Member Info for JP2000

Gary, I expect to be bludgeoned to death for saying this but you're not wrong re 'big talk' and here's a flavour:

Geopark 90% hit rate on Llanos34
Continuation of trend into CPO5
AMER themselves tweeted about Llanos34 production last week
JW 'significant upside to 2-10mmbo'
Finding OWC important for Indico...exponential impact on reserves
'300ft column doesn't just materialise...must be connected to something'
Part of a regional play
Etc etc

Cherry on the top from JW today is we lost $1-1.5m cash on Indico from reduced flow rates and so probably another $2-3m when the other directional wells spud. He kept that very very quiet and a learning point for all of us. And, he's basically trying to buy time to re figure out the seismic on the peripheral prospects because if they fail the smelly stuff hits the fan (slightly unfair as not priced in but the market likes to over react)

I valued Calao around 1.5 pence per share based on 30% of 3000bopd, using NPV 5Y at 10% but it was never about a silo drill (2-10mmbo) so the SP fall is absolutely justified.

BBN: what are you thoughts about the prospectivity of LS3 bearing in mind no OWC and no WC? Is JW blaming dodgy seismic as it was meant to be a similar level to Indico.

Re over reaction: It is and it isn’t. In relation to a 2-10mmbo target then complete over reaction but a regional play in the LS3 20km long and 5km wide just got called into doubt.

Ran a search for “twitter Amerisur” and it came up with this but any reference to AMER is behind a paywall. Has AMER been bidding for new blocks?

http://www.bnamericas.com/en/news/colombia-upstream-call-attracts-potential-bidders

http://www.controlhidrocarburos.gob.ec/wp-content/uploads/2019/03/Prod-Mensual-Fiscalizada-20-MARZO-2019.pdf

Credit to someone (?) on advfn

You know Plat’is on its knees at the moment c1800bopd, I know it’s due to maintenance and they didn’t write off any reserves but it should be 3500-4000bopd.

Baysil, assuming Fri or Mon RNS, given the drill time are you expecting pre or post flow testing?
Thanks
JP

The share price manipulation adds fuel IMO. Not talking about shorting, or range trading but manipulation. Look at the trades today 98% AT.

PUT 8 currently has 2d seismic and nothing is proven whereas Stifel blindly assumes 100% success with the first two wells so AMER shareholders are carrying the risk. Remember Platanillo N Sands?

CAPEX requirements for CPO5 ramp up substantially in 2020, is it all self funding?

To some extent, 3 rigs (18 drills) net cost to AMER $54m, requires 90% hit rate in 2019 and most importantly no delays.

What isn't self funded is production CAPEX; land acquisition, a new pipeline, production facilities, production wells. What's the damage? gross $300-450m, net to AMER $100-150m over the next 3 years.

Does the Oxy deal increase reserves?no, possible though towards end of 2019

Does it increase unrisked resources? No in fact it decreases resources by c3-400mmbo.

Does the Oxy deal increase EBITDA in 2019? Not in any material sense.

Whilst I support the Oxy deal until it crystallises value then not really surprising it’s had negligible impact on SP.

JTD: suspect JW is tip towing around ONGC not wanting to aggravate Dehli for obvious reasons

PP: they’re definitely there, slide 7.

http://www.amerisurresources.com/images/rns-pdfs/Investor-Presentation-Feb-2019.pdf

AMER Feb presentation slide 7 & 18 gives more detail.

The pipeline is new, probably 40km @ $2m/km for LS3 once it’s all joined up.

Necessity of the Work
Development and exploration of CPO-5 block is presently at full swing with recent success of commercial hydrocarbon in Mariposa-1 and Indico-1X well. Building up the surface facilities for commercial production from these wells need construction of roads, production facilities and drilling location areas for exploratory as well as development wells. Presently 10 exploratory locations have been proposed/released in different areas of CPO-5 block in addition to land required for oil production facilities, of discovered wells.
According to Colombian legislation (law 1274 of 2009, Permanent legal entrant for hydrocarbon projects) a land negotiation processes and a constitution of servitude must be implemented in the areas selected for the construction of exploratory / surface facilities. Several activities must be executed including an independent land cadastral diagnosis, negotiation, acquisition and servitude constitution, which incorporates support from negotiation, land management and legal personnel. For this purpose, a legal firm needs to be hired for the execution of all these activities. Similar procedures have been followed in land negotiation and servitude constitution in other well locations of the block.
According to approved work program of CPO-5 block in 2019 two exploratory locations were firmed up for drilling. But with the major discovery in Indico-1X well, brings up new scenarios for drilling of at least 4 wells in 2019 in NW part of the block. The joint development of Mariposa-1 and Indico-1X and possible lay out of oil pipeline increases the LAQ work by multiple times.
In SE part of CPO-5 block, 4 exploratory locations are lined up for early drilling within extended phase II period of the block.
Therefore, all relevant documents are needed to be in placed in order to guarantee the drilling and development of the block without any delay. It is imperative to establish the land negotiation and servitude constitution before executing any construction job in the area since it is a legal requirement. By executing these procedures, will help ONGC-VL to saving time and adhere to the timelines of WP & ANH.

"I mean have they found the OWC layer anywhere in the whole block ?"

Yes at Mariposa1, the LS3 is at 11175-11400 so 1500ft deeper than Calao/Indico. Strangely it was meant to be a 12800ft drill but they stopped c11800. AMER haven't publically stated the OWC level but Feb presentation says "OWC rose only 10ft after producing over 1MMBO – reserves upgraded by 1MMBO and further increases expected
"

PIs are suggesting ONGC will go deeper than 12,000ft, to what practical end? The LS3 in Calao/Indico c9800-10100 is the oil reservoir so if water isn’t found between 10100-12000, is going another 2000ft to 14,000 going to make a jot of difference, drilling to 12000 and finding no water is the answer to OWC question.

Production figures are out in 3-4 weeks but Platanillo was certainly operating at 3500bopd in Jan and no major or unexpected changes to reserves (last week).

We dont know the contractual position regarding access to data but it seems reasonably clear either party can make their own interpretation. Then there's the relative materiality and market reporting requirements which both suggest AMER will announce muxh quicker than ONGC.

The final trade at 16.29.59 is often 1 share but tonight its 23 shares! is this a secret MM code for tomorrow?