LONDON (ShareCast) - Oil exploration and production company Soco International said it would return 40p a share to investors after producing record half-year profits and production.

The company, which is focused on Vietnam and west Africa, said the cash return was intended to be the first of a sustainable annual payout to shareholders with subsequent returns targeting 50% of the company’s annual cash flow.

Soco said production in its first half averaged 17,135 barrels of oil equivalent a day, up about 40% on the same period last year. Profits rose to $105.4m in the six months to the end of June from $97.2m last time.

Its cash and liquid investments’ pile has risen to $361.3m from $258.5m at the end of 2012.

Chief Executive Ed Story said: “We will continue to focus on maximising shareholder value through a combination of an active exploration and appraisal programme primarily through organic growth but which may be complemented with selective acquisitions that are consistent with our risk appetite and financial discipline.”

Alexander Holbourn, analyst at Bank of America Merrill Lynch said the size of the cash return was a surprise even compared to his optimistic forecast of 25p a share. He estimated the company could return a total of $6bn within six years.

Shares in Soco were 4.2% higher at 402p at 09:29 on Thursday.

TB

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