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Crazily undervalued at these prices but I like the Company's strategy emphasis of returning value to shareholders. That's what the institutions want to hear. With Fortuna still hanging over it, it could stay at these levels a little longer but eventually value will out! Who knows, if they could pull a rabbit out of the hat with regard to Fortuna, it could seriously fly. A takeover is also not impossible.

The price action stinks of a classic AIM lowball takeover or Management Buyout. seen it so many times, you march the share price down to a point where most investors would just be glad to get out, you get an analyst to come up with a valuation not much more than the current market cap, offer what looks like a generous premium on the bid (but in reality just takes you back to the price a few months ago) and get management to recommend the offer. Why would the Directors do that? Well lucrative new positions on the Board of the acquiring company together with share options in said company could be used to entice cooperation.

If anyone thinks this is pure fantasy look what happened with Ithaca not that long ago. Totally corrupt but there is no come back and for most investors no option but to take what is on offer. Watch this space!!

JTD. It is not a conviction, it is a view of what might well happen. So why don't I sell up and buy back lower? The answer is I am not a trader and there is a possibility that something will happen to cause the shares to shoot up and I would have to buy in higher. That might be an acquisition or a bid, or the drills come earlier than I expect, or production is much higher than I anticipate. I bought at a price that was higher than the current price and am happy to hold because I believe the stock will eventually come good. I don't see anything illogical in that view.

Hope you are right. I have just learnt to be pessimistic about timelines. Don't know how long the perforation work will take and bow to anyone with the technical knowledge about timelines. I am hoping that after the additional perforation, output from Mariposa at least doubles. I see any dip as short lived but I have no interest in trading and will continue to hold for the good times I anticipate. Good luck to all longs, we will have our day in the sunshine (eventually).

Amer is now all about the exploration but in the short term will be driven by production figures. Given past performance, I don't expect anything to spud before August. That means we will have one possibly two months production figures before we see a big change in momentum. I am anticipating a further bog drop in production in June or July just as a result of the perforation work on Mariposa. A temporary drop of 1000 bpd as a result of Mariposa coming off line could see us drop below 4000 bpd. That I hope will mark the bottom before a big bounce back once exploration finally gets underway. So I see one further sell off possibly down to 13p or 14p temporarily as a response but that will likely be short lived. What could change that is if things move faster than I anticipate or there is other positive corporate news. The other thing that could impact the SP is if we have a big buyer effectively putting a floor under the price. At the moment there seems to be a buyer around at the 16p level which is encouraging (could it be that the company themselves are seeking to limit further short term volatility by instigating a buy-back at 16p). Just my thoughts and I am usually wrong!

Whether the lower production this month is an aberration or not, in which case we model 2018 exit production at either 5,000 bopd or 6,000 bopd; and Whether any drilling success gets tied-in on time around March 2019 or it slips to Mid-2019: AMER prodn scenario analysis As I say above, the analysts are clustering around 7,500-8,000 bopd and so look to us to be forecasting around the pessimistic scenario. At 7,500 bopd, Cash Flow from Operations (CFO) could range from $47-68m depending on oil prices (assuming they stay in the current 1-year range of $50-$75/bbl). That implies a Price to CFO of 3.9x-5.8x. Not a demanding multiple. At 10,000 bopd CFO rises to $62-91m, and a P/CFO of 3.0x-4.4x. At 12,500 bopd CFO rises to $78-114m, and a P/CFO of 2.4x-3.5x. Therefore, the market is, in our view, pricing in even more pessimism than the analysts. The upside potential relative to downside risk over the next 12 months, combined with the active newsflow, is why we like it. To conclude I deliberately chose a share that has production because I�m not a fan of pure exploration plays as candidates for a portfolio. These companies with production and cash generation still bring a lot of risk but the risks are easier to understand and the cash flow allows these companies to survive when there is an inevitable slump in oil prices. As I outline above, there is a lot of subjectivity in shares like Amerisur and we need to be comfortable with those risks before we add them to our fund. The same goes for anyone looking at this sector.

be dictated by results from the Platanillo drilling (mentioned above) and the first well in the block. The two choices are an N-sands large look alike (number 3 in presentation, page 19) which would most likely be favoured if the drilling of the North of Platanillo licence proves successful, whilst the smaller Bienparado would be drilled otherwise, as a similar play to existing Platanillo production nearby. Lastly Amerisur has Putumayo 12 (60% working interest) and 9 (100% ownership) blocks both with three well drilling programs and with 2D seismic activity on-going. These wells are slated for later in the year and we shouldn�t be surprised to see a few of these perhaps slip into early 2019, more details are likely to emerge nearer spud date. However with a combined net to Amerisur prospective 289 mmbo there is a large potential prize waiting any drilling success from these six planned wells. Slide 24 is worth a glance with Putumayo 30, Terecay and Tacacho combined having 926 mmbo prospective resources. If Amerisur can grow its shorter-term cash flows then it has a whole host of prospectivity to drill into through the next three years or so but to really make any inroads in here they need to be a larger business with a bigger balance sheet. Perhaps these land assets might attract a larger balance sheet partner or takeover of the business given current high oil prices. The success of its own pipeline investment is now becoming clear, so far the opex savings on a quite low average throughput have paid back the capex over only 15 months. However, its real value can only increase if exploration can provide the output to step up throughput to more like 20,000 bopd in a couple of year�s time. Experienced Management Long-term, stable and experienced Management are a crucial factor for a business when we�re assessing whether it should be in our fund. Amerisur is in a strong position on this front. CEO John Wardle is based in-country, he has been in place over 10 years and he has a track record of getting things done in a country where this is no easy task. He�s also survived through the cycle as oil prices have ranged from $36/bbl to well over $100/bbl and all the way back down again during his tenure. Time for the back of an envelope� Making the VERY rough and arbitrary estimate that seven out of 14 wells and the increased perforation at Mariposa provide 7,000 bopd then current production could double by mid-2019. Current sell side analysts that provide estimates have well below this sort of production increase in their estimates. Most analysts seem to be clustered around the 7,500-8,000 bopd range for 2019. See recent notes from GMP FirstEnergy (here) and Arden Partners (here). Undertaking some basic scenario analysis, below are four scenarios for 2019 production. The two variables we�ve used are: Whether the lower production this month is an aberration or not, in which case we m

and these usually, as a rule of thumb, produce something like a factor of 3x the uplift compared to a vertical well if successful. This gives a rough range of 1,000-5,000 bopd from these three wells. However, with drilling the concept of a "sure thing" does not exist. Therein lies a big part of the risk and the opportunity that markets price into companies like this. Amerisur do operate in a relatively low risk area, as compared to oil basins in other regions both onshore and offshore. According to management, the average success rate since 1966 of a well bringing oil to surface is 85% in the area. Another caveat though, �bringing oil to surface� is not the same thing as flowing commercial barrels. If all three wells came in it�s likely management would continue to drill further wells here using up the spare slots on location which would be the best result for shareholders. Licence CPO-5 (Amerisur owns 30% with ONGC as operator) is also a three well campaign targeting the Indico, Aguila and Sol prospects. Management gives a net 40.58 mmbo (million barrels of oil) estimate for all three wells combined, and it flags this estimate as conservative. Two interesting facts about these wells are: Firstly, the nearby Maripasa-1 well was previously a success, testing at 5,400 bopd but choked back to 3,000 bopd of current production from only 10ft of perforation, out of 110ft of pay depth. Since initial production in November 2017 there has been no drop in pressure or flow at all and it could be that this producing asset has much better sizing than initially appreciated. The 10ft of perforation is likely to be increased by another 22ft which should, therefore, increase the wells production rate. Secondly, in the block to the north (LLA-34) are a series of producing fields (combined production 55,000 bopd) owned by Geopark and Parex. Through a series of successful drilling campaigns these fields have significantly increased in resource and production in the last three years. Amerisur�s three drilling prospects are all on trend but focused on different structure types which have been somewhat derisked by their similarity to the successful Mariposa-1 well. Any success from each of these wells could make a significant difference to valuation. It�s worth noting that Geopark has taken its Colombian production from 3,440 bopd in 2012 to almost 22,000 in 2017, mainly on the back of its assets to the north of CPO-5. Putumayo 8 (50% ownership) sits to the west of the currently producing Platanillo block and the all important OBA export pipeline. Here AMER is due to drill two wells, the first one is actually being drilled from their neighbours existing and producing oil pad but into Amerisur�s block meaning any success can be brought onto production rapidly whilst the second well has a choice of two objectives and a final decision will be dictated by results from the Platanillo drilling (mention

This has been posted on the ADvFN board: https://*********************/blogs/the-naked-fund-manager/the-naked-fund-manager-analysing-an-e-p-like-amerisur Oil prices have been on a tear so far this year (much to this commentator�s surprise) and correspondingly many UK-listed oil related shares have gained significantly year to date. Therefore, I thought it might be of interest to briefly outline how I think about an Oil & Gas Exploration and Production (E&P) company. How to look at a company like Amerisur One laggard that is in our fund (so I fully accept mine is a conflicted view) and has taken a hit this morning is Amerisur. The shares are broadly flat on a 12-month view, compared to Brent which has steadily risen 65% over the same period. How do production and the Balance Sheet look? Amerisur is a Colombian-based but AIM-listed business. It has a market cap of US$270m and a net cash balance sheet of US$39m. In 2017, production averaged 4,857 bopd (Barrels of oil per day) with an exit rate at year-end of 6,951 bopd. That delivered revenues of $92.5m and Operating Cash Flow of $30m. That�s a market valuation of exactly 9x reported Operating Cash Flow. Management usefully publish their production every month. Frequent and regular transparency is paramount when looking at these sorts of companies and this level of disclosure is a real rarity in the sector. It is to be applauded. Amerisur has averaged around 6,100 bopd for the first five months of 2018. Although today�s announcement for May shows there have been production issues such as lower production rates and increased water cut, meaning May�s oil production was only 4,800 bopd. This hit shares c.9%. What are Management planning on drilling this year? Whilst we are now in June and Amerisur has so far not drilled a single well, Management are hoping to complete 14 wells by 2018 year-end in a $61m capex program; a significant investment amount when set against their existing market cap. This second-half-weighted drilling campaign should generate a veritable avalanche of upcoming news flow. The recent AGM presentation gives an excellent overview of the business and planned drilling campaign: Http://www.amerisurresources.com/investor-centre/reports-and-presentations and is useful to have to hand when reading this. One thing that attracts me most to Amerisur and this drilling campaign is that, if successful, nearly all of the wells can be rapidly hooked up onto production rather than suffering from a long lead time to cash flow as often can be the case for smaller oil stocks. The three wells at Platanillo all focus on the N sand opportunity and are drilled from a single pad that has capacity for six wells from this location. The first two wells are vertical and an excellent result for each would be 1,000+ bopd whilst a poor number might be 200 bopd, both eventualities are quite possible; the third well is a horizontal well

What disappointing me more than the declining production is that the 'exciting' drilling programme is forever being kicked down the road. It was June, then July, and now it is 'third quarter' - which just gives them leeway to push it into August/September. It's like a bad dream where the faster you run towards something, the further away it gets! I was also disappointed there was no mention of the further perforations of Mariposa. Has the work started yet? If not, that well will presumably be taken off line so that next months production figures could be even worse!

JTD: Keep up the good work. Your research is the backbone of this Board and much appreciated by everyone (including those who post rarely but read everything daily). Your contributions are always well researched and insightful and, I suspect, come from a deeper knowledge of the oil industry than most of us possess. Many thanks.

My dream is that all three come in with consistent pressures and the conclusion that they are a continuous field with the source/kitchen lying somewhere to the south in the as yet unsurveyed remainder of the CPO5 block. Ah well, it does no harm to dream!

They always know more than we do. Inevitably. But, until it is proven, it wouldn't be classed as insider dealing.

Pickedpeck, I am sure your comments re. CPO5 resonate with many. The P2 stated by Amer is totally at odds with the excitement the Mariposa find created and continues to generate. Indeed the interest in this block has grown as the testing has progressed. Barely a week goes by without the drilling programme changing and accelerating and Amer has now picked up the baton and gave the block (which was once referred to as 'non core') a lot of attention at the AGM. Indeed, those who attended have reported mention of Indico as being 'full to spill'. Where did that come from! There has been no drilling as yet at Indico, so I am assuming something from the Mariposa tests have led to that speculation. But what remains a mystery and leads me to question if, and how, they could be connected. Even the P2 figures given by Amer are puzzling because I don't see haw any reserves estimates can be given until testing is complete and, so far as I am aware it is still on-going. All this leads me to be quite excited about the CPO5 prospects and I am eagerly waiting for the drilling to commence to find out more. I suspect ONGC and Amer know a lot more than they are prepared to make public at this stage!

Sad conclusion to my days with Ithaca. Unless that is I decide to retain my stake in Ithaca Mark 2 with 70% owned by Delek as foresight intends. I know Londoner was not in favour of this option but I am not sure why. How do others see the pros and cons. It could work out very interesting and lucrative if Delek decide to use Ithaca as an acquisition vehicle for their North Sea ambitions. With their financial clout, they could really milk the Stella Platform and make a lot of money. The question is how tradeable will they be on AIM with such a small proportion of available shares. I suspect the vast majority of shareholders will use the extension period to get out, leaving a very small rump.

What a balls up. Delek need to up the bid by 5% just to get it back to where they were when shareholders decided to reject it! You couldn't make this farce up. If the pound strengthens much more we will be giving the shares away.

More good stuff from Londoner: Ferret, thank you for your post. The Total bid sequence illustrates the operation of the mandatory extension. On the 9th December 2016 Total Energy initiated a hostile offer for Savanna with a minimum tender level of 66 2/3 % of common shares. The deadline for Total’s initial offer was the 24th March. The 105 days between the offer date and the closing deadline is in accordance with Canadian law, allowing the target company 105 days to defend against the bid – a hostile takeover. Canadian law allows a minimum 35 days where the bid has the support of the target’s board – this is the case in the Ithaca bid. On the 1st March Total increased their offer. On the 13th March Total waived the condition requiring 66 2/3% of shares to be tendered, falling back to the ‘statutory minimum condition”, namely 50% of outstanding shares not controlled by Total – Delek’s target requirement for Ithaca tenders. On 25th March, the day after the deadline, Total announced the take up of the 51.6% of shares tendered to the offer – a successful bid (just). (So united, small shareholders could make a difference in the Delek bid) Also on 25th March Total announced an extension to the tender until 7th April. This is the mandatory extension which allows all remaining shareholders to tender their shares. The news release Ferret links to is a warning to minority shareholders, dated 3rd April, advising them that the offer may not be extended beyond the new expiry date of 7th April. To be crystal clear, if Delek announce success in their bid on the 21st April, or possibly a later date if the bid is raised, then they will also announce an extension to tender of at least 10 days. There is no reason for shareholders to remain minority shareholders unless they want it. I don’t want to be a minority shareholder but I do want to maximise my investment in Ithaca so I will wait until Delek make an announcement on either raising their bid or on a successful tender response before I take any action. Londoner7 Read more at http://www.stockhouse.com/companies/bullboard#O8S5P3tmDVjhqR3Y.99

Londoner 7 has posted this on another massage board but it is important and I hope he won't mind my posting it here: I vote, unite! If Delek succeed in this offer, at the current bid price or at a higher bid price, I do not wish to be a minority shareholder. However, I will ignore the initial deadline of the 20th and any earlier deadline set by my broker safe in the knowledge that if Delek succeed in their offer they are required to extend the offer period by a minimum of 10 days which allows me to tender my shares at the final bid price. Subsequent to the expiry of the initial date (20thApril) my broker (and yours) will notify me (you) of the revised deadline. This is the ‘mandatory extension’, to which impega and others have referred. Ithaca makes no reference to this extension in their circular because they are not required to do so. However, there are references to the ‘mandatory extension’ in Delek’s circular because that is the formal bid document and Delek are required to refer to all elements of the bid process, including extensions. Trust me, they wish they didn’t have to. Instead they go to great length to highlight the possible difficulties a minority share holder faces if they do not accept the ‘offer’ – note they do not say the current bid! (Put the Delek circular into an app like Acrobat which has a word search and search for ‘mandatory’.) I suspect it is the warnings to shareholders not taking up a successful offer and becoming minority shareholders, which is leading to confusion and fear on this board. The key part to understand is that the offer period would have to be extended beyond the 20th April if Delek is successful, or raise their bid. Some recent comments are misleading on this point. I am not accepting the initial bid because if Delek fail to achieve the required 50% I believe they will raise the bid price. If you are fearful that Delek fail in their offer and walk away without raising the bid I wonder why you do not sell in the market. As I’ve said before it is in my interest that weak shareholders sell into the hands of stronger shareholders. Some of the new buyers may be playing for a couple of cents but some will be holding out for a higher bid. Londoner7 Read more at http://www.stockhouse.com/companies/bullboard#Q2K26yYpHgGrQGCj.99

As Crow on the Stockhouse board has pointed out C$1.95 currently equates to 116.8p. So that is what tendering your shares will get you, assuming the pound doesn't fall further when Brexit talks start.,not the measly £1.20 they were originally peddling. At this rate we will end up with a negative bid premium! The recent results were very positive which makes the bid appear even more like daylight robbery.

The other thing I find odd is that Les Thomas/ 'Ithaca' are running round trying to drum up support for this bid. As things stand LT is still supposed to represent all the shareholders of Ithaca, not just Delek. If there is any persuasion or negotiation to be done let Delek do it themselves!