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@Wait Yes indeed and you may well be correct. My post wasn't designed to weigh heavy on the belief that ONGC or indeed AMER are playing games with this result, more an opened ended question that welcomed further thoughts.
Whatever the case the test may well be taking longer but given it is just about the only drill that AMER has on the books right now (Plat 22 sidetrack aside), one would think that an update on its progress would have been merited by now. It certainly must be 'imminent.'
"Sol-1 test is therefore running at more than 50% longer than Indico-1. The question is why? and how long can ONGC hold out before releasing the figures."
It could simply be down to testing two zones rather than one.
A more charitable thought on ONGC is that their testing is thorough and aimed at maximising the return from SOL over the long term.
It is easy to damage these wells (see Yatay 1)and Mariposa and Indico are a credit to management: long term steady producers and that is what delivers the best payback. As there were two pay zones, getting optimal long term flow will obviously take longer.
From the Stifel note, it seemed reasonably clear that there will be commercial flow, which is good for cash flow and reserves and that note also indicated a couple of weeks, so probably next week now.
Thanks for the comment on GTE, Leas: odd that Peel Hunt saw them as the purchaser and yet they do not get a mention in the press comment, obviously being put out by AMER.
The surprise for me will be if it is not OXY for everything, including our 30% of CPO-5, although I can see than the Llanos 34 crowd will be desperate for the southern extension of their existing trend or they will run out of road shortly.
Whilst my own current estimated price lies somewhat below that of a good number of contributors here (23-25p), I do think it has the potential to be improved by AMER achieving a break up of the parts of the business and sale to those parties that know the most about them. i.e. their current partners.
Whatever is happening with the 2nd rig or indeed the results of Sol-1, ONGC have the greatest knowledge of that block and the results gained to date. Therefore, they for me must be the very best chance for achieving the highest possible price for that particular asset, but I do stress 'possible price.'
The same should apply to the Putamayo assets and OXY who it may just turn out have been reviewing the assets and their ability to be exploited (indigenous population disagreements etc) and nothing else these last 6 months or so. They are not as far down the line as ONGC but they have clearly stated they took on those 4 blocks because of the OBA. So again an asset sale led by AMER may just bring the greatest success if they are able to achieve it or indeed have the options at their disposal to see it through. In the meantime, I remain cautious and maintain my estimate because as is usually the case with these things, they never normally fetch as much as us PIs would expect or indeed hope for.
Between ONGC and AMER.....and between positive and negative outcomes....
They want the news released and they don't, because it will make AMER more valuable or less valuable.
No idea how to call it. They both know what information is avilable, though. Oh, to be a fly on the wall.....
@Jaggers I tend to agree with you on SOL being commercial. According to the Indico rig tender the drill and test phase for Sol-1 was set at 32 days and the completion period set at 24 days.
Drill spud 11th May and result was announced on 17th June = 37 days
Current short term test period is running at 36 days.
In comparison Indico 1 drill result was announced on 10th Dec and the results of the short term test were released 23 days later on 2nd Jan.
Sol-1 test is therefore running at more than 50% longer than Indico-1. The question is why? and how long can ONGC hold out before releasing the figures.
In my view one doesn't test a dry well for 36 days.
Is it in ONGCs interests to delay the result? Who knows as we don't have enough information to judge it. What we do know is that it isn't in the AMER BODs interests to delay the result and whilst they are supposed to wait for the operator to make the first move, that demonstrated through Indico-1 that they can make an announcement ahead of ONGC be it against rumored press leaks, which at the time I was unable to locate.
All that aside, Sol-1 indeed looks commercial, question is how good is it and what does it mean for the entire fairway on that particular part of the block.
"They have certainly dragged their feet and avoided the second rig. I think we all know the reason why now. They were and are in no rush to prove up AMERISUR's resources"
Also question about whether ONGC are front loading the development costs - seem an awful lot of tenders on the ONGC web site that ain't going to be cheap. Investing more up front, while producing less is going to put more pressure on AMER.
Blindly obvious that Sol is commercial, and quite possibly like Indico ‘charged’ as it sits above exactly the same source rock.
The game now, in CPO5’s NW corner is simply to find the trap in the LS3. Post Sol-1 that will be abundantly clear to both ONGC and AMER. Hence the return to the massive trap and deep reservoir at Indico. So how badly do ONGC want it? IMMHO achingly badly :)
col - worth stating that 20.5p in Spring was not a spike, but we held for a number of days.
I mentioned the switch of valuation methodology yesterday and agree wholeheartedly.
Think leas (I think) comment re absence of GTE is interesting. Maybe they will arrive fashionably late?
Your last point about ONGC "They have certainly dragged their feet and avoided the second rig. I think we all know the reason why now. They were and are in no rush to prove up AMERISUR's resources" is a good one.
A lot of folk posting about what they would like to happen, I’m just trying to figure out what is actually going to happen. BTW, have been posting on the AMER ADVFN BB since 2017.
'but unfortunately it wasn’t and we are where we are.'
rossannan, yes in the process of being bought out! Why have you only started posting since the Friday RNS? You say your invested but the 'tone' of your posts suggest that you don't want to see a share price rise.
You don't strike me as a guy/gal who has any positivity about their investment. If your purpose is to knock investor confidence in this process then your deluded.
We are mere spectators that can leave the game at any time. What we do will not affect the outcome of the result.
That certainly should have been the starting point, but unfortunately it wasn’t and we are where we are.
No, I said towards 12p, i.e. south rather than north.
it will be sold, as the the likelihood of the formal sale process not arriving with asset sales or entire company sale is virtually zero.
Why? Because management have a number of II's that want out and management have a number of oil companies that want in or want more or want to secure what they have already.
It's just a question now of whether a sliced up cake gets more value (and that includes timely exits rather than dragging on) or whether whole business sold reeps more.
Ironically, some of the II's that were selling and keeping the sp in the 12p channel are now actually buying! Naughty... they have contributed to this situation and now look certain to capitalise on it.
More Holdings RNS's will follow over the coming days and it will become clear who is stakebuilding and who is holding firm and if any are selling.
Long and mid termers will remember the sp performance in spring when the sp tested 20.5p after great indico-1 news. The drift down to 12p was based on relentless II selling and poor sentiment after Calao-1.
But the reality is, the market were happy to price AMER at 20.5p based on operations and not a full takeover which is normally 30% to 50% above what the market rates a business at (in general). So 20.5p was the last real valuation marker of what the market thought after Indico-1. Planty has changed since then namely higher production and the important addition of PUT-8 and farm out.
At 20.5p the market was valuing the business on operations and exploration. At 12p the market was facilitating a trade plan between a couple of II's which wanted out and a couple that wanted in and 12p was the agreed price range. That level becomes irrelevant once a company goes into takeover mode as balance moves from II trade sales to company valuation. Two very different things.
So 20.5p is the starting point and the market has yet to arrive at that. Then after, it will either be traditional 30% premium or it will be 50% to 100% premium which happens more in bidding war situations or where multiple buyers are involved.
I don't expect this sale to take months, I think it will be over in a few weeks. Will ONGC wait and delay Indico-2 and 3 or will they get on with it? They have certainly dragged their feet and avoided the second rig. I think we all know the reason why now. They were and are in no rush to prove up AMERISUR's resources especially now.
Rosannan , you were saying exactly that the other day , look back at your records. You clearly stated a retrace to 12p if the deal fails.
Diggit1gold the half of 66 was my serious number! 66 was a figure plucked out of the air.
I am not saying that it would head back to 12p if the process came to a halt for whatever reason, but like you I think that it will probably be sold - I would say that a sale in whatever form that takes is in fact almost inevitable, now that the dog has seen the rabbit. I agree with you that this has come about earlier than is desirable for maximum shareholder value.
A lot of suitors per below report in Evening standard paper- M&P the lightest of the light weights. This will go on for weeks and will be north of 30P - regardless of what paid De-Rampers such as Rosanan state / deal doesn't need to happen. The dude Rosanan - never was seen on this board for 2+ years, posts seldom on a few penny stocks, has bought no insight but constantly de-ramps. I will write to LSE to ban him from Amerisur board....
Evening Standard write-up was interesting - more players than I initially surmised supposedly in play for Amerisur
"A bidding war for AIM-listed Amerisur Resources was in full swing today after the oil explorer turned down an offer from Paris-based Maurel & Prom — opening the door to other offers.
Colombia-focused Amerisur put itself on the block last week and Maurel & Prom offered 17p per share, valuing the firm at about £210 million. But Amerisur rebuffed the bid, saying: “The board concluded that the offer undervalued the company and was not at a level that merited further consideration.”
The company said it is now evaluating other offers it has received in a sales process being run by BMO Capital Markets and Stifel. Firms understood to be eyeing up Amerisur include US companies Occidental and GeoPark, India’s Oil and Natural Corporation and Canada’s Parex Resources — all of which have operations in Colombia.
Colombia’s Ecopetrol is also believed to be interested as well as former BP chief executive Tony Hayward and private equity firm Carlyle who teamed up in 2017 and have been hunting for assets in Colombia for the past two years.
The firm — which is chaired by former ECB chairman Giles Clarke — saw its shares rise 6% or 1p at 17.4p. "
Nonsense why does it have to happen. If it doesn’t it doesn’t no big deal. The market will have taken a good look at the assets and a new base will have been established. This has come about earlier than is desirable for max investors value. I think it will probably be sold and we probably won’t get as much as some hope, but there is strong grounds to argue for a valuation north of here. It might go for less than 25p which will be a tragic. 30p+ and I won’t be too unhappy. Might be a combination of shares and cash. Personally I’m ok with that if the cash is 20p plus. You seem to think higher expectations 46p etc are unfounded but such a view can be argued given the assets and potential. I think it’s unlikely but I’m happy to accept that upside potential is really good and downside is limited by improving market knowledge of the company. In a no sale scenario a drop below 15p for long now seems unlikely in my view
The problem is that if a deal doesn’t happen this time round the share price heads back south. The genie is out of the bottle - it kind of has to happen now. Buyers are no doubt quite happy at the prospect of this being wrapped up before Indico-2 comes in or there is time for a sustained oil price rally.
He’s got you there.
Gary, telling peeps to wise up tonight for expectations of lesser valuations than you yourself mentioned in your Friday 10.45pm post is just a bit rich imo. Care to comment?. If not fine. I'll stick by my 48p to me per share or i don't care if we deal or not this time around. ATB. :o).