A disappointing result in the end for Loto-2 with water cut in both zones and mobility problems. Further testing and analysis will be needed but this should be taken in the context of the whole Petro Dorado deal which not only brought the company CPO-5 but the Tacacho contract and tax losses worth $20m to AMER, all for $6m…The well was drilled very cheaply, about $2m all in to Amerisur and continued proof of how well the guys on the ground work operationally.
The key focus however for AMER is the upcoming opening up of the interconnector pipeline between Ecuador and Colombia which is on track for the end of this quarter. At this stage the company will be able to increase its production by drilling more wells and reinstating those shut in earlier this year. More importantly the costs of distributing the oil will fall, dramatically transforming the economics of the company, indeed if they persuade other companies to share the pipeline then you have another income with negligible costs.
Amerisur (AMER.L): PTA's Suitor, No Commercial Oil in CPO-5
See the results from Loto-2 well below. AMER remains fully dependent on only one Block and one field, Platanilo field, in the Putumayo Basin and the pressure for production diversification mounts. AMER doesn't have production from another Block or another field. So AMER comes even closer to Petroamerica (PTA.V). AMER can exploit its high valuation on the London stock exchange and pay with shares:
AMER's Cash position at period end is US$55.6m with no debt.
AMER's Enterprise Value now in London is US$380 Million while PTA's EV now is just US$50 million. Irrational valuation gap that shows Petroamerica's (PTA.V) gross undervaluation at C$0.85/share despite PTA's Production and Reserves diversification (pro forma the recent deal with PETRONOVA) and the 3 Operatorships.
Datafeed and UK data supplied by NBTrader and Digital Look.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.