Member Info for JP2000

Hopefully no discrepancy this time between AMER & ONGC on net pay column as happened on Indico. AMER put this down to resource cut off criteria which may or may not be true, but you'd think they were both aligned, it could cause issues if the results are marginal.

Re point 1: a) LS3 probably reached 2 weeks ago if not earlier. b) LS3 cores would also have been recovered so they’ll be 80% certain before (or if) wireline.

Another thought, better announce Annual Reserves pre Calao then any upside from Calao is incremental. If they’d announced AR post Calao it would have confused matters reporting a lesser amount than everyone knew to be the latest situation.

There’s an element of news management; perhaps Calao is taking longer than anyone thought (agile and ONGC are not two words often put together), or perhaps the news flow is so intense they decided to regulate flow, there could easily be 8 announcements in the next 6 weeks.

PP: in your experience when drilling starts does it tend to be a continuous operation (24/7) until TD or is it more sedate 9-5 weekdays? Does the crew work 2 weeks on 2 weeks off or similar?

The manipulation is almost like price stabilisation but then why?

A prelude to fundraising? JW says not necessary

To stop wild speculation?

To keep the SP in check until they've got more info on CPO5?

Fingers crossed it turns out to be the game changer we all hope. The point I'm trying to make is AMER could spend 10 years developing CPO5 slowly using retained earnings but in reality I'd prefer they spend $200m over 3-4 years, wait for a spike in oil/sentiment and then exit.

Suspect the majority of Geopark's 95 drills facilitate production rather than exploration (even Platanillo has 20 wells producing a meagre 3-4000BOPD). CPO5 block is x6 larger than Lanos34 so it could easily take 30-50 drills per year for the next 5 years, 6 drills/rig/year, $2.5-3m/drill net to AMER (less with scale).

Self funding is partially true but the shear scale suggests gross CAPEX $150m/year (net AMER $50m/year)

N2M, BOD have over promised and under delivered but whether incompetence or poor PR is questionable. Its a risk game and drills like N Sands happen which then meant they abandoned further drills. Where the BOD have not helped themselves is in postponing drills due to M&A/commercial deals and then not adequately explained things to the market.

"Q4 Production and OBA throughput

Total production in the fourth quarter from the Platanillo and the Mariposa fields was 423,386 BO, with an average daily production of 4,602 BOPD. Platanillo production was impacted by completion issues in Platanillo 22 and 8, which occurred during interventions. These wells have now been evaluated and are currently being treated to return them to production. Further well interventions are planned on 24, 21, 25ST1, 17 and 7 as part of the normal maintenance and optimization operations in the Platanillo field. Current group production is 5,426 BOPD which includes the Company's share of the production from Indico-1X.

OBA throughput in Q4 was 236,833 BO with average daily throughput of 2,574 BOPD. This was lower during the fourth quarter owing to the phasing of 2019 Government royalty barrels ("Royalty Barrels"). Royalty Barrels are collected at the Platanillo wellhead and transported by road. The Government elected to take delivery of its 2019 Royalty Barrels disproportionally in Q4, leading to lower utilisation of the OBA in Q4.

As a result of lower oil prices in the fourth quarter, the Company decided not to make sales from Platanillo in the month of December, and instead chose to store produced barrels for sale at higher oil prices in the first quarter of 2019. "

Platanillo has reserves to support 4,000B/d production for the next 12-15 years. Holding back sales on a low oil price would have coincided with downtime for repairs and its not like AMER is short of cash.

Q1 production is out around 7th April.

Posted on twitter yesterday, a contract for 5000/b/d

https://twitter.com/EPPETROECUADOR/status/1102961976186204164

They don't give running commentaries and certainly wouldn't say if the drillbit was still turning.

As it happens JW has produced some excellent deals which make sense long term and in relation to an exit strategy (i.e. sale), but short term is about tactical execution.

so market risk appetite is currently low (not surprising given the B word) and only values cash, cash generation and 2P. We need a bit more emphasis from JW for 'does what it says on the tin' rather than chasing the next corporate deal. Lets hope as a minimum they achieve the 2019 drill plan.

Some may see this as pedantic but:

10th Dec Indico discovery - oil column
2nd Jan short term flow rates
22nd Jan interim reserves update
6th Mar annual reserves update as of 31st Dec

They can't possibly have known the official CPO5 reserves at 31st Dec because otherwise they would have stated it 2nd Jan and there would have been an obligation to report material price sensitive information.

It doesnt change anything and the bigger picture stuff says (no pun intended) the situation is fluid and likely to materially change in the next 0-9 months but nonetheless this is the second discrepancy spotted in the last 2 months.

News flow moves small cap SP and there could be 5-9 separate pieces of news in the next 5 weeks (some will be combined in RNS statements) so unless Calao is spectacular I expect to see a gradual rise building on each piece of news.

There's a lot of factors in play:
ONGC (senior partner) control timing.
McDaniel are independent consultants, resource cut off criteria are more onerous than ONGC (evidenced by Indico 1).
Its only partly about Calao (2-10 MMBO), also or finding the OWC, exploring the limits of LS3, expanding Indico resource.

Busy times ahead:

Calao 1 terminal depth, logging, commercial oil? net column height, OWC level, date range 5th-15th Mar, most likely 11th Mar based on previous drills.

Calao flow rates + 10 working days, est 22nd-25th Mar.

2019 Annual Results, did someone on LSE confirm 4th or 5th Apr?

Calao reserves update +10 WDs after flow rates, est 8th Apr. Could impact Indico reserves.

General reserves update; historically issued 1st Apr relating to 31st Dec (end of year Balance Sheet statement) but material changes post YE so not sure, est 8th Apr. Unclear whether update 22nd Jan was the annual or an adhoc interim update.

Q1 Production update 7th-14th Apr. Could be combined with YE.

Pavo Real-1 spud est 1st May.

Unspecified:

OBA third party oil purchases

Update on Miraparriba-1, potential option to purchase Vetra stake 14th Mar?

CPO5 second rig news – dependent on Calao results?

Platanillo enhancements news (probably covered in Q1 update)

ONGC statement if Calao significant (Indico was a month later than AMER)

Its not easy to find info on royalties & x factors, does anyone know the X Factors for:

Platanillo
Mecaya
Terecay

My understanding of the others is:
Andaquies 0%
Coati block exploration area 0%
Coati Temblon Field 0%
CPO-5, 23%
Put-12, 29%
Put-14, 5%
Put-30, 4%
Put-8, 2%
Put-9, 22%
Tacacho 0%

(All figs exclude royalties)

Currently on net 2484 BOPD from 2 wells

5-10k guestimate, even the low end generates $25m cash.