Member Info for pickedpeck

He's a donut thinking that being negative on every other small cap oil stock will help persuade people to invest in TGL instead. Check the posts, they are comedy. Even funnier is that someone recommended it!

Sheesh.

BBN - spot on. It’s short term trend traders and riverboat gamblers that are doing the moaning. Nothing has changed in execution or the fundamentals, it is all to play for this year.

Platanillo only is 17.5m P2, And yes that is after all extraction to date. Company P2 is 25m. I bought more today at 14p, if you get some at 13p good for you, but you’re not having any of mine! Despite everything about the company fundamentals there is a cynic in me that looks back at the 5y share price chart and notes a repeated dip in late March, just before final results, most years. That’s followed typically by a run up on the share until late May. Is it really that easy and simple to see market patterns of behaviour? If so now is a pretty good time to be buying, just when everyone is feeling miserable.

Just sell LuckCounts. Just sell. Perhaps you will find 'luck' somewhere else. The management team have a strategy they have published and are pursuing that will eventually deliver value to actual long term holders. If you expect the management team to deliver you trading profits then you will definitely need luck.

What a kerfuffle. £30m off the market cap because one exploration well (that cost AMER maybe $2m?) didn't come in seems like a dramatic over reaction, as do some of the comments here.

To be clear the RNS says that a lack of containment caused the duster, in exploration that just sometimes happens and you never know until it does. The shape of the trap, the geology, everything can be right but a gap in the impervious containment that would be impossible to see from seismic just ruins it all. It's disappointing but so far from being the only trick this pony knows as to be barely relevant.

The company is still the same as yesterday, it still has more prospects around Indico, in the rest of CPO5, and all over Putumayo. Prospective reserves just fell by less than 1% but we have 16% off the share value. A pretty high volume traded today, hopefully cleared out whatever was holding the share at 17p.

As for using the cash to buy back shares, or waste effort on a consolidation, I can't think why on earth they would do that. I would absolutely for sure vote against such a move. If all the company could think of to do with its cash is to please short term trading investors then we would be in a bad place. What nonsense. As for attacking JW because 1 well didn't come in, again what nonsense. We are sat on top of a great portfolio of exploration prospects because of his in country deal making. I think he is good value for the money, as without him the company would still be sticking pins in the map in Paraguay.

Low ball bid is the other fear, I think this may be real but all relative. I don't see any bid below 30p being entertained, and I think over 40p much more likely. This could fairly rapidly turn into an auction given the new interest in the area. I am hoping for a buy out, that's my exit plan from Amerisur, the questions are only when and how much not if. I still think it probable this year, and if oil price stays where it is almost certain by the end of 2020.

This is where you suck it up and believe in the hypothesis or get out. I see today as a good buying opportunity and just passed 2.3m shares now. I have a couple of other investments doing well at the moment, if they lose momentum I may well switch even more into this.

Taking a zero of the end of every trade volume figure wouldn’t make much difference to anything, the market cap and value would be the same, the % of tightly held shares would be the same, and the value traded each day would be the same. A bit back would reduce liquidity, but I don’t want them to spend the money that way. Who is planning on going to the AGM? Any issues we think PIs might be able to influence? Putting a decent block vote together may be more useful. Personally I want to know where all the operational projects are up to alongside production updates.

Big smoke - a lot not to like actually. When a company has run out of ways to make cash grow faster than just handing it back then normally it is time to go. For example, Would you rather AMER used their cash pile for share buy backs rather than funding drilling in CPO5 or seismic surveys of their PUT blocks? I know where I would rather they spent the cash. With respect to everyone, for dilution a couple of numpties coming up with a hair brained idea on a bulletin board is not necessarily indicative that the company is thinking the same way. You may as well predict the company putting all the cash on black down at the casino. Q2 slippage? Being Bored waiting for results is one thing, but they have shown time and again they are a lot more worried about business than the PR for small shareholders. Get a grip! We are on the coat tails of two oil majors and on their plans and schedules, AMER PR has zero value in that context which is partly why it has dried up a bit. I doubt AMER are even thinking of drilling anything, let alone PUT8, themselves now. As a small investor the bet here is to get a pay out on the increasing probability or actuality of a company sale which if you ask me is going up daily.

Big smoke - Share buy backs happen when that is the best way of using cash to increase shareholder value. Another way of looking at it is either because the company has no decent growth ideas left or is defending against a possible bid by quickly offloading cash and taking up loose shares. Both could be true of GTE. I have no idea where the dilution idea came from for AMER, but don’t see it as credible given cash at hand and existing debt facilities plus the OXY farm in commitment. They have no need to issue equity to raise funds, value will increase pretty rapidly without doing so.

I agree luck counts, but to paraphrase Henry Ford and others the harder I work at researching investments the luckier I get.

This morning's news doesn't take the large seller with a sell price of 17p away, nor does it create an immediate wave of new investors to take up the overhang.

As for share consolidation taking away the overhang, I think you misunderstand what a consolidation is. You maybe mean a share buy back rather than a consolidation. Either way I really strongly disagree, I would rather they used the cash at hand for asset development and value growth rather than frittering it away pleasing short or even medium term trading share holders.

I think the way this will play out is a company sale, the asset estate makes a load of sense for a buyer now and this morning's acquisition adds additional value to that final sale price so I am happy. I still think sale price i.r.o. 60p minimum to loosen tightly held shares. There just are not enough available at a much lower bid.

Juxtapose, My point is the SE is barely if ever mentioned in Amerisur reports, presentations, RNS or anywhere else. Yet the prospects have names we only know from one diagram, and are far enough along in terms of commitment for ONGC to be acquiring land for pads and production and referring to Phase 2. The SE is a long way away from the LLA34 block and is across the heavy / light oil line that runs NE-SW through the Llanos basin. The prospects are almost halfway to the Rubiales field from where Indico is :) At the AGM (AGM slide 14) the SE prospective area was referred to as Cano Bravo, with a second area of Mirador Pinch Out right at the south of the block. The latter seems to have disappeared in the last 12 months, whilst the former has renamed itself and split into four separate areas : Alondra and Airon where Cano Bravo was, and two new close by prospects Azor and Amaranta. These changes appear to be material to the prospectivity of the block and it’s value as there now appears to be a plan to pursue them. Work has obviously been done refining the seismic knowledge and the result of that work has not been shared with Amerisur investors. Cymru am Byth!

JP2000 yes, I know they are there in the picture, otherwise I wouldn’t have been able to name them. ONGC are saying they are going to speed up drilling them as phase 2 in their tender doc. So they know they are there. ONGC don’t name them but do say four prospects in the SE of the block, and funnily enough the AMER picture shows four prospects in the SE of the block. But apart from some squiggles on a picture, what are they, how does the company know they are there, ie what’s the seismic that found them, when is phase 2 happening, what’s the prospectivity, and most importantly why is nothing at all being said about them? ONGC have plainly already decided to drill them, Amerisur haven’t even made mention of them apart from that picture which is about as non-specific as it is possible to be. My basic question is ‘Is that another large formation in the SE of the block?’ If so that would be likely be heavy oil and not a light oil LS3 extension, and explain why they are now talking about building oil production facilities to store, blend and export. The LS3 Une formation in the NW is already a company maker, but a large heavy oil deposit in the SE could be a second game changer.

JP2000, there is no mention of the SE prospects, all the ones described are in the NW part of the block. I’ve not seen any description of Azor, Alondra, Airon, and Amaranta anywhere.

Just three phrases in the ONGC tender to focus on:

'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.' - In addition to the land around Mariposa and Indico they have identified 10 new pad locations already. Multiple wells per pad.

'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.' - Well that's an acceleration. At least four this calendar year in CPO5 plus groundwork for a pipeline. Too much oil to truck out, that pins expected production to be well up from 10kbopd. And increases LAQ work multiple times, must mean against the previous development plan - acceleration confirmed here. JW got his way on the India trip I think.

'In SE part of CPO-5 block, 4 exploratory locations are lined up for early drilling within extended phase II period of the block.' - I could be wrong, but this sounds like they are going all in, and have identified targets in the SE of the block Amerisur have said nothing about them yet, but he Feb 19 investor presentation (slide 7) names the four areas in the SE of the block : Azor, Alondra, Airon, and Amaranta. I can find no other Amerisur reference to these prospects and no detail on them. They are not mentioned in the CPO5 appendix section in the Investor presentation, nor in any RNS. Anyone? I don't think we have even had mention of Phase 2?

As a welshman 2019 is shaping up pretty well so far, and Amerisur being based in Cardiff look set to make it a decent year in business as well as rugby. Anyone reading the ONGC (good find Leas) tender can't help but understand what is about to happen in Cpo5, its about to be a company maker for Amerisur. This is not about Calao, this is now about massive expansion in multiple locations and multiple drills this year. This is also not about a second rig, its about how many rigs they add. We could be looking at five more rigs, pipeline hook ups, a dozen drill locations, and 10x 2P and production. Just a bit of patience required, not much, just a bit. Exciting isn't it :)

I agree there does seem to be a symbiosis in play between the two prospects. At this early stage though Vermelho may just be seen as a deal sweetener, upside for a buyer. I think the most likely outcome is a full sale this year, hopefully as a result of a bidding war with Ni sailing past $16000... Its hard to see how this wouldn't turn a very good result for a PI in almost any scenario.

The miners have taken a stake as they are obviously interested in the assets. It is possible that a future JV vehicle could be formed for Araguaia as a completely new company, in which the venture partners may not include HZM. Under that construct the wise move for HZM would be to take a pile of cash for the asset from the JV investors and also position to be paid a royalty by the JV in future production to provide ongoing funding for future projects like Vermelho. Organising that in comparison to a debt:equity deal is a bit like trying to organise a threesome rather than a regular date... Trickier and likely to take longer to sort out because everyone has to be happy with the deal, but potentially worthwhile.

JV would be a good suggestion if HZM was much bigger. Whoever the JV partner would be they would be putting up all of the $443m, the split between the resultant business partnership would be 90% in favour of the partner or else why wouldn't they just buy HZM out of the deal? HZM current market valuation is $40m ish, even trebling it and adding a bit to allow for tightly held higher price shares would leave more than 75% with the JV partner. The investor presentation is aimed at corporate investors not you or I, they are going through the motions of getting a finance deal in place along the lines of the proposed structure. It also reads like a buyers prospectus for an M&A group in a bigger company though, and as I sadi below I think that's the likely outcome and real investment opportunity for PIs.

Goldeninvestor... 1.4Bn shares in issue now, but they have said in their investment presentation that for the $443m capital needed to build the mine they believe 35% will be in equity, ie newly issued and placed shares. So by the time they have raised all the money, built the mine, and entered production there will be roughly 5 times as many shares in circulation to make the market cap, unless their investment hypothesis changes. As a £30m company you don't just rock up to the bank and ask for a $443m overdraft, this is dragons den where you have Peter Jones saying 'I'll give you the money, but you need to pay 65% of it back in cash within 5 years of entering production and I also want 80% of your company'. This is their investor presentation on the website, slide 22. Target project finance is 60 to 65% debt to balance equity. That's a target they may or may not achieve, a lender may want a different split. You can use slightly different numbers, but the concept of major dilution to raise the finance stays the same.

By the way, I assumed the equity would be placed at today’s share price not the 3.5p of the last placing, obviously these things cause worthwhile variation in the calcs. I do suspect the calculation for the management LTIPs was based on the assumed base case taking into account the likely equity dilution.

Again, apologies for sector ignorance in advance. As a £30m company (less some cash) raising finance for a major investment there are only a couple options - debt or equity. I see in the investor presentation they propose a 65% debt:equity ratio to raise the $443m , converting to pounds at 1.3 gives £340m as the capex, 35% of which being new equity would mean £119m being issued, adding the £30m current value that would be say £150m total, with a proposed £221m of debt. That’s a pretty high gearing to get to production but I am sure they know more than me (doesn’t take much). The question is in 2022 entering production how will this translate to a future share price? The suggestion of 20p, the company would have a mkt cap of about £1.4Bn , I think that’s a bit high. Stage 1 NPV - the closest guess to future value, has a base of $401m, £308m. That’s pretty close to the management teams incentive at 4.8p a share (£327m on today’s values allowing for the equity dilution). Pretty sound strategy setting options at the base case, it means shareholders and management team benefit if the base NPV translates into a mkt cap using $14000 a ton! Mkt consensus Ni price or Stage 2 base case at $740m NPV would be about 8.3p allowing for the dilution, and the Stage 2 consensus NPV, the best possible outcome a few years from now would be 14.25p. Sorry about the dodgy NPV to Mkt cap assumptions, I know they are not directly correlated, but it does help with target valuations. In their place I would be touting the project value to potential acquirers not just the banks, I know they are not allowed to say that but it would be a win-win for everyone if they were taken out for about 6-7p this calendar year. That would leave the buyers plenty of upside, and make the shareholders and staff reasonably happy. It would work for me anyway :) I’ve probably got this wildly wrong somewhere, please feel free to correct any errors or idiocy!