Member Info for pickedpeck

Stukey, agreed, just unusual for a purchase just over nms (30,000 for AMER). Incidentally that’s pretty small IMO!

Laptop, look up the formula for Enterprise Value for an oil and gas co. It’s used by institutional investors to calculate the value of a resources company, miners, oilies etc. The EV calculates a value for the various stages of proven, probable, and possible resources plus production and cash etc. I’ve done the calc for AMER but every time I do I come up with a much much larger number than the current market cap. I’ll do it again post results on Monday to see what’s what.

More interesting that they have chosen to Delay my purchase , i bought another 50,005 @15p this morning. Something hidden here for sure.

Laptop, why would they sell their main income asset? Only to find something better, which isn’t on the radar yet.

I think they are vulnerable to a cheap take out now, the cash and lack of debt completely derisks it from a buyer perspective. Take the cash off the current market price, then at current POO the valuation on $3m of weekly income would be paid back in just over a year. That’s ridiculously low, even ignoring any of the prospects to increase the production. I know there are long term holders / posters that will see this as so much blah blah blah, but at the current POO valuation should be at least 3x current price - they are a cheap take out target right now.

They don’t need the cash for growth, they have no debt and will likely have ~$40m cash in hand. The drilling program is funded from income at POO $45+, plus oily Malcolm has said they are ‘bandying around the ‘D’ word’. As a way of affecting share price and value to investors it may be a small price to pay and show confidence in future income. The only reasons to continue to sit on a cash pile like that is to make them an acquisition target, for additional block purchases, or as a war chest for acquisitions. The latter I would rule out at this stage of the cycle, there are not many cheap targets out there when oil is $73 and rising. I also think their current block drilling program is as much as they seem able to deal with and is reasonably low risk, and I don’t think they want to be acquired - yet... so... what would you do with the cash? At $70 plus per boe they have a net daily income of around $400k, nearly $3m per week!

Has it occurred to you that we may be being held down by the efforts of a Russian troll farm spreading rumours about BoD and meetings rather than judging the numbers and actual news? The implication would be thats happening not jurist to amer but widely! Hard to believe some of the negative hype here. They are reporting more detail than any of my other oilies yet are being slated. Profit up, production up, costs down, growth potential from drilling, stabilising political environment in Columbia and Ecuador, and POO going one direction. I’m in.

It would be more use speculating on eps rather than the outcome of a single meeting? A 0.5p dividend would cost $8.5m , will they do you think?

The loss last year was on an impairment for ops in Paraguay , without that they more or less broke even at $38 per barrel and lower production. I can only see them making a profit this year, hard to see where any left field exceptional might come from. Ops look fairly clear, drilling campaign is funded from cash. I am not accounting for asset values in the £160m, but CPO-5 must be worth a big chunk. Need to do a proper EV calc post results, but as I say the roughs seem to come out much higher

Total production for 2017 1.775 MMboe (0.809MMboe in H1) , so around 0.966MMboe in H2, 19.5% more than H1. What average netback? $35? $40? They used $29.6 at the half year against an average sale price of $47.6 which gave first half EBITDA of $7.6m. Must be close to $57 average sale price in H2, with lower costs I think there is a case for $40netback. So, Must make at least $12m in H2 given POO shift and increase in OBA throughput, would be nice to get to $20m EBITDA! Given the half year cash position of $29M, the market is valuing the company at around £160m. Seems harsh. I don’t quite have 700k, nearer 500k for me btw do not entirely neutral here :)

Any predictions for the results announcement? I am only really interested in the money generation and cash, I don’t need weekly drilling updates or to speculate on pipe diameters. Those things can only really swing short term sentiment for short term traders. Has anyone done an estimate of EV? It seems the MktCap is absurdly lower than my figure for EV, so I am wondering whether this is being manipulated rather than traded. How about some eps guesses for next week? Their production figures and netback are all published, but not quite the full financials.

I hold a few oil cos, and in comparison AMER are at least reporting monthly production two days after the end of the month every month, most others don't. They did announce three weeks ago passing 2m barrels through OBA and the associated improvement in profitability. If there is nothing to talk about for three weeks then we shouldn't just assume news is bad I would sooner the business just delivered the growth than focused on the daily share price. They seem to be doing that given continued production increases. They forecast a 2017 exit rate of 7kbopd, they near as dammit hit it. Malcy even hinted that they may announce a dividend at the results. I would like them to do that and deliver the 20k bopd promise for end of 2019.They could even use some of the free cash for a share buy back if they were in it for the long term. However I suspect they would rather hold the cash in hand to make them look like an even more attractive target which has to be their obvious exit strategy - a la Emerald Energy. Bring on the results, I am going on holiday between now and then and sod the daily chart.

Weird that the spread is so low, what's going on here? This seems to be moving against all available data and information.

Oh and another thing, how realistic is their 20Mbopd production prediction for 2019?

First half EBITA was $7.8m , second half production should be 889Mb declared plus whatever they managed in July during the disruption, so say another 40Mb. Gives 920Mb for the second half. First half the price achieved was $47 and change for a $29 net back, OBA increasing throughput should have increased the net back as should the POO. Safe to assume $55 per barrel in the second half? They are also quoting $15 avg opex now so net back somewhere around $40? That would give an operating margin of $37m or so for the second half, maybe $13m EBITA and over $20m EBITA for the full year? Have I got this right or wrong? With that operating profit, forecast production growth being met, increasing asset base, and continued lowering opex why is this the price it is? What am I missing?

Graham, I have around 70k shares at an average of just below 90. I'd be happy with 135 as a sell point if we can make it in 2018. I have slightly fewer PDL shares at an average of just over 80, again targeting 135 for exit against today's price. Incidentally I think the nice PDL rise today was a halo effect from GEMD, or maybe people were confused over who actually found the stone! 145 may come back in 2018 but more likely 2019. The spike in April 2016 started from a higher level so this (these) discovery and the trading update may not take it that far quickly. However your original buy price is gone and other for monitoring your own performance doesn't matter anymore. The key is always to focus on the where the value of your current investment will go rather than where it came from. A 50% rise to get you close to break even may sound bad, but where else are you going to take the money and put it in order to get a 50% return from today's asset value? I presume you've ridden the share price through the lows from either April 2016 or back into 2015. Don't you have a stop loss? Looks like a long down cycle to hold through.

That's the FT saying that. Value could be anywhere between $40m and $70m depending on inclusions etc. The 357 carat Letseng Dynasty went for $19.5m in 2015, as a linear conversion that would make the latest diamond worth about $50m assuming they are similar. However the novelty of the size will likely command a premium even to that rate, and it depends what the cut options are. A very large named cut stone may be possible. Its a wait and see. Also worth remembering only 70% of the mine is owned by Gem the other 30% belongs to the Govt of Lesotho, and that the likely market destination will be Graff as 20% stakeholder in Gem.

This is the government hitting all the miners across the board. At least Petra have resumed exports, some of the gold diggers are still on hold. I understand why Petra have been quiet, better to negotiate behind closed doors than through the media as anything they could possibly say would only make the situation worse until both sides have agreed a stance.

Certainly not a bad January at the office so far. Looked at a slightly different way this makes an equivalent of 11 diamonds above 100 Ct recovered in the last month, double the whole of last year's number. Here's hoping big diamonds come in more than threes! Macroeconomic factors may also help, with a global recovery getting going properly and coinciding with the marketing of these products. Last point to make is that the company took all the Ghagboo hit in impairment in last year's books, the forward earnings looks very good for this price level. Keeping faith in resource stocks is always challenging in down turns, but this looks likely to be a very positive year. I hold these and Petra Diamonds and am looking for better than 50% gain from both in 2018.

Large stones like this are material in terms of market cap of the company. You can expect a sale price of i.r.o. $70k per carat, maybe more. 910 x 70000 = $63m. Some comparative diamond sales over at Petra www.petradiamonds.com/about-us/our-heritage/