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An interview intended to reassure the market.

The 2nd ball mill is good news: it is not just because of increased production from the 107,000 to 130,000 (a 22% increase), but because of the high fixed costs spread over more oz., lowering AISC per oz: ie more ozs and more profit per oz. (that can be seen simply by looking at AISC in lower production periods).

It looks as if they are very confident of the high grade Gonka boost in the 3 years coming (as guided in the final accounts) and will meet targets for that period, rebuilding trust.

An interview intended to reassure the market.

The 2nd ball mill is good news: it is not just because of increased production from the 107,000 to 130,000 (a 22% increase), but because of the high fixed costs spread over more oz., lowering AISC per oz: ie more ozs and more profit per oz. (that can be seen simply by looking at AISC in lower production periods).

It looks as if they are very confident of the high grade Gonka boost in the 3 years coming (as guided in the final accounts) and will meet targets for that period, reboosting confidence.

Fever

Good deals and drilling are the answer and that is what the board are doing.

They have, of course, also recruited Nathan Piper to sweet talk the city (and he is likely to do a much better job than Nick Harrison). Perhaps he should be doing the PI rounds at all the usual venues: events such as Oil Barrel last week generate some new investors: interestingly, just about everyone that I spoke to were aware of AMER and watching with interest. He ispresenting on Colombia on 19th September at the Geological society and some of us have booked, to see him in action.

The SLP analogy is a really good one since the slide to 6p was as a result of Miton, a 15% long term fund having to sell down holdings as the fund was decimated by the main fund manager leaving and taking clientele. It has recovered, because it is a profitable company.

The SP here is similarly bombed out by RH/ii selling (and "n" sand result and Calao have not helped the case, but that is the nature of exploration).

Fundamentally, a solid base has been built, with Plat as a grumpy old cash cow, a smear of OBA jam from 3rd party sales, CPO 5 looking spectacular and the OXY deal a real endorsement of the Putumayo acreage.

It is taking time, but Mariposa/Indico are outstanding ($248m NPV: bigger than our current market cap) and so many more opportunities in the block in multi horizons. There could be quite heavy calls on cash and so for that reason, I was pleased that OXY picked up the bill for Put 8. Nobody would want AMER to have to go to the market for cash at this bombed out price: don't knock that cash balance.

The OXY/Putumayo side of things does look to be slow, but for me, the more important side of this deal is that it will provide an easy exit route for the whole company: they have the funding for Putumayo and CPO 5.

Taking a glass half full approach, at least we are drilling this year: Indico, Calao. Plat 26, Sol, 2nd Indico and a side track and that may not be the finally tally for the year. It is the upturn in drilling (with a reasonable success rate, of course) which is the real catalyst for this share, rather than any minor financial engineering: just one of those 3/6 production packs on Mariposa/Indico would do nicely, thank you!

The SNPC % was also mentioned by DS : whether or not, payments would be commuted in return for a greater share.

The conclusion was "both": that payment would be made and that AAOG would have a greater share.

Having considered that, my best guess is it may be a reference to the ongoing situation ( that the existing debt will be honored over time, but ongoing, SNPC will reduce their contribution: presumably, they can get a reasonable share through the new terms, without the direct capital outlay risk?)

It was mentioned.

Sorry to be vague (I was new to all 7 companies presenting and there was a lot of data), but I think that it was in the context of the various routes to market at different levels of production: at 2000, existing/upgrade and at 5000 BP was mentioned.

In the handout, it clearly says on page 6 "offtake contract in place".

No need to be at the AGM. I was at the Oil Barrel conference on Tuesday, when AAOG were presenting and DS was shambolic: he could not even be bothered to turn up on time.

There was a lot of head scratching about the leak through the concrete plug, with the most common explanation being a poor concrete job, which would build pressure in the same way as a small choke size (many of the attendees are not PIs but technical people in the business looking for work/selling product and probably know more than DS, who is, after all, a lawyer and not an oilman/engineer/geologist.

My point is that it is not being "there" to hear what is said, but in this case, understanding enough of the technical aspects to see that there may be less favorable interpretations.

As the saying goes, not for widows and orphans.

Wait
Per the page 5 slide in the recent presentation, $10m already produced and a pre tax 2P NPV of $248m for Mariposa and Indico (per McDaniel & associates).

The scale of what has already been discovered is not fully appreciated: $100m would be an absolute steal just for what we have already discovered.

Over the years, there has been very "shady trading".

The morning of the OBA RNS, this was taken down hard and then the news came through mid morning, not to mention the 10 million trade late last Autumn (day before OXY deal, if I recollect correctly and then the hasty release of Indico, due to a leak........

Sol 1 would be my best guess, but it IS only a guess, based on expected news flow that could have a high impact: perhaps good flow rates, as one would expect from light oil.

"Why are the BOD showing the decommissioning costs per well as so much lower than the previous owners, and why are they accounting for a far far longer life span of each well if not to artificially inflate reported profits and future cash flows?"

It was not a major part of the presentation, but a number of points emerged which were relevant, such as economies of scale and focus.

On the decommisioning, they use their own crews and retire the wells on a planned basis, which will be much more cost effective than randomly sub contracting a crew on a "one-off basis"

The longer life span seemed to come from smarter management, largely using the existing staff, who will have the knowledge but previously will not have been seen as "important": focus will always be on the new producers and tailing off wells seen as the "cinderellas" .

To sum up, old wells, production and plugging, are DGOC's core business rather than being an unnecessary evil.

Not a shareholder, but attended today and of the 7 presentations, this was the standout.

Came across as really financially savvy and a company focused on profitability and ROCE: that rare beast in the oil world, a cash cow, with risks considered and covered (such as the hedging, which can be done because of the relatively stable production and takes away much of the uncertainty).

An odd mixture of a really simple, unambitious plan being carried out in a super efficient aggressive manner, with no stone unturned to squeeze out the last penny from operations/finance.

It made PMO look like a bunch of chancers (all the other presenting companies were earlier stage and so not really comparable).

The GTE update is a bit of a shocker, but much of the reduction is not in the south at all and the road blocks do not seem to be affecting our part of Putumayo: Put 8 is adjacent to Plat and so we would already know if we have these problems.

A less than subtle deramp from you CD?

What is bad for GTE is that they are leveraged and debt/loan conversion can become ugly in these situations. They do still seem to be on an expansionist route, with bidding for new blocks to replace those winding down. Unlike them, we already have our next project lined up without any expensive exploration commitments: done by the former incumbents and future farm outs, whilst we keep our hands in our pockets!.

The risk on Indico is unchanged: Sol is many kilometers south of the Indico find and because they have already drilled that field, interpretation of the seismic is easier: actual rather than projected data now being available.

It would have been better to drill the Indico appraisal as a follow on, but there were the block commitments to complete and that is the bigger picture on CPO 5 (a vast acreage and they have not yet drilled a single well in the south or the north east (the LL 34 heavy continuation trend.

On Put 8, Amer obviously think that it is big news (even though it was so obviously going to happen) and that is why it has been put out today: to wrong foot the market.

It's a bit of a cocktail

Golden bull's post on fundamentals

Gold $1338 , Bloomberg long on gold?
Second mill being installed?
Q2 nearly completed?
No shares left to buy cheap?
New bridge working?
Possible joint venture at second site?
Probable good increase to Life of mine?
Common sense?
SP was 39 p before we poured gold?
Dan Betts superhero?

The point just being made,by Northman 1 and Trusted Investor,that selling down by the IFC will have had an impact.

Those "in the know" will have been shorting on that information and hopefully will now be closing out those shorts (Stock on Loan at the end of May was 9 million, which could be rocket fuel in a relatively illiquid market.

Last and not least, sentiment and how that can turn, be reflected in the charts and bring technical traders to reverse their position or as a signal to jump back in.if they were side lining.

GLA

Management did seem quite pleased with the Gonka drilling and in the near term, that has the most significant impact: blending higher grade and increasing throughput.

The combined effect of those components can be seen in the best quarter to date, Q2 2018, which showed such a healthy "gap" between POG per oz. and AISC.

Focus on Gonka is the right strategy, as profitability in year 3 is clearly more important than extending the LOM in year 6. Hopefully, of course, they will have done both!

Perhaps not: it could be closing out shorts?

Stock on loan high for this type of company (and increased from 2.48% to 2.59% in April through to May) which is an indicator of overall shorting.

Those shorts have to close out, as the SP rises back up to reflect the investment here: currently priced to not even to recover the investment..

It is truly extraordinary that Kefi, a not dissimilar offering in terms of annual production and reserves and with all the cost and risk of building a mine yet to come, can be seen as a better gamble than this?

There have been some good and some bad decisions here over the last few years (with the good including getting the experts, Senet, to build the mine and do the proposed upgrade which is now in progress) and some really bad luck for a first year (security and weather issues), which could to be better addressed, of course.

Ultimately, even a small increase in POG should lift this into decent profitability (and with high fixed costs, getting throughput back on track makes the margin).

GLA

JP2000's post in this thread

"http://www.scottishoilclub.org.uk/190919.htm

Attendance is free but whether open to PIs is questionable."

I had already booked and so confirmed that this could be done through eventbrite. Whilst not specific to AMER, the fact that it is based on Colombia and by our new PR guru, should make it relevant.

Perhaps what we are missing is the difference in the way that majors operate?

Juniors tumble from placing to placing and to avoid a dilutive downward spiral, they have to have drill bit success: they simply do not have the luxury of staking out the whole claim and working at it methodically.

We can see ONGC as pitifully slow, but they have gained so much information on the way. They are starting to crack on now with a well every 3 months: Indico, Calao and now Sol, with Aquila planned. We also know that they have tenders out for land for infra structure to go into production mode. The conclusion to draw from that is that from Mariposa until now has been a two year slog, but that we should soon harvest the fruit of that effort.

Now we see the same trajectory with OXY, who want to kick the match off with 2D seismic and then spend their drilling budget on the basis of that better data. They can afford to do the job properly and bring such a lot of expertise, as well as contacts. The glass half full rather than glass half empty approach is that we were not making much progress on Put 9 and 12 on our own and nothing was planned in the near term on Tacacho and Terecay: it certainly was a transformational deal, but the resulting immediate work program is not as exciting as the well drilling phase.

AMER is fortunate enough to have sufficient cash flow to stand alongside those majors and we have to hope that in due course CPO-5 becomes the next LL34 with the billion dollar price tag and that OXY find the new Cano Limon/Rubiales/Gigante in Putumayo.

The wait, of course, is excruciating and it has been a long haul from the early Platanillo success, which has funded the company to this point and allowed it to acquire such extensive and prospective acreage (along with the prior political situation).

It would be great to get a bit of a boost from success at SOL and I would like to see some activity on Put 8, but expectations probably should be tempered n the OXY deal.

Good to see so many of us booked for Nathan Piper's talk in September 2019: it will show AMER that he SHOULD be presenting to PIs, if we form a large part of his audience!

I have booked through Eventbrite and no questions were asked.

It looks as if it should be very interesting background on our investment and an opportunity to see how effective our communications man is in action: a prestigious location.

To retain the acreage, certain commitments have to be fulfilled and hence ONGC cracking ahead on the exploration wells and seismics: Indico appraisals, however financially appealing in the short term, do not assist in retaining the block.

At least it does mean that they will be consistently drilling, here, in the south and in the north east adjacent to Llanos 34, so an exciting program ahead.

Obviously, two rigs would be the GTE solution, but if ONGC had got a move on with the job post the 2008 award of the block, Petrodorado would not have sold their interest to Amer and we would have missed out on this stellar opportunity.