return (the "Carry Recovery"). As at 31 December 2011, the costs and expenses remaining to be recovered were approximately US$155 million. As a result of the Acquisition, SOCO will acquire the right to receive all of the future cash flows that the Minority Interest is entitled to receive, namely the remaining 20 per cent. of distributions made by SOCO Vietnam post Carry Recovery.

The Directors believe that the Acquisition represents a unique opportunity to acquire the Minority Interest at an attractive purchase price, especially when compared to other recent transactions in Vietnam. The Acquisition will enable the Group to assume complete management control of SOCO Vietnam and thus allow it to manage more effectively the Group's interests in these assets. The Directors also believe that based on their assessment of the value of future cash flows attributable to the Minority Interest, the Acquisition will be significantly value accretive, generating substantial future return for SOCO shareholders.

The Acquisition demonstrates the Group's strong belief in the current value and future potential of the Ca Ngu Vang ("CNV") and Te Giac Trang ("TGT") fields and, in particular, the future production growth from the commencement of production from the second platform on TGT and the ongoing appraisal and development of additional fault blocks in the field, including H5. Through the excellent track-record of the TGT field to date and the Group's ongoing technical co-operation with PetroVietnam and PTTEP, SOCO and its partners have aligned views on the future development of the TGT field to realise its full upside potential.

Further to the Interim Management Statement released by SOCO on 16 May 2012, the second production platform at TGT remains on track to commence production in mid-July/early August 2012, with gross production from the field expected to reach ca. 55,000 bopd shortly thereafter. The Group remains in a very strong financial position and continues to enhance shareholder value through the development of its current portfolio, adding new ventures consistent with its current and historical focus, and returns to shareholders.

SOCO Vietnam holds a 28.5 per cent. working interest in the TGT field in Block 16-1 and a 25 per cent. working interest in the CNV field in Block 9-2, both located in the Cuu Long Basin offshore Vietnam. The Group holds an additional 2.0 per cent. interest in Block 16-1 via its 100 per cent. ownership of OPECO Vietnam Limited.

As at 31 December 2011, the Group reported proven and probable reserves in Vietnam of 121.1 mmboe. These reported reserves include the reserves for the whole of SOCO Vietnam and are defined to be on a net working interest basis prior to any reduction for the impact of the Carry Recovery and also include the Group's 2.0 per cent. interest in Block 16-1 held by OPECO Vietnam Limited.

SOCO Vietnam had gross assets of US$839.1 million as at 31 December 2011 and generated profit before tax of US$157.0 million for the year to 31 December 2011. As the Group is currently entitled to 100 per cent. of the cash flows of SOCO Vietnam, there were no gross assets or profits attributable to the Minority Interest for the year to 31 December 2011.

Lizeroux is classified as a related party by the UK Listing Authority (a "Related Party") by virtue of its substantial shareholding in SOCO Vietnam. In addition, Lizeroux's majority shareholder, Mr Hai Hoang Nguyen, is a Related Party due to him being a director of SOCO Vietnam. The Acquisition is therefore conditional upon the approval of SOCO shareholders at a general meeting of the Company.

A circular setting out further details of the Acquisition, together with the notice to convene a general meeting and the form of proxy for use at the general meeting, will be posted to SOCO shareholders as soon as practicable.

The Acquisition is expected to complete by the end of July 2012.

Ed Story, President and CEO of SOCO, said:

"The Acquisition represents a unique opportunity to consolidate our interests in SOCO Vietnam, enabling the Group to generate greater long-term value by capitalising on the production growth and upside potential of the TGT and CNV fields. The Acquisition will be significantly value accretive, generating substantial future return for SOCO shareholders."

ENQUIRIES:

Merrill Lynch International ("Bank of America Merrill Lynch"), which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for SOCO in connection with the Acquisition and for no one else and will not be responsible to anyone other than SOCO for providing the protections afforded to clients of Bank of America Merrill Lynch or for providing advice in relation to the Acquisition, the content of this announcement, or any other matters referred to herein.

Certain statements made in this announcement are forward-looking statements. Such statements are based on current expectations, and by their nature, are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. The information does not assume any responsibility or obligation to update publicly or revise any of the forward-looking statements contained herein.

NOTES TO EDITORS:

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, the Republic of Congo (Brazzaville), the Democratic Republic of Congo (Kinshasa) and Angola, with production operations in Vietnam.

SOCO holds its interests in Vietnam, all in the Cuu Long Basin offshore, through its 80 per cent. owned subsidiary SOCO Vietnam and through its 100 per cent. ownership of OPECO Vietnam Limited. SOCO Vietnam holds a 25 per cent. working interest in Block 9-2, which is operated by the Hoan Vu Joint Operating Company and holds a 28.5 per cent. working interest in Block 16-1, which is operated by the Hoang Long Joint Operating Company. OPECO Vietnam Limited holds a 2 per cent. interest in Block 16-1.

SOCO holds its interests in the Republic of Congo (Brazzaville), all offshore in the shallow water Lower Congo Basin, through its 85 per cent. owned subsidiary, SOCO Exploration and Production Congo SA ("SOCO EPC"). SOCO EPC holds a 40.39 per cent. participating interest in the Marine XI Block and a 29.4 per cent. participating interest in the Marine XIV Block and is designated operator of the two Blocks.

SOCO holds its interests in the Democratic Republic of Congo (Kinshasa) though its 85 per cent. owned subsidiary, SOCO Exploration and Production DRC Sprl ("SOCO E&P DRC"). SOCO E&P DRC holds a 65 per cent. participating interest in the Nganzi Block, situated in the North Congo Basin onshore western DRC, and a 38.25 per cent. participating interest in Block V, in the southern Albertine Graben onshore eastern DRC. SOCO E&P DRC is designated operator of both Blocks.

SOCO holds its interests in the Angolan enclave of Cabinda through its 80 per cent. owned subsidiary, SOCO Cabinda Limited, which holds a 17 per cent. participating interest in the Cabinda Onshore North Block located onshore in the North Congo Basin.

END