Member Info for Juxtapose

One difference from Faroe is that DNO had already got to close to 30% in prior transactions in early 2018 and then the great misfortune of drill results: a success on Brasse would have really helped the shareholders achieve a better price.

Here, the BOD have immediately been proactive, contacting shareholders and urging them not to accept advances and as far as we can see, once the flippers departed on the first couple of days, volumes are now dropping and collecting a stake on the market would be difficult (particularly as the BOD and Michinoko hold 16% of the shares). At less than 5%, FIL is not a big enough 1st step and in any event, whist they seem to have some stake in M &P (as declares on the 8.3) even they do not appear to have made any irrevocable commitment yet.

Whllst I was not a holder of Faroe, there does not seem to be any suggestion of competing bids. DNO just stalked Faroe down without distraction, because of that nearly 30% holding: it was all very dirty. What I suspect is that LTH PIs will largely hold from here and that the IIs will back the BOD to let the bidding process take its course.

There is a lot of criticism of the BOD, but most simply do not acknowledge the achievement here: not only a large acreage, but also on trend, hand picked and with the rubbish discarded. Where else are all those prospective new entrants into Colombia going to get the extension of LL34 (or the light oil trend) or the continuity of the Ecuadorean Oriente basin?

My money still on OXY. They already are bedded in with 50% of 5 blocks and want the OBA. CPO-5 (and Plat, to a lesser extent) will be the jam on the top to fund the acquisition/development, just as our BOD had planned.

and you have missed my point entirely, Big Smoke: we already know the CONTRACTUAL position on CPO-5, which will have been set back in 2008 on the original award of the block.

This 199,248 hectare block (gross) is located in the Los Llanos basin (Meta Department) and was awarded to ONGC Videsh in the 2008 ANH heavy oil bid round.

16 Jun 2010
Petrodorado Energy has signed a farm-in agreement with ONGC Videsh for a 30 percent participating interest in CPO-5 Block of Colombia. The CPO 5 block is flanked in the North and North West by the recent discoveries in the blocks of Guatiquia (Candelilla Structure) and Corcel.

"The assignment of the participating interest to Petrodorado is subject to ANH approval." ie normal rules for disposal/part disposal of an interest in a block.

When we bought the whole company in 2015, no such "subject to ANH approval" was appended to the RNS, because it was a corporate action and NOT covered by any contractual term back in 2008.

From looking at other total company acquisitions in Colombia, it does not appear that ANH does get involved at the corporate level: I have taken the trouble to track down a couple of other examples.

If you think that ANH does get involved in corporate activities, then it would be helpful to provide examples and share that information.

One other aspect in a relatively complicated legal situation (and for most of us, a jurisdiction in which we do not have detailed working knowledge) is "control", often defined as management. Everyone assumes that JW will retire, but it is not impossible in a whole company takeover scenario, that he is retained and on more than just a consultancy basis. Anyone putting a decent value on this company as a whole, must surely recognize that the man who built it, is also one of its major assets?

It is interesting to see other posters views on valuation. For my money, I see CPO-5 as our most significant asset: the new "shinier" Platinillo, because of its production stability per well and capacity for significant near term increase (as seen by the tenders). For that reason, I would have little near term appetite for a truncated AMER, with CPO-5 thrown to the wolves.

If you contract with Juxtapose Ltd, Big Smoke, it would be extra ordinary if you were to "pierce the veil of incorporation" and look behind the company to management/ownership. So, when I sell "Juxtapose Ltd" (as I have) it is just tough on you: you contracted with a company and unless you have some exceptional Ts & Cs, your recourse is to deal with the new management/shareholders through the courts.

I don't disagree that there may be some right of veto in Colombian law and acknowledged that in my post, but from available evidence on AMER and other companies, the active merger and acquisition corporate market in Colombia seems to take place without requiring ANH approval. That information is based on RNSs, which I assume would contain such information if it was applicable.

The fact that we know for certain is that sale of assets always requires approval, even if it is to the blue chips such as OXY, as per RNS. It does make that a less attractive route (along with tax consequences).

It would be helpful if the company was to clarify such issues and I would expect them to do so when any bids are received, as it affects both timescales and the amounts we receive as shareholders.

It did not, when we bought Petrodorado:


29 June 2015
Amerisur Resources Plc
Acquisition of Petrodorado South America SA

Amerisur Resources Plc ("Amerisur" or the "Company"), the oil and gas producer and explorer focused on South America, is pleased to announce the acquisition of Petro Dorado South America SA (PDSA), a subsidiary of Petro Dorado Energy Ltd (PDEL).

It was required when we bought assets:

20 December 2016
Amerisur Resources Plc
Colombia Asset Acquisition

Amerisur Resources Plc ("Amerisur" or the "Company"), the oil and gas producer and explorer focused on South America, is pleased to provide an update on corporate activities in Colombia.

Put 30 and Put 9 Acquisition

The Company is pleased to announce the closing of a transaction with Talisman Colombia Oil & Gas Ltd to acquire, subject to approval from the Agencia Nacional de Hidrocarburos ("ANH"), the remaining 50% working interest in the Put 30 contract area and a new 40% working interest in the Put 9 Contract. The application for approval to ANH includes the appointment of Amerisur as operator of Put 30. Put 9 is located immediately to the north of Put 12 and to the east of Platanillo and is operated by Meta Petroleum Corp. with a working interest of 60%.

The issue about operatorship follows the same rules. Where ONGC is operator, nothing changes. Where AMER has operatorship it still will.

I take the point that the govt. may have some say over strategic resources in mega mergers and acquisitions, but have not seen that exercised on other deals, such as petrolatina or, indeed, the company sales to us.

Splitting the assets up does cause problems : Tacacho, now 50% OXY, is bundled up with 30% of CPO-5 in Petrodorado and that is going to be true of most of the assets and many acquired from more than one source at different times

If it is a sale of the company (ie a sale of shares) then the Colombian govt. have absolutely no say in the matter: that of course is not true of a sale of the parts, when asset transfers require approval..

Clearly the timetable changes if the bid is recommended. What then might drag it out is if competing bids come in, but that should not happen if the BOD really push for best and final offers in the bidding process, but there are no guarantees on that (particularly with likes of OXY of course).

Largely, all parties are experienced operators and with knowledge of the Colombian opportunities (some probably with better knowledge of specific assets than AMER) and as so offers might be quick.

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.

LC

It may not take that long.

One successful strategy in these circumstances is the quick knock out and close bid.

Anyone in foreign currency (probably everyone) will be looking at currency exchange and seeking to maximize that discount, which could have an optimum window.

No mention of GTE in any media?

CD

You are right: it is just listed on the French exchange, but such a derisory offer. I don't see support from any IIs for this, apart perhaps from FIL, who simply want out. It will be interesting to see how far they have sold down. The last couple of days has provided an easy out for the disaffected.

That last Morning Star link from you makes a handy comparison with currently declared positions, so thanks for that.

Contrary to assertions, all the notifications coming in so far show that the IIs have been increasing holdings.

Slater, Hermes and Canaccord (HH bought out) all show higher than previously declared holdings.

River and Mercantile will be interesting as they have always traded this share, with holdings up and down, but within the 5/6% banding.

Very bullish response from the market today and the company.

What possessed the frenchies to make such an offer?

Why would the IIs support a lowball offer?

Michinoko plus board have 16% so with any support from other IIs they hold the cards

Margaret

You cannot make that kind of accusation re a specific company without evidence.

What you will see over the next 10 days is that everyone with 1% + will make an opening disclosure dated 18th July 2019 and that does not mean that they recently bought shares: it means that is the accumulated holding up to that date and re Slater, the 6 million could have been added any time between 1st January 2019 and 18th July 2019 (and were probably bought over time).

It is ill informed to suggest otherwise.

Whilst I agree that there were a number of large purchases during the latter part of Wednesday and Thursday (just after I had commented on the generally low volume!) we will not be able to pin those trades on anyone simply by looking at the opening positions declared. If you are concerned, you should report it to the authorities (along with the 10 million the day before the OXY deal).

Slater Growth fund had 12,503,900 ie 1.03% at the 31st December 2018 (source: Morning Star) so no, not insider dealing: a smart fund manager who saw value before the herd.

Whilst we don't know what they will accept for their shares, we do know what they paid.

Last placing 2016: 25p for IIs still holding.
Michinoko took their last 3% in April 2017 so around 22p
River and Mercantile substantially added holding in 2017 18p/20p/22p range.

So, add a margin for 2/3 years use of capital and that gives a bottom line.

Ultimately, Michinoko and the BOD hold over 16% which is a good way towards 50% and also sufficient to block the compulsory acquisition of minority interests.

Rossannan, the mantra is getting a bit dull: do you have anything new to add to the debate or are you going to spend all day "bashing" our investment?

Equally dull is my continued request to you that you look at the Petrolatina deal done by GTE, our probable predator or his most recent Vetra acquisition, where GG was not shy in putting his money on the table for what he wanted.

The Petrolatina deal is a really good comparison with AMER: huge near term potential and worth $525 million to GTE, regardless of its last recorded price. GG's judgement has turned out to be sound and the asset has been spectacularly successful.

One of the aspects of this situation which has to be considered is ego.

The recent debacle over Put 8 may very well have sparked great annoyance at AMER management, who snatched the jewel out of GTE's Vetra deal crown, only to hand it immediately to OXY. Most would not realize the value of this block. According to JW, at the AGM, this is the sweet spot, with heavy and light oil and the rest of that Vetra deal at $104.5 million was rubbish. Those are dangerous words to bandy about at the expense of the CEO of GTE and this may well be payback time for AMER management.

Equally, no-one would accuse JW and GC of being short of an ego or two and this is their swan song. It is not just about money: this is the final episode in two very colorful careers and it is difficult to see them scurrying off with their tails between their legs. Deals, as everyone would agree, seem to be their specialist skill and so we should expect to benefit from this.

Finally, of course, there are a lot of long term individual shareholders, as well as institutions in at levels much above this: Michinoko's last block was in the 25p range, so they seem unlikely to sell themselves short and so any company sale at a low value would be voted down. A lot of investors, like myself, would far prefer to wait until CPO 5 moves forward (now under the cosh to fulfill the minimum requirements to keep the block and so forced to drill) and that will provide immediate upside.

It will be an interesting few weeks and even if the "for sale" sign is taken down, we still have to expect that we are in the final stages and that we will get taken out in the not too distant future: the genie does not go back in the bottle.

Rossanan

You don't seem to understand the Petrolatina transaction: 20 times its last quoted price and for potential rather than production. That is pertinent, since it is indicative of the GTE bullish mindset and as Lucy pointed out, the savings from synergies will be substantial.

This BOD will only sell if the price is right, because they do not need to sell.

Why would anyone accept a price that is less than that on completion of the OBA (early 30's) or the Mariposa discovery (27p from recollection), when so much has been achieved subsequently and is now coming to fruition: the pre tax 2P NPV of Mariposa and Indico alone is $248 million dollars and that is just part of CPO-5 and posters here talking of $100 million for that asset......!

The real madness is selling a billion $ company in the next year for half a billion now.

As you have had multiple responses to your question about how often significant premiums are paid on acquisitions over on ADVFN, why not, for balance, share such information over here?

In summary, both GTE and OXY have a track record of paying value for what they want and as they probably both have hats in the ring here, we could live in interesting times.

A really interesting post by Quidnunc (one of the old brigade) reminding us that we are cash and asset rich, that this is not a distressed sale and that we have been approached and that is the only reason that any consideration is being given to this matter. There is a balance of power in favor of the seller, when the purchaser makes the approach and particularly when more than one hat is in the ring, as appears to be the case here.

One thing that we all do know, is that GC, JW and AS all have sold businesses for top dollar and AMER is a fabulous opportunity, with CPO-5 on the cusp of going into production and so many opportunities in the near term pipeline. Any purchaser is going to have a struggle to put the "sales case" forward without a substantial price tag for the assets. We can get to 37p ourselves, according to Stifel, so why sell for less?

Everyone also has to disclose any existing position over 1%, opening positions, so that will make for interesting reading over the next 10 days: that is what Slater were doing.

It is worth just taking a look at GTE's 2016 acquisition of Petro Latina and comparing the component parts with what would be gained for them by the purchase of AMER.

Whilst GTE really wants the Putumayo, CPO-5 would be a nice little near term earner and pay off the credit card bill over time.

Presumably, ONGC and OXY are the "parts" bit of it and I am still backing OXY: ONGC are far too dozy to get out of bed (and would probably need to put out to tender, writing out a cheque).

If we have to go down this route, I really do hope that this is a clean sale of the company, as that is by far the better way of getting cash back to the shareholders. Otherwise the taxman gets double dip, first on the sale of the assets within the company and then from individuals via the dividend regime (depending, of course, on whether or not the individual is holding the shares within a tax efficient wrapper).

Personally, I feel that this sale is too early, given the promise shown particularly in CPO-5. To justify any such sale, the offer needs to be one that is too good to be refused.

July 1, 2016
Gran Tierra Energy Inc. Announces Strategic US$525 Million Acquisition of PetroLatina Energy Ltd. in Colombia

All dollar amounts are in United States ("U.S.") dollars unless otherwise indicated.

CALGARY, ALBERTA--(Marketwired - July 1, 2016) - Gran Tierra Energy Inc. ("Gran Tierra" or the "Company") (NYSE MKT:GTE)(TSX:GTE) is pleased to announce that the Company has entered into an agreement (the "Acquisition Agreement") to acquire PetroLatina Energy Ltd. ("PetroLatina") for cash consideration of $525 million (the "Acquisition"), consisting of an initial payment of $500 million at closing, subject to closing adjustments, and a deferred payment of $25 million prior to December 31, 2016. PetroLatina is a private, independent exploration and production company with assets primarily in the Middle Magdalena basin of Colombia.

"The Acquisition represents a unique material opportunity in Colombia in terms of scale and upside potential, and will add a new core area for Gran Tierra in the prolific Middle Magdalena Basin," commented Gary Guidry, Gran Tierra's President and CEO, "The combination of Gran Tierra's strong, positive cash-flowing asset base and PetroLatina's attractive portfolio of development opportunities will create a premier Colombia-focused exploration and production company."

The Acquisition is expected to be funded through a combination of Gran Tierra's current cash balance, available borrowings under Gran Tierra's existing credit facilities, a new $130 million debt facility, and a private placement of up to $173.5 million of subscription receipts ("Subscription Receipts") priced at $3.00 per Subscription Receipt entitling each holder thereof to one share of common stock in the capital of the Corporation ("Common Shares"). The pricing reflects a 7.9 percent discount from the five day volume weighted average price of $3.26.

"Our balance sheet and financial strength along with low cost operations allow us to execute on our growth strategy in a low oil price environment," said Guidry. "We are acquiring significant proved, probable and possible reserves in a new core area in the Middle Magdalena basin which we expect to enhance our long-term growth strategy and to be an excellent fit with Gran Tierra's current reserves and resources base in the Putumayo basin."

Below are certain transaction highlights relating to the Acquisition.

Key Transaction Highlights(1)

Growth platform in Middle Magdalena basin with significant proved plus probable ("2P") reserves additions of 53 million barrels ("MMbbl") (100% oil), increasing Gran Tierra's pro forma December 31, 2015 2P reserves by 70% to 129 million barrels of oil equivalent ("MMBOE")(7)
Complementary acreage positions in Middle Magdalena basin, Llanos basin and Putumayo basin; addition of 469 thousand working interest ("WI") acres across Colombian portfolio
Expected PetroLatina H2/2016 WI before royalties 2P average daily production of 5,400 barrels of oil per

It will be interesting to see all those who have been accumulating recently declaring holdings.

1st up Slater, who only had 12,503,900 (1.03%) at the end of 2018.

I presume that the 1st offer has come from GTE: it would have been difficult whilst Dana was still alive, given the history.

Many of the BOD with experience in excellent exit deals, so we have to trust that they are aiming high and would not have entertained derisory offers.

Michinoko's last 3% and the 2016 placing at 25p and that must set the bottom.

Recent highs of 20p will also rule out any derisory offer.

So much for the theory that this would be a management buyout for peanuts.

Overall very disappointed that this has happened before greater maturity: it feels like selling the Derby winner before the race.