Member Info for jointhedots

Incidentally, has anyone wondered about the tight spread over the last few days, particularly yesterday when at time the Bid/Ask where practically the same at times!

My view has always been that when the MM's open the spread it's because they want to move the SP is a certain way of their choosing and minimise risk of some exposure they have or don't want.

On the other hand IMO a tight spread signifies a healthy market with traders moving the SP in the direction they want - IMO it's a good sign that the MM's are asking the market where they want to take the SP - I may be wrong but I take it as a good sign that there is no drag on the SP.

I really don't see it, that is all the fretting about?

Increased costs will have associated increases in production which will ramp up alongside and provide income or the programmes will simply be slowed.

Putting cash more productive use is the name of the game for all expanding companies, and our BoD will have done the maths and understand better than any back of fag packet or gut feeling assertions on BBs. Unfortunately, I guess the BoD can't produce their usual presentation on the purchase as previously was the case as it is the closed period

Lets take it for what it is, great news.

GENL RNSed this morning about great cash generation and starting to return it to shareholders via a 2019 dividend policy - suffice to say the SP has crumbled around 5% so far today. Investors in growth companies in risk regions don't (except for a few that don't understand the proposition) want to hear that the company can't put it's cash to good use until the business is mature. We (I do) invest for substantial returns not to have cash returned or having an over large nest egg sitting in the bank with no plan to use/leverage it speaks volumes of a company bereft of ideas.

Fortunately, that assessment does not apply the Amerisur, they are use the cash wisely and growing the business without exposing the company to financial risks.

All programme (except CPO-5 in which any spending we presumable approve) spending is within the control of our BoD and we have cash, no debt, cash generation from operations and a large loan facility that could be increased if necessary - what on earth is the problem????

We all know but won't say - some PI's have been bitten hard by placings in other AIM companies and appear to live in constant fear of being stung again, so illogical assessments and suggestions are made even though the CEO has ruled out the need for capital - all I can do is state my opinion that there is no evidence of any problem and no reason to raise cash unless the company is planning a large additional asset purchase, in which case debt can be used in place of equity.

This deal is probably why Amer backed off Ecuador licences and allowed GTE a free run (mutual agreement maybe!)

Of course there is no funding issue (problem) the company has a substantial loan facility which it has never used and could surely increase that considerably now it light of the underlying business strength.

Looks like all the cheap crisis bargains have gone - $19m is a lot of money for that block IMO.

But I sure our BoD recognise great potential and can now get on with developing it at long last, perhaps Gran Tierra where also pushing for it.

Puts it into perspective what a great deals we did during the turmoil of the downturn.

It's interesting that many of our peers are adversaries when it comes to acquiring blocks and partners on others project - X -company relations in-country are very useful and I suspect help everyone.

In the spirit it is good to consider what has just happened in Ecuador intercampus licencing and the information I found at the weekend about the oil major, Hess corporation, considering and entrance into Colombia.

The attached link about Intercampos states the winners and losing bidders and also the companies that successfully registered to take part.

Very enlightening that a little outfit called Amerisur Exploracion Colombia Limited are in the list of qualified operators - so we had a sniff at these blocks but decided not to bid. The signal is that Amerisur are prepared to enter into Ecuador for the right asset.

It is also interesting that Gran Tierra went head to head against the Fonterra/Geo-Park consortium to Acquire their new blocks:

"Block 50 (Charapa), had the Frontera and GeoPark consortium squared off against Gran Tierra, which saw the latter scooping up the block. After the round, Gran Tierra touted the fact that it has added three Ecuadorean blocks – Block 50 (Charapa), Block 51 (Chanangue), and Block 89 (Iguana) – to its portfolio. “Based on preliminary results, the company has made a new-country entry into Ecuador through the submission of winning bids for a total of three blocks,” a Gran Tierra spokesperson said.

The three blocks encompass 140,000 acres in total area, creating a contiguous acreage position extending from Gran Tierra’s existing assets in the Putumayo Basin in Colombia. These Colombian blocks include PUT-7 and Suroriente."

I guess the full list of qualified bidders gives us a hint of the baseline operators interested in the region and Colombia will have some very substantial additions to the list including: ONGC, Oxy, Shell, Sinopec and now Hess.

Finally - be in no doubt CPO-5 will be very important to ONGC as it grows, but irrespective of that they have had a torrid time with other prospects so any success will provide them with the PR they crave - hence the mention on their corporate website. They won't want to screw this up guys, they need a few wins.

https://info.drillinginfo.com/ronda-xii-intracampos-2018-seven-companies-present-offers/

The SP is looking fine , the oil price is rising and some shareholders are optimistic over the latest ONGC tender (I think there will be a lot more in the coming months including a second rig).

Anyway, all is Rosy in the Cottage this morning and I don't think anyone should be surprised at no RNS first thing - think it through, if they couldn't release on Friday the likelihood is that any RNS for Monday would most likely need to be constructed considered and approved today at least by some BoD members, unless they all worked Sunday for some reason. So if something has to be released than IMO it could be today during the session. Do any of you really expect GC and NH to work the weekend, JW maybe.

We need to be sensible, the well could be delayed, the analysis complex for some reason, ONGC insisting on as news blackout, locals playing up etc Who knows, but as I said week just relax, all will be revealed and this well is not critical to anything in the long run. It takes no time at all to report a complete failure - so all to play for IMO.

It is being reported that new entrants into Colombia are in discussions about taking up blocks in the new licencing round, very interesting from an Amerisur perspective as it will surely increase competition for assets and increase the value of Amerisurs,

"New players enter fray in Colombia's latest round

Companies including US independent Hess and private player Hunt Oil have been in talks with Colombia's hydrocarbons regulator ANH"

It is especially pleasing to see Hess corporation as they currently have no operations in mainland S America but have operations in the Bakkan so are in the Oxy peer group.

They have an exploration budget of $2.9bn and I guess just like many of the existing players could swallow up Amerisur easily - and what a great way to get a presence from their perspective, instantly becoming partners with two of the biggest operators.

Even if only interested in new blocks or offshore, it is still a further endorsement for investing in Colombia from a Fortune500 company

I'm not sure everyone has a good grasp of the significance of dip - the new well could be drilled deeper than Indico and still only intersect the same base level. ~Depends on the inclination of the strata, I assume it dips on that direction as its hoped to help prove OWC.

The idea of drilling deeper into the basement sounds a little far fetched, the operator will know if the base rock is porous, if it's not they could drill hundreds of feet and prove nothing - if it where as simple as just drilling a little further then they would design the well that way - lets just assume they know what they are doing guys. There is also the little matter of establishing if the prospects are interconnected, if not the OWC proves nothing in respect to Indico or other prospects.

IMO everyone should assume all is OK until the RNS, don't over think it as you'll almost certainly be wrong, there will be plenty of time to fret afterwards if the outcome is disappointing.

My personal opinion is they will find oil (every well in CPO-5 has) but the issue is about significance, if it flow over or around 1500bpd (generally the better wells on Llanos 34 did) the then BoD will have something to crow about.

CD- I think you are over simplifying a directional well and almost certainly wrong in respect to our well, it will go wherever it is designed to do. if it goes horizontal it wouldn't prove anything extra at this stage, just cost more money, it should pass through the oil bearing strata, I would have thought along the shortest route to get logging information, samples and hopefully a productive well..

Oh my god, what's to become of us? Should I sell and cut my losses? lol

No matter what anyone says there are those that can't help stressing/fretting about bugger all.

The situation is - we don't have clue if the new well is a success/failure or the outcome is still to be determined. The chance of success is as high as it was before the drill rig started turning the drill bit .

The RNS is not late, Indico was announced early because the BoD believed the news had been leaked - wasn't there a 10m share buy the day previous. This time there is no indication of a leak, so everyone should stay focused on the big picture as some other posters have indicated.

Even dud on this one has no bearing on the rest of the wells as they are in the opposite direction and we are only officially seeking a couple of million barrels and the next well opens up a resource 10 times the size. If it's a success I suppose it could open up loads of new potential but it's not critical.

In a more general sense, anyone who hasn't got a high risk threshold that they can tolerate should not be invested in AIM let alone Colombian oil - I think many AIM investor (not just in Amerisur) should perhaps consider risk more closely - look what just happened to VOG and MATD, in both cases the risk was clearly known

Interesting that our peers are actively seeking acreage in Ecuador, clearly they are all looking for expansion opportunities and IMO Amerisur's assets would be every bit as attractive to all the cash rich companies than the intercampus blocks they've bid for - they being Geo Park Fonterra and Grand Tierra.

Also note the link-up between Frontera and Geopark, the combination of those 2 makes an entity able to take out Amerisur with ease. It was reported a couple of weeks ago that Fontera where considering pulling out of Peru and looking at investments in Ecuador and Colombia.

Also first time I've seen mention of a Russian outfit in the vicinity.

"The blocs are estimated by the government to contain some 854 million barrels of oil. “I don’t know if we’ll reach the expectation we had for $1 billion in investment,” energy minister Carlos Perez told journalists. “I estimate, and this is approximate, that we’ll reach around $600 or $700 million.”

One bloc received no offers, he said. Contracts are expected to be signed in May.

Bidders are Russia’s state-controlled Zarubezhneft, Uruguay’s Petrobell, Colombia’s Gran Tierra, Colombian-Peruvian consortium Frontera Geopark , the United States’ Flamingo Operating and Ecuador’s Petrolamerec. "

https://uk.reuters.com/article/ecuador-oil/six-companies-bid-in-ecuador-oil-auction-investment-likely-lower-than-expected-idUKL1N20Z1BA

From a subscription only website so can't read all article published yesterday, but apparently there is a new pipeline due to be commissioned in LLA34 (our near neighbour to CPO-5) connecting to Colombia's main export line.

Perhaps an opportunity for direct sales, upscaling, of CPO-5, I guess they might sell us spare capacity as ONGC are the Llanos 34 operators partner to look at joint opportunities in Colombia

"Parex readying for new Colombia pipeline"

"A flowline that will connect Colombia's Llanos block LLA-34 to the country's export pipeline system is due to be commissioned in …"

That was the daily average production in 2018.

Disappointing IMO and but for the great result from Indico our Bod has performed abysmally.

We should all quite rightly be very enthusiastic about CPO-5 but our BoD can take no credit for the operational aspects of that - JW has had a lot of praise on this BB of late but shareholders are conveniently ignoring the underlying truth that he has presided over year on year underachievement and missed targets.

Lets not lose site of the opportunities missing to propel the SP much higher - don't be dazzled by CPO-5 potential, operationally of team have been woeful.

This needs pointing out especially when AGM time is approaching and director performance bonuses are likely - he should earn one.

Good for Colombia !

https://www.bloomberg.com/news/articles/2019-02-27/u-s-sanctions-on-venezuela-are-a-blessing-to-colombian-oil

wrt - drilling result. clearly it could be anytime, even today. Based on part experience there is likely to be an update of the oil column initially and a more detailed report later after proper logging.

Lets face it, it is a relatively simple exercise using an experienced team that has already drilled successfully through the strata, so IMO a significant delay is highly unlikely as it will cost the contractor money. Geo - park drill holes in the Llanos like shelling peas, the question is will ONGC be able to emulate that and cut costs/well on what could be a very active programme.

I suspect we will need to drill all the well so far indicated and a whole bunch more before we have a clear picture of how much oil is present and hopefully the volume will grow with each - establishing that Mariposa to Indico is continuous would be a great start and I guess increase the Mariposa reserves significantly.

Cost cutting is an area of great potential and not only for ONGC, our management have been poor in this area IMO.

wrt oil/water content - if Mariposa and Indico are connects them wouldn't the oil water contact be the same. It's difficult to ascertain the true depth (with respect to some datum like sea level ) the oil in the wells but Mariposa is lower (down dip) than Indico I suspect our management would be able to interpolate overall potential volume on what they where hoping for in the first place a 6km channel of oil between Mariposa and Indico. It would be great if the oil/water contact went all the way down the Mariposa.

Ignoring the rights and wrongs.

Interestingly, if we think ahead a little if Venezuela is taken over be politicians favourable to US interests, the main and vocal supporter of the opposition has been Colombia, especially president Duque.

The logical outcome is that trade and co-operation between the countries would increase and it would improve the regions attractiveness to investors (particularly US).

The scenario looks good for Colombia who want to diversify the economy, even talking of selling off part of the state owned Ecopetrol this year. Freeing up the licences they hold could energise the big operators to enter, as could the potential for fracking which is also being progressed to pilot operations.

Ecopetrol are muting a $500m investment in fracking and it's worth noting that Oxy are a world class operator with US Permian interests. I've tried to find out if Oxy are part of the pilot trails which are planned but can't find anything.

The good thing for Amerisur is that whatever they find in the JV blocks Oxy are equipped to extract it and if the Colombian authorities do indeed allow fracking then those blocks may hold something which we have so far not considered - I believe those blocks further North hold heavier oil.

Remember JW said in a couple of interviews that they chose Oxy because of the experience and commitment they brought, not because their was the highest offer

Here's an article from an interview with president Duque where he mentions Venezuela, diversification etcl:

https://www.thedialogue.org/analysis/president-ivan-duque-marquez-colombias-domestic-and-regional-opportunities-and-challenges/

Ecopetrol's new conference call provides a good insight into the overall health of demand for Colombian oil - theirs's is predominantly heavy oil but it need oil like that oil Indico/Mariposa for blending.#

"Bogota, Colombia — Executives at Colombia's state-controlled Ecopetrol said Wednesday an increasing share of crude exports is heading to Asia and that sanctions on Venezuela's troubled oil industry may be a factor in not just higher volumes, but rising prices for his company's predominantly heavy crudes.

"Ecopetrol has become a reliable predictable source of crudes," CEO Felipe Bayon said during a conference call Wednesday with analysts to discuss the company's fourth quarter and full year 2018 results. In response to a question whether US restrictions on Venezuelan oil exports were affecting the Colombian company, he said only that Ecopetrol was seeing "increased deliveries to China."

Executives during the call also noted that the average price for Colombia's basket of crudes had risen since the beginning of 2019 and that Venezuela's problems could be partly responsible.

The destination profile of Ecopetrol's exports of crude and products last year shifted dramatically toward Asia, principally China and India. The region accounted for an average 207,300 b/d of Ecopetrol's crude exports, or 49% of the total, and an increase in volume of 72% from the 120,600 b/d shipped to Asia in Q4 2017.
"
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/022719-more-crude-exports-head-to-asia-while-venezuela-sanctions-may-bring-higher-prices-volumes-ecopetrol

I suspect the consolidation at 17p will prove to have been a very useful pause, clearing out those that want out and got in during the dip towards 10p.

Perceptions of fair value change after a consolidation and I believe in the absence of really bad news there will be no takers much below 17p.

I'm not a follower of charts or buy/sell signals for AIM, but I think the signal is pretty obvious that 17p is where shareholders want to be until we get some further news.

We often get posters perplexed why the SP isn't higher, I would point out that invariably they are not buyers (often sellers) at that perceived fair higher price! It's illogical to expect others to rush to fulfil personal aspirations of others, so I say to anyone that thinks the SP is unfairly valued to put their neck on the line and buy more shares.

I'm expecting great things this year and will be sorely disappointed if the SP doesn't double at some stage as results come in - but patience is required as I'm not a buyer driving the SP.

Clearly some posters take severe offence by the article, whilst others realise it is just par for the course, of no consequence because it lacks integrity - if there were evidence of wrong- doing that would be a totally different story.

Many of us have posted on these issues many times over the years, all companies operating in frontier locations have issues, companies should and must act environmentally responsibly and I expect the companies I invest in to respect the environment.

I absolutely disagree with Strider4 and others that think "so big deal (and it's not even the case here) if a couple of families have to be relocated for the "greater good". It's time to stop acting like the indigenous communities are sacrosanct... ...Don't see why they should get special treatment (other than, of course, setting them up in a new location and ensuring that they have the means to survive comfortably as they did prior to relocation)."

It's their home and we should and can co-exist, the HS2 analogy is ludicrous, the article is talking of polluting a river, try drinking water with poisons in it for a couple of weeks mate.

I have never worked in a frontier country, adjacent to a large river which millions of people used for bathing, drinking and cooking, the locals though the water cleaner than the fresh, purified water on the camp site and actually blamed that for causing illness (illogical like Guardian article). Polluting a jungle has grave consequences - destruction of an eco-system so Amer as short term guests must respect it, - it is precious to us all.

Having said the above I do not believe Amerisur have done anything wrong, evidence simply does not stack up, there will be other polluters on the river including drug producers and the medical case is ridiculous - the article is a non-entity IMO

Coincidentally, I was going to post yesterday about an environmental judgement . "AngloGold's Colombia soil study cannot be halted by mayor: provincial authority".

This is yet another example of locals trying to stop mining and oil project on environmental ground without any evidence. As I've said before the locals are politically (rabble rousing) and financially motivated to object.

"Complaints by a citizen that Quebradona was causing damage in two ravines were also dismissed by the authority after visits to the sites. It said water levels were low because of the drought-causing El Nino phenomenon and noted that the company has a license to divert some waterflow"

IMO, visits from the authorities and appropriate restrictions a great of Amer as it protects them from legal action and the wrath of locals - JWs' head is precious lol. As an example one big US oil has been in court for years over polluting the niger delta, then there's BP etc.

https://uk.reuters.com/article/us-anglogold-ashnti-colombia/anglogolds-colombia-soil-study-cannot-be-halted-by-mayor-provincial-authority-idUKKCN1Q91UQ

It feels like we are on a countdown to a prize draw with the result of the current well, then we are in another draw for an even bigger prize, then who knows. I don't do the lottery so this is the nearest thing I get to the "it could be you" buzz.

A much better prize than awaits us with the other big gamble, the Britex countdown, it looks like either a S*ite Deal or a super S*ite no deal, how wonderful. Whatever you viewpoint on the rights and wrongs (not discussing that) it is clear many senior political figures deceived voters. Anyways now we're in this stupid position, I suppose every Amerisur shareholder is considering how it will affect shares. No?

I believe, hope, it will have minimal/no impact on Amerisur operationally but it could impact to SP to some degree if there is a general sell off as it is dragged into the general distress. I'm quite optimistic any impact would be minimal(if any) and short lived, IMO by rights Amerisur should logically be seen as a safe haven not dependent on the UK or Europe. If they get a deal of course share price might rise.

That is not the case many other sectors and even some oil companies is certain municipalities, IMO everyone should be considering their investment stance, not necessarily taking action, but it seems most are simple ignoring the risk and opportunities - I suspect as we get nearer the end of March it will become a significant topic on BBs but by then it probably be too late to act if the doom and gloom persists.

wrt GT assets IMO Amerisur are located in a much better position as a large proportion of GT assets are located in ELN (rebel country) which is to the West of our Plat assets.

The ELN have been very busy this year with many pipeline bombing and a shootout with police this week, Amerisur have be completely immune to this so far I suppose be luck of geography ,the ELN stick to their own territory where they can hide.

On the same general subject ONGC have tendered for Security services, including gaurd's at Mariposa to protect infrastructure which they are apparently intending to install - it would be interesting to know what they are building their (perhaps it will take indico oil - I suspect it will be a storage hub as they have already established it as a distribution site with suitable access roads and support services.

The reason I mention the tender is that they only want unarmed security, I suspect that if they feared rebels they would want armed guards - I'm assuming it's legal to be armed there as the place is full of thugs.