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I often post this in response to Ross, but in this case it has my detailed take on the OXY part of the deal:-
As per usual listen to negative Ross or realise this is what we are playing for.
As per ColonelDrake:-(+edits from me)
Rough Calcs
1. CPO-5 to ONGC for premption rights so goes for industry base of $10pb to $12pb per barrel and $1 or $2pb for p50 resources or portion of 2P. Estimated value circa $250m (conservative)
2. Plat based on 4000bopd and 15mmboe $175m
3. OBA - Strategic worth $75m to $100m
4. PUT blocks 50% - $100m to $150m now OXY involved.(replace with $217m per my post below)
5. Cash in bank of $60m approx (based on reduced capex for 2019)
Total $650m to $750m (i get $800m)
Equates to £520m to £600m(therefore £640m)
Based on roughly 1.3bln shares in issue (assumes all management options exercised)
Value 40p to 46p (im at 49p & comes with the bonus of telling my boss to go feck himself)
I also posted :-
Dont forget 30% CPO-5 is held in a separate subsidiary company & is therefore already packaged nicely to be sold separate from the remaining Amerisur assets.
Regarding the Oxy valuation.
The 50% we currently retain has control rights (so should be worth more than the bit we sold+we didnt take the highest bidder back then (now we would)) therefore :-
Our 50% should read $93m + $19m = $112m+(5%Control est) + (5%highest bid est) = $124m
+The Credit for the bit we sold $93m + $19m = $112m less cash recieved $19m = $93m Oxy Credit.
Therefore the total is more likely $124m + $93m = $217m (less any 50% of any OXY spends incurred (no idea if they done much yet)).
That total includes nothing but the OXY involved land.
A few points in respect of your valuation:
1. I agree this situation has been in the offing for some time. Indeed if an approach to buy the company had not been made, I think Amer would have been engineering one!
2. I expect the first Indico appraisal well to be spudded in the next two weeks. Having got so close to this and with it potentially having a big impact on the companies valuation, I can't see them selling the company before the result is known. Either that or a potential buyer has to include some up side in their take out price for a positive result.
3. The $93m work programme Oxy committed to as the price for 50% of the Putumayo blocks has a net value to Amer of $46.5m (Oxy will be 50% beneficiaries of the seismic and other works). So the total value of the whole of the Putumayo block I put at around $100.
Given the above points my valuation comes out pretty close to your own.
PS. Rossannan - Don't know what you get paid for spouting your negativity but you are rubbish at it. Lazy and totally lacking research.
Someone makes an educated guess of a price over 24p.
What are the chances ROSSY turns up like to discredit - ill start by saying 100%.
I thought we had got rid of the deramper fool, but seems not.
A "risk off" market is pricing in the worst possible case, no deal.
Volume is low, indicating that the market is following the BOD's advice, to hold. Some selling is taking place by funds who have to liquidate stocks to fund cash withdrawals. There have been brilliant buying opportunities on AMER and so many of us will be "maxed out" on AMER. It is the prudent balancing of greed and fear: there simply is a limit to how much one should have in any single stock, whatever the potential near term upside.
As PP says, the house broker is going to be close to the mark.
PP
There is no OXY cash: the $19 million for PUT 8 will have been paid by us out of OXY's prepayment and the $93.25 million will be largely "pay as you go" ie they stump up for the seismic etc. as the contracts are signed (mirroring the financial prudence in the PUT 8 scenario). It is not in the year end accounts, but then, of course, the farm in still required approval ANH.
bigsmoke
Of course we are, and the market’s guess should not be ignored, not least because it sensibly excludes the poke that the pig is in!
Rossy- I was not aware we were involved in a game of guess the weight of the pig
If a sale was a sure thing at say 27p cash - how is it that all those day traders cannot
miss a 50% profit over two months . What holds them back ? I assume most of them are looking for a quicker trade - and the institutions are happy to just sit back .
pickedpeck
Sounds like wishful thinking - do you really believe that the market could have got it that wrong over the last few weeks?
So as it has been suspiciously quiet I am going to try and call it...
I think some inflated values have been bandied about, but I think we’ve been at this a lot longer than the company has let on. The twitter account dried up mid June rather than mid July, having previously had something to say every few days it went quiet a month before the offer became public.
Amerisur themselves reckon the NPV10 2P value of CPO5 based on Mariposa and Indico is $174m, but that’s pre Indico 2.
Platanillo I think would have a value of $125m or so based on $8 a barrel in the ground, I know it could go higher but the oil price would keep it low with Brent back below $60.
The balance of the Putumayo blocks $200m based on Oxy’s level of interest, could be lower.
Cash in the bank probably somewhere near $60m
Value of OBA? Real terms stands about $20m capex but more importantly 3 years of time. $40m conservatively?
Whichever, that comes out to $600m, or give or take a few quid £500m at the current exchange rate, 40p a share. Discount a bit off for unfounded optimism and you get to Stifel’s 37p.
In other words I think the house broker told us the sale price right back at the beginning. Come up with that and it’s a goer or don’t bother as we won’t be accepting. I would imagine they got Michinoko to back the price and level of return (50% on their 25p block) before publishing the price.
So my call is a board approved offer of 35-37p from most likely OXY or possibly GTE either this week or next week ahead of the interims and also ahead of Indico 2 spudding. The logic of the timing is they will need it approved before Indico 2 potentially puts another $100m on the price, and the offer needs to preempt the interims too to avoid too many questions about where the OXY cash actually is.
£300m = c. 24.7pps
trades friday.
if that refers to my buy check trades tuesday, it was made at 16.20. Today. Also check out CP81' s posts for untrustworthy.
Yeah , LITTLEPOST
Seems to be a whole lot of untrustworthy idiots amongst us just lately ....you know who you are
Zzzzzzzzz
CP1981 Sp07 Aug 2019 21:13
It is when your a £1000 down for the day ??
Big Wow!!!
23p is acceptable? x2 maybe.
Big wow
Not showing yet, but definitely should be a buy circa £10,994ish.
Just bought another 11k, well, just under as included fees. Couldn't resist:)
Delayed off book trade. Bots working hard to balance the books in the last hour. Although, I guess the day to day trading currently is a sideshow.
think they are just having problems with pricing updates as they show on the londonstock exchange trades
not showing up on the trades and processed before midday??. shanningans
Question: with AMER being sold what is the position with legacy barrels? If AMER is no longer in being as a company to collect the legacy would this be a factor considered during the sale process with an added premium factored in to the eventual price.
In an attempt to further soothe minds for the weekend I'll share a view which comes to me when AMER's positives are listed by those of you more knowledgeable than myself.
South America and the oil industry are both known to have very macho cultures so as things stand now I think of AMER as the beautiful woman sunbathing on the beach in the late afternoon surrounded by several keen would be suitors. She'll be watching them all and considering their advances and attributes. But then, along comes 'the one' and off she sails into the sunset. :-)