Member Info for pickedpeck

bumblingfool - it’s a fake. There are lots of operators in Putumayo, Amerisur is not even one of the largest. Is there actually a picture in there of anything really contentious? Ask yourself why this focuses on AMER rather than say GTE. It’s nonsense

That’s my favourite all time Bays quote ‘World demand doesn’t collapse over night unless it’s the day of the triffids’ - Genius. The cynic in me thinks that this may be a grand market manipulation aimed at killing off shale producers through rollercoaster volatility. Get them to commit capex and then kill their income and ability to pay down debt once the money is sunk. If oil persists in a cyclical model for two or three cycles it will discourage capex spend. The Saudis need the US consumer market more than ever and this would be a great way of sustaining demand for their key product. Meanwhile back at the ranch AMER still make money, the light oil price is closer to Brent than WTI price and hopefully they managed to hedge some production to limit the damage. How much are Shell paying them ?

My larger trade today is delayed, I am betting it will show up later marked as a sell. The price is clearly being professionally played here, I am expecting a flurry of small trades late on in the day to try and push the price down for the weekend.

I'm in on the basis of fundamentals and not trading, the short term trend is not my friend as I am only really interested in a 6-18 month view and looking for a decent gain rather than single digits. This may well spike down under trading pressure or even adverse news, but possibly more likely is spiking up on a market rerate for the sector and company and positive news from several possible programs.

JTD - Not so sure the Canada thing will be material, they have been struggling with storage and transport and it may be short term tactical rather than a strategic point.

I do think KSA and the US are about to fall out big style in January though as the new US government takes office in Congress. This week's vote was a shot across the bows which could be followed in January by a full broadside. The US announcing it is a net exporter may be a little premature, for example the Saudis feed 600kbopd into Port Arthur in Texas, the US' biggest refinery. Will certainly be interesting to see it all play out.

13.95 seemed tempting enough, slightly dropped my average. I think oil will go up over the next week or two and that will lift the sector, but I am not really expecting any other AMER news until January.

:) , I have a six figure sum in here with just over 1.2 million shares, my average is 14.2. The bulk of the shares were bought in the 13s . Money where my mouth is, so why is your mouth here?

Welcome back workover, that has to be the most begrudging post in the last two weeks. Bakoven has also been suspiciously quiet, must be painful seeing that 208ft of net pay following on from the OXY announcement. What is your price target for your 12p small purchase? With a comment as begrudging as that maybe you should be content with the current 30% gain and go play your next selection?

Colonel - The intent has always been to use the same rig for Sol. The rigs are mobile, think of them like a mobile crane. They are driveable on access roads. I would expect close off to take a week to 10 days, then a flow test / short term test to be anywhere from a week to a month. We should get flow rates in mid January, and some low guess understatement on the reserves at the same time.

It will be low as they do not need to raise capital for further drilling and there is no advantage in claiming a huge new asset officially, and quite a lot of advantage in understating it.

I wonder if we will get a spudding announcement in Platanillo shortly? 17th of October the RNS said '...Initial results indicate that the well is located low on the new structure. The Company expects to complete re-mapping of this discovery in the next four weeks, followed by a decision on further drilling to appraise the discovery'. That decision must have either been taken or be over due now, and with the rig likely still in place they could spud additional wells on Plat shortly.

For interest google ‘ Geopark Tigana Jacana net pay’ . You’ll see GeoParks exploration wells which identified the Tigana field as having 56ft of net pay, the first well of which is producing 1700boepd with some small water cut. Indico intercept is 4x that, nearly 5x gross. The net pay to production potential is not linear, ie it won’t be 4 x 1700 , the pressure up dip and away from water may well be higher. Geopark hit that field in 2013, and are still developing the block with partners five years later. Don’t expect instant gratification from this discovery unless AMER is sold based on asset value, however at this price and with these assets that looks very likely to the point of almost inevitable. So what sale price would be reasonable?

The neighbouring block to the northeast, Llanos 34, produces 55,000 bopd. The hypothesis is that this is a continuation of the structures that produce that as the geology appears to run NE-SW. That block is still being developed, this one is starting to look like it has the same or even more potential.

JTD - The lateral extent is perhaps the shorter term target for appraisals, in the announcement they highlight the surface distances between Mariposa, Indico and the proposed Sol site and say they are now planning further drills to essentially establish the footprint of the find.

The low water cut enables a simpler oil in place calculation based on the inferred volume of the trap, ie they don't have to account for water volumes, that's why they said: 'Further updates will be provided as operations develop and the volumetric models are refined based on logging and testing data.' Basically they are deferring making an oil in place / recoverable statement until they know the size of the reservoir, but they are clearly implying a field diameter of greater than 13km. Once they have the log and test data on flow and density they can say what is in place.

Having said that, given what we already know... assuming Indico is the centre of the field rather than the edge, and Sol and Mariposa represent the edges, then we have an approximate sector of a sphere containing the oil 13km wide and 208 feet thick net.

Using a (highish) rule of thumb of 1g of hydrocarbon per cm3 in a 15% porous rock for API 41 oil , V=2/3 x pi x r2 x h , = 2/3 * 3.14 * (6.5*10^5)^2 x 6340 = ~ 1.6Bn BoE.

So the reservoir is not circular, the thickness not uniform, the % hydrocarbons could be lower based on sand porosity and API and so on, and flow rates might make the % recoverable lower. The radius may also be lower depending on Sol, but right now you have to assume Indico is the centre as it is much thicker net pay than Mariposa, but remember Mariposa may not be the edge either.

The bottom line is like my earlier post, they have a find likely in the hundreds of millions of barrels, and simply don't know how much yet until they have done a lot more testing. Far more educated people than me will be able to take the numbers and make a more accurate guess, which is why they have published a subset of the numbers now. Its a for sale sign for a billion dollar asset wrapped in a hundred million dollar company.

Damn, I was hoping to move more money into this ahead of this news. 208 feet of net pay, and the comment that Sol will be 13km from Mariposa, makes this not only a big find but a huge one, like world class. This is more cryptic messaging from the company without a guesstimate of the reserves in the discovery, but we are in the hundred million barrels plus territory, maybe as much as three times that. Post short term test they will have to make a revised statement of the reserves, but this discovery alone even at 30% attributable to AMER, looks like it has a valuation significantly higher than their current market cap. The way the RNS was structured and given the current mkt cap I would say they just raised the ‘for sale’ sign. It’s not a question of if they get bought now, it’s who by and for how big a multiple of the current price.

It’s easy to short with falling POO, as soon as Bakoven posts you know the next few days are going to be down and I have noticed a few others on his bandwagon lately. It’s orchestrated and not just on this board. Eventually reality will kick in with regard to the fundamentals of the business. Cash will eventually lead to a dividend, particularly as they now don’t seem to need as much of it to fund drilling.

I see JW has another top up share purchase today. The number of purchases this week is starting to imply this may be a very short window for the insiders to make purchases. They have almost certainly been advised by their brokers that they can make these buys now but when the next corporate action kicks in they will be into a closed period again, and / or the Pintadillo and Indico results are due imminently which will cause a very sharp price rise.

Bakoven - The question would be what possible motive could you have for pointing it out? If that site is real and you are an investor then sharing the information and coming back to it over and over again would only harm the share price. What is your post on a BB possibly trying to achieve? If on the other hand you are trading the range on AMER and want to drive downs as well as ups then it is exactly the sort of thing you would post. There is enough volatility in the price to attract that sort of attention and relatively little sentiment shift can affect the price.

From my point of view the content is irrelevant without context and is a scaremongering story being pushed by someone with an interest in seeing the share price go down either as a shorter or based on some personal agenda. Either way its not a credible story as the company could not give last week's operational update without mentioning any major production issue, they have always been timely about problems before (Plat workover issue, civil unrest disrupting Plat etc). I see no reason they would change behaviour now.

In contrast could you comment on the farm out deal and why investors should be excited about it? Surely it dwarfs any other current issue and has transformed the company's prospects.

Everyone has forgotten the CPO-5 part of the operational announcement. I am getting used to them leaving clues for the knowledgeable in their announcements, dropping details that seemingly seem stray. The bore of Indico was stated at 12.25” , and they have also told us they are essentially using the largest mobile rig available in Colombia to drill it. That bore is pretty big, drilling a big bore hole is much more expensive and generally only done when you expect a very large pay zone. In other words Indico is being drilled as a very large production well and not an exploration well. They also went on to state the operator expected resources of 10.8MMBoe from Indico. There are a couple of ways of reading that, not least that Amerisur separated themselves from that opinion. The scale of well would imply a much larger target and Amerisur are hinting at this in their announcement. Should be an exciting week, a couple of hundred feet of net pay would be lovely :)

See the Wednesday RNS where we got 100% or Mercaya

Bakoven / workover is that you... take off that cunning disguise!

JTD - do you think the net asset value increase implied in the block valuations will translate into the FY results? $4.9 on the books, $187m implied valuation would drop an asset value increase of $182m onto the books, less the 50% OXY entitlement leaving $88.9m NAV increase. Added to the FY profit from production that would make the PE close to 1 for FY18, less the cash position it could easily be much less than 1.0. Never had that before on any share I have held, only heard of it a couple of times. A share price with an in year payback. Nuts. Even a conservative valuation given the additional asset upside from other blocks and a third party driven exploration program would make it a 4-5 times multiple from here. In other words this isn’t just a good deal, it’s a transformational one, and I don’t really care whether it goes up 20% or 30% today as it will go up a lot further over the next few months. The damping effect of CFDs and short term traders will soften the daily market rises, but this will now rerate at last. Good day to be a long term holder, not so good to be a shorter.

No, it means OXY are prepared to pay $93.25m in exploration costs for half of them. The RNS states the prospective resources at 656MMBoe, 50% of AMER’s prospective total btw, if the exploration shows even half that to be present then OXY will think they have got a complete bargain.