Member Info for pickedpeck

In for 250k today. Looks like a pretty solid recovery play given the asset base, FCF, and apparently supportive creditors. Books were bad because of the impairment charge rather than the underlying fundamentals which whilst they have clearly declined don’t justify the current price.

I see a few familiar posters here, should be an interesting board to watch for the next few months?

50cc - The direct impact of the drone strikes on production can be mitigated I agree. However in oil traders minds is going to be ‘what next?’ . This attack was both low tech and low cost making it highly repeatable, and is also very, very hard to defend against. The Saudi oil infrastructure has shown to be vulnerable, and in the Eastern provinces where there is considerable Shia support for Iran this type of strike could well become recurring.

For example the East-west pipeline runs for hundreds of miles on the surface across open desert from the big fields in the East to the Red Sea ports. 5m bopd flows through that, when it broke down a few years ago oil spiked double digits! These are targets which are not hardened or militarised, this could all become quite dramatic quite quickly.

Just - could be, but 25% of production on the field seems steep. What’s the 2019 liability I wonder?

Transport costs interesting too, not so long ago this was in the high teens when everything was being trucked

I’m with CD. I think they exceeded my very limited expectations with these results. Think you’ve lost the plot a bit JTD, the market reaction is effectively neutral.

ONGC are plainly not playing nice now, and AMER are essentially saying so in these results. Not being able to pin down a spud date for Indico 2 is purely down to ONGC not playing ball, I doubt there is any effective recourse AMER management have to drive the program. This is a lower commitment to drilling than they will have previously committed to AMER.

Put-8 will be on ice pending ANH approval of the farm out, that’s typically taken 6-8 bureaucratic months previously. Again not sure what they can do there.

They royalty barrels collection on Platanillo is the big driver for the results delta. Was this a liability in the FY18 books? Where was it? How come it’s quarter of a million barrels nearly, the x-factor on Plat is nil? Any insight on this? Not happy about transparency here.

The key word is competitive. That means competing bidders, and a prize at the end. It also implies a degree of competing offers in principle already worth talking about. From this point it’s just about patience, no one will be able to second guess the detail but it seems highly probable the process will conclude with a deal or deals.

They won’t be able to drill PUT-8 until they have farm out approval front ANH. The actual question should be does having operatorship add to or reduce the net asset value of the block. Personally I think it increases it under a sale process.

Everything that can be said has been said about 27 times over. No one can really second guess the offer price or timing

The dilution is so small to be immaterial. For example 3m options at 15p against a (current) share price of 17.4p is a net effect of 3m x 2.4p , or £72k. Remember they have to give the company (us) the 15p cash to buy the shares. If the company sells for say 30p then it becomes £450k but the company would be £364m, so only just over 0.1% actual dilution. If they get me 30p a share I don’t care that much.

The point I was making was that the buyers will very likely pay out on the unrealised options regardless of the exercise date. I know it sounds counter intuitive, but that is the way most transactions seem to execute in recent times.

9m shares marginally below market price doesn’t dilute 1.2Bn by much even assuming they have the cash available to make the purchases, so that ticking sound is probably your watch. Incidentally most transactions will already take into account unissued rights, so the time they effected the sell price was when they were granted not when they come into effect.

The big question is, if you can use money to influence mass numbers of individual voters through omnichannel campaigns (Russian owned press, social media, oligarch TV) who do you trust to vote as part of an election? The uninformed no longer trust the more informed because of what they are told directly by media focused on them.

The same is true of the market, a lot of investors have never run a large business, traded internationally, understood ROCE or debt leverage, so how are they making decisions on what to buy and how management of public companies should perform? Everyone now believes they are an expert, until of course it comes to actually doing it for real.

As far as Amerisur is concerned, this could take months, but given the movement of the interims I suspect news of the offer could be out within the next week. It’s not a time to be out of the share, whether it is a week or a month only those with inside knowledge will know better, and they have all dropped (rightly) off the radar.

On top of that ... China seems to be as hell bent on bringing about the end of liberal democracy through economics as Vladimir is through the FSB.

Will democracy survive the democratisation of financially influenceable opinion? Looks a bit wobbly at the moment.

What happened in the past is non indicator of the future.

My company was publicly listed until 2 years ago when we were bought off the market by private equity. With the massive increase of access to public share dealing has come an absolute opposite trend in the number of public companies on the market available to invest in. Big money is now trading off market via PE rather than the stock markets. Many of the remaining big companies look to have massively inflated valuations compared to their potential to ever earn a return, driven by demand from retail investment and funds tied to stocks.

Have a read of this :
https://www.bloomberg.com/opinion/articles/2018-04-09/where-have-all-the-u-s-public-companies-gone

The best argument against democracy is a five minute conversation with the average voter.

Boris wrote a book about the bloke that said that. I think you could paraphrase it with

The best argument against the free access to the stock market is a five minute conversation with the average small investor.

Seriously there is some right nonsense circulating here and in the wider world at the moment, who knew the Internet would bring about idiocracy

https://m.imdb.com/title/tt0387808/

That’s the beauty of a free market economy, nobody is forcing you to stay. You can sell at this price and move on to something less boring. On the other hand you can wait and see what happens. Either way it’s your choice what to do with your money.

The management of the company on the other hand just need to get on with negotiations and getting the best deal in the right timeline, and not rush to satisfy some short term holders.

Thursday news anyone? Or another quiet day? Every passing day now makes news more likely.

@BBN - Yeah I know! I thought I had got my prime target in HZM, I had assumed their funding wouldn't come through until Q4 but they landed it today. I hate doing all the research for timing to unpick it! My picks for the year were AMER, HZM, and PAF. The last two have more than doubled, but AMER is my biggest holding by a distance and whilst I am up I would rather be a lot more up...

Back to the drawing board / computer screen.

No new insight... although the 8.3s have dried up for some reason...

Just sharing some pain, my plan post AMER deal was to shift cash into HZM, unfortunately the premise for that came about today when HZM got funding! They have gone from 1.80 to 5.00 three weeks. Sigh... Timing is everything. Whilst I haven't lost anything it feels like I have, the holding I have there is much smaller than in AMER! Grrr...

My feeling is we are day or days away from news here, all the major holders are now sitting on their hands and as Margaret has said the volume has evaporated.

Rosannan, no they are not.
They may be coincidentally for one year where there was a recovering oil price, in a falling market they may actually be higher than the Brent mean. You're also missing the point that the realised price is usually discounted at the well head for transport costs to a terminal, whilst if AMER sell at the terminal they take the transport / pipeline costs as a separate line item. CPO5 production is sold at the well head for Brent price less a few dollars for truck transport. So the realised price varies according to field infrastructure as well as spec.
WTI vs Brent often move separately, the spread between the two has been i.r.o. $2 - $10 over the last few years depending global supply and demand for each. Amerisur's production is linked to Brent as it is the closest in spec to their product, but they may even start at a premium price to Brent as the light oil they produce is desirable for blending with the heavy oil from the rest of Llanos (e.g. Rubiales).
Besides, the F*ckwittery comment wasn't aimed at you in particular, but as you've put your hand up and assumed it was...

Can we park the outbreak of f*ckwittery ?

Oil price - the delta in realised prices and spot prices is due to the time offset. Hedged production sales and the fact the quoted spot price is for futures rather than the real time price. Its entirely possible in a declining oil price market for a producer to realise more per barrel than Brent mean price, likewise in a rising / recovering market hedged contract prices may lag the current quote for futures. Then you throw in stocks and backlogs, timed offtakes, transport offsets and it gets even more complicated.
Bottom line is in a completely flat market Amerisur's production would sell for Brent price less transport costs. If they were producing WTI spec they would sell for that less transport costs.

BBN - Meta region is served by decent infrastructure and roads, the distance between the Wells is pretty irrelevant for a mobile rig. Think thunderbirds style all wheel drive mobile crane for the rig, the actual movement from one site to the other should take well under an hour! The time lag is disconnecting and decommissioning at the first site and the reverse at the second, in this case the Indico pad should have all services already in place and be ready to go, hopefully meaning minimal delay.

Have a look at the area, you can get the road Indico is off on google street view, it’s the road between Puerto Lopez and Cabuyaro .