Member Info for JP2000

Its the opportunity cost that's annoying and if you knew the timetable then at least you have options. Famous last words, we should hear something in the next two weeks.

probably delayed trades

New instructions were issued on 11th Oct, what's is(was) the likely bid submission date? 25th Oct (+14 days), 1st Nov (+21 days), 4th Nov (+24 days), 8th Nov (+28 days) are all feasible.

Col, thing is maybe one of the indicative bids is higher than 29p and the purpose of the RNS was a warning to say unless you have proof of funds then BoD will ignore your bid.

Putting reservations about the source to one side it seemed well written and plausible with no sense of hype.

Also GTE paper might be down as per sector but plenty of upside should they offer cash & shares.

EU & WTO competition rules prohibit large subsidies or state aid.

If the project's a goer then banks will support.

AMER's oil tends to be light crude which demands a premium price & BoD refer to Brent pricing.

The slow progress simply reflects ONGCs corporate culture and is misunderstood by many PIs. I get the feeling ONGC Videsh (the overseas arm) exists for Indian prestige rather than cutting edge of exploration, there's evidently little drive and a sense of being out of their depth in a global perspective. There's a scattergun across the globe designed to plant the Indian flag rather than building meaningful production in any one location. In Colombia they've plenty of licences but are working at a snails pace on relatively small targets, it just doesn't seem like a coherent strategy for a large commercial organisation (Colombia works for AMER but its low down in the food chain).

The most plausible explanation for ONGC's pace is resources $, a small company like AMER takes 5 years using retained earnings but ONGC is a different level of bureaucracy, we assume Colombia is run as a standalone entity whereas they're a branch with defined pots of money agreed 6-12 months beforehand by committees at HQ in Delhi with no room for manoeuvre. In Dec 18 I bet JW was sipping tea with his opposite number at ONGC Colombia, both excited by the results but unable to accelerate the work programme, JW wouldn't have dared fly to Delhi without it being sanctioned by ONGC Colombia first. No doubt friendly words were exchanged in Delhi but the bureaucracy wasn't moving regardless of the business case even though a second rig is small beer in a global context and made obvious sense to AMER.

Frustrating for AMER shareholders but then why set the hares running for something you can't control. Perhaps JW was naïve though maybe he wanted to influence the 20-21 work programme likely to be announced in Q4.

AMER were granted exemptions of Rules 2.4(a), 2.4(b) and 2.6(a) of the Code because they expect multiple bidders (rumoured 7-8) which is great news for shareholders. $400m-$600m isn't peanuts, the technical due diligence takes time and what does it really tell anyone, 2P 26m and perhaps 600-800m mid case resources. In a highly competitive bid situation you're never going win unless you make aggressive assumptions.

I imagine bidders are given 28 days to submit sealed bids otherwise the first bidder would be at a massive disadvantage if their identity and offer were disclosed, therefore shareholders won't get a running commentary, we might hear "bid(s)" have been received but not the amounts or bidders, potentially there might be no news for another 3 weeks.

You mean resources. Reserves are independently calculated by third parties to international standards. Resources are a finger in the air based on seismics and local geology.

Any thoughts what the strategic review does to the current drill plan, is it on hold to conserve cash or full speed ahead to firm up resources?

If there's 6 bidders then you offer your best price whereas Maurel assumed they were the sole bidder (and of last resort).

The only downside is if Oxy & ONGC do nothing and happy with their existing stake but is that realistic, probably not.

Suspect its pumping station issues, could be OBA or in Ecuador pipelines. Production is occasionally slowed/stopped when they're drilling a new well from a production head. AMER's tanks continuously filling up from wells so the 5k days are simply catch up and its generally averaging 4000/day.

It was 12p due to a couple of IIs selling down, partly cyclical bearish on oil sector, partly because BoD had failed to deliver drills over the last 3 years.

The starting price in any auction is irrelevant, the market is the market.

In terms of production growth over the last 3 years then you have a valid point but I'm willing to bet production around 10,000 bopd by year end.

The strategy over the last 3-4 years has transformed AMER's prospects in terms of acreage and prospective resources albeit at some short term cost to production and the share price.

AMER has cash in the bank and no debt so there's no cashflow issues or default risk.

I'm happy to sit back and wait for Q4 & Q1.

How can you possibly say "management are sitting on their laurels and next to nothing is happening" ??

Management don't control the CPO5 drill programme, they have a veto on the overall plan but not the day to day programme including number of rigs. CPO5 is uncontrollable by AMER.

Nothing moves in Colombia without regulatory approval including corporate deals, environmental engagement, building drill pads & access, seismic, the actual drill plan, use of the OBA. Its very slow so wouldn't be surprised if it takes years of planning to get a single drill.

Put 8 was ready to go though most PIs thought the Vetra purchase was a good thing but its probably pushed the plan out by 9-12 months.

Platanillo is going relatively well.

3rd Party OBA doesn't look like its started despite the announcement.

I'm obviously reading tea leaves to make this prediction:

Put 9 Coendu1 Q4
Put 9 Coendu2 Q1
Put 12 Coendu3 Q1 (contingent Put 9, X factor 29% so only drill low risk/high return targets)
Put 8 Miraparriba-1 Q1-Q2 (delayed, regulatory approval for the farm out and new drill plan, lead time for approvals typically 6 months)
CPO5 Mariposa 2 Q1

The directors have bought plenty of shares over the last 12 months so why is anyone puzzled?

The relationship between external factors and the share price is known as the beta and yes there should be a relationship to oil and to a lesser extent exchange rates.

The contracts with the Colombian government contain a high oil price clause which is rarely discussed but is essentially a gainshare. We can only guess how this operates and the implications to AMER but I suggest it has a detrimental affect on the beta.

Despite its age, AMER is relatively immature and does not pay a dividend yet, therefore investors do not immediately benefit from higher oil.

Rightly or wrongly many PIs assume AMER sits in an efficient stock market but ultimately the share price is a function of supply and demand which is driven by numerous factors including sentiment so what you're complaining about is why S>D?

Lack of critical mass so AMER isn't on the radar
AIM v Main Market
Corporate governance
Operational delivery
Dividend model