Member Info for pickedpeck

Sweet crude price will soar because of new shipping emissions rules: https://www.cnbc.com/2018/05/24/oil-prices-set-to-soar-ahead-of-shipping-revolution.html

Whole sector has dropped, probably based on a lower than expected draw from API. PMO and ENQ both down similar amounts for example. For AMER the JW purchase is a positive sign no question. The price of oil has not dropped though, in fact Brent is slightly up so this looks like a massive over reaction, possibly profit taking after a few days of sharp rises playing a part. Herd mentality.

The AGM report still quoted the 20kbopd target figure we all thought they had wandered away from in a slightly 'wish I hadn't said that' fashion. (last page , section 1, bullet point 4!) It seems they still have it as a target production level. Its an odd figure to shoot for. Why 20, why not 25 or 15? Does 20k production signify their exit criteria? At $50 net back it would be generating a million dollars net a day, that's a nice round number target. Assuming an associated resources boost then EV may be i.r.o. $3-4Bn, maybe more, 10x today's market cap, again a nice round number. Seems like an exit plan to me. Interestingly in Section 2 of the same page they also said OBA technical capacity is 50,000, presumably they mean piping rather than pumping. Still a nice scale to aim for, would be good to at least half fill it. Section 3 - Hmm... Up to 14 fully funded wells. Weren't there 4 more recently - 18 in total? Up to? I wonder if they forgot the ONGC wells when doing this slide. Then again page 32 has the Capex plans, that includes the named wells, 14 there too including 3 in CPO5 so maybe not. What did we lose? Still if they get 14 done between now and the end of the year I will not be complaining. Come to think of it double figures would be pretty impressive. Supporting Bays view - a bit anyway - Barely a mention of CPO5 as a strategic asset in the one page summary. Its either a huge feint or they really have no clue whats down there. We'll soon have ONGC driven news, just a few weeks to wait. Key acreage - on trend - buzzword bullSh*t, show me the numbers!!! Ahem. Sorry, a bit of impatience breaking through temporarily. At least we know what we are aiming for. 20kbopd and half the unrisked reserves turned into 2P or even 2C would be at least a ten bagger from here.

Bounced off 20p three times so far today, I think the sector pressure is there already to go higher in short term. I still stand by earlier assertion that we won’t really know where we all stand on AMER specifically until September, post first round(s?) of drilling results and with interims in hand showing crazy first half profitability. Increase in asset value from drilling will be accounted in the full year results, doubtful they will say anything material to EV before July, I still stick with 45p a share target inside the FY, maybe more if oil keeps on going up.

Seems so. Today, possibly this morning, may be the last chance to buy under 20p. The whole sector has had analyst rerates over the last couple of weeks. I suspect we will be back closer to fair value soon.

Cpo5 has apparently already produced 500k boe just under test, makes a mockery of a 1.3mmboe 2P.

Bays - I am tempted to agree except the thought process would imply foresight that would be at the genius level. The piece of evidence for conspiracy you missed was CPO5 P2 statement. 1.3mmboe , the flow rate and psi of the LTT well implies WAY more down there. Compare it to pretty much any other find and the numbers don’t add up. Even the BoD subtly say in this year’s AGM presentation that the Llanos34 block structures likely continue into CPO5 and there maybe 20mm+ down there. They also have $6m Capex planned for CPO5 , meaning ONGC are going to spend $14m, $20m total, on three wells. $7m a well - anyone thought why those wells are so much more expensive than the others? The seismic charts show three updip traps from the Mariposa well, they are going straight to production scale drilling rather than exploratory wells. 1.3mmboe my bum. There’s a big find down there and they have kept it quiet with ONGC’s agreement, and that’s the bit I don’t get, why would the Indians not shout about it?

Stop being so miserable then. 9% in a day and you’re still griping about John Wardle, maybe occasionally you might say just one positive thing.

Bakoven, I really hope you were short today. And yesterday. If you really are a holder at what share price will you stop being miserable?

Well, would be quite nice to turn up a find like that, I have to say the flow rates of CPO-5 are massively inconsistent with the 2P assigned to it. You don’t get high pressure flow at thousands of bopd from a tiny reservoir size, just doesn’t happen, so what’s down there is anyone’s guess right now. However ONGC seem prepared to go on a bit of a hurry up, maybe they have good reason.

From the AGM pack do we think that they are hinting the CPO-5 block may contain MUCH more than the prospective target? If it really is a continuation of the Llanos-34 structures then that block produces 55kbopd! What’s the 1P in Llanos-34 , anyone know? Makes a change for them to potentially be under committing:)

There was a share trade today placed at 14:53:53 for one ( 1 ) share at 15.70, so someone did a trasaction for a mighty 16p. . It was delayed from the trades list until after hours, appearing in the trades list between 16:35 and 16:51 ie after hours. WTF? Is this a MM signal of some sort? The volume today does not justify the drop unless RH is dumping his stake. There is no rationale to the current share price despite all the BoD whingeing.

JTD - You can look for the cloud behind any silver lining. PMO - I am a PMO holder too. I know that in April PMO was 68p a share, down from 360p in 2013. Its only just started recovering, 110p is hardly a massive success for them but better than nearly bust which was where they were ENQ - Around 40p, up a lot from its bottom but still 25% down on the year high. 140p in 2013 is over three times the currenr price, just like PMO. HUR - 47pish, down from 57p a year ago. Only started recoverign from as dead as a donkey in April, ie a month ago. SIA - The chart is a downward slope and only the last few weeks have tailed up. 400p in 2013, just over 100 now. And so on. The BoD does not control what shares people buy. They are a long way from perfect, but have positioned the company well enough to justify investing for me. If you think they are bad buy something else, if you like oilies why not buy one of the above and moan at them?

Dangerous I agree. But why not... this is about sentiment. I just have positive ones :) As for the finance specialists, in any multinational it pays to have regional specialists. I work for one, and we have FDs coming out of our ears to deal with tax rebates, local policy, and to make sure we don't inadvertently have a billion dollar oops moment. Takeover - possible if they boost the 2P significantly but before. In this market I can see money coming for proven assets but not for guesses. The drilling campaign may really be a kind of takeover mating dance. �1 a share, well if their production gets anywhere near 20,000 BOPD maybe but that seems quite a way off. Half both those numbers, 10,000 bopd and 50p a share... maybe a bit closer. CPO-5 drills may bridge a lot of that gap (half? ~ 1500bopd?). Each of the planned Plat / Put wells might be in the 400-800 range. Adding 3,000 bopd is not out of the realms of possibility. Predators, nonsense.

This share price is nothing to do with operational performance, the oil price, production, revenue, asset development or exploration prospects. Quarterly average production is at an all time high, the oil price (and as a result revenue) is more than 60% up YoY. the funded drilling campaign is targeting trebling the 2P based on a huge unrisked potential base. The company has positive cash and rapidly increasing income and profit. The company is frankly better positioned than ever before but the share price is still languishing. Yet the share price is near 50% of even the year high, and 25% of the five year high. The only explanation is the market sentiment towards the sector. I don't think this is AMER specific, looking at ENG, HUR, PMO and many others they are all way off their 'normal' values and only recently showing signs of recovery. I believe AMER will be in the tail of the recovery in sentiment rather than the forefront unless something happens to attract positive sentiment. The candidates for that sentiment shift are several fold. A further step up in oil price towards $100, a doubling of the 2P following drilling in June, or analyst company coverage and / or sector upgrades. However I think the huge upcoming catalytic event will be around the interim results. If the cash generation is now as we suspect then the forward P/E will be low single digits, the cash pile will be high, and if synchronised with 2P step change could be completely impossible to ignore for institutional and private investors. Its hard to see what would disrupt that step change valuation, I would expect a return to three year highs by year end. I'm calling it to hit 45p a share by end of calendar year 2018. I am sure there are plenty will say I am ramping and / or completely unrealistic, but I've put my money where my mouth is and now have just short of 800k shares in. DYOR and GLA etc etc, but at this price its a pretty damned good punt.

JTD - Drilling mud services is a technique used for drilling deep wells. Read about it here: https://www.rigzone.com/training/insight.asp?insight_id=291&c_id=

Seems like an average of two 100ct + diamonds a month on average so far this year is having the desired effect. I agree the yellow diamond is the 8th, need them to find two in May now to keep up the average! Seriously though the half year is going to look phenomenal. Previous forecast of 135p share price may have been pessimistic. We may see 150 this year, GLA , happy days :)

Jasehem, that’s the point. With free cash the company can invest in bringing additional assets on, the cash now is to turn potential and unrisked assets into 1p and 2P bankable assets. A year ago the conversation was around an oil price in the low 40s and of preserving assets in the ground! CPO-5 is also suspiciously small on the reserves balance sheet given the LTT flow rate, doesn’t seem to add up even for only a 30% stake.

Jashem, the barrel in the ground -> barrel produced is not a linear exchange. In April 12.84 1P / 18.95 2P at $70 per barrel would be $900m (1P) or $1.33Bn revenue, or $706m / $1Bn net back at current rates.

One more thing before I put the calculator down. This 2018 Q1 production of 601k at a period average of $70 (they may have done very slightly better or worse) would be $42m revenue. That's only $5m less than the full year revenue for 2016.