Member Info for Soundingoff

'Ok tell me how much that is worth einstein - oh, you can't, because there is no GSA!

Ok, tell me and everyone else something interesting, like how much of the gas that was deemed to be in the pocket still remains in situ?'

Firstly, it is very easy to see what discount the market applies to a development like ours without a GSA, and it's minimal if you price the gas right in your calculations. It happens all the time in O&G. We already have a GSA offer which is worst case anyway.

Secondly, talk of 'how much is still there' is plain silly. It's been there millions of years already and the O&G industry would not share your views, which are akin to flat earth theory. That's all that matters.

'You seem to consistently argue that what the company says is not what they mean... It's very odd.'

Just like the point about the drilling. What did the RNS say, a three drill programme? How many did we drill?

With experience, I understand nothing is every binary in business.

'Nobody really wanted SM for the past 2+ years and nobody is going to want to be burdened with it in addition to Tendrara. The company knows this, hence they are marketing Eastern Morocco only.'

This is what you assume. What Sound think are unknown. And I think we need to put your assumptions into context- you assumed we were going to drill T9, 10 AND 11 before selling. I can see why you're upset, but it's your own incorrect assumptions that have got you here.

How many times have you seen a company marketing an asset and then the buyer takes over the whole company? I'll answer that for you- quite often. Look up the rules around asset vs company sales and you'll understand why it is done.

I didn't know you worked for Sound wh0s, you seem to know so much?

Just one flaw in your blinkered view- we have provided data on Sidi for the farm-in. They may be the same companies looking at both. Or the company could be purchased and Sidi hived off.

Please think before you post.

'The communication from the company has been extremely clear (incl in today's RNS) that they are marketing ONLY Eastern Morocco, not the whole company. Nobody is going to be buying out SOU as a whole.'

The company have advised previously that they could convert to a full sale of the company if a buyer preferred that route. Therefore the process has been left open to accommodate. Lots of pros and cons with either route and strategically nothing should be taken off the table.

Why wouldn't you Exploration? Why encumber the asset with a loan when it could be cleared from the proceeds of any sale? It'll make the development of the asset easier and funding less risky. All assets are held by current shareholders, so if any don't wish to proceed with Sidi, they can sell. Value is realised nonetheless.

However as Maldini states, we may sell Sidi. The process has left that option open.

There are no consequences other than the loan will in all likelihood be wrapped up in the sale. It's pretty basic stuff compared to some businesses.

'I don?t know why this is outstanding because Schlumberger now has a direct interest in the new 8-year license.'

It still has a synthetic interest in the Horst.

Indeed Longwait. It's all about the discounts. Core value is there in TE5, AMER is yet another example of that.

Agreed Sunday, it will come down to their view. However from what I can gauge, this is still a fair assessment.

Yes Longwait, mid case on everything as a broker note would use. As I say, it's all relatively basic, but the best you can do with limited data. Clearly the reality will be an inventory broken down by each prospect and then the rest included together. All risked.

Sunday- I took our NPV10 for the Horst and then applied acknowledged broker calculations (on other O&G companies) to our appraisal and exploration assets (including Sidi). It's just coincidence, but my calculations are just over £1 on the very limited data we have.

Below is a document which explains how this can be achieved. Pages 14 and 15 provide a good summary.

https://higherlogicdownload.s3.amazonaws.com/SPE/5fc0079d-67a5-4dd9-a56f-190534ef5d3d/UploadedImages/oct%204%20presentation.pdf

AMER turned down an unsolicited offer of just over £200m or approx $250m.

Having a quick scan of their investor presentation shows they have calculated their 'land base' at $367m, which includes various adjustments and the two main assets which is farmed in seismic due to be performed plus the Mariposa and Indico 2P assets calculated using pre-tax NPV10. There are additional resources but of course there has to be a similar adjustment for the seismic included at cost. Without knowing the COS etc, that's harder to calculate.

http://www.amerisurresources.com/images/rns-pdfs/AGM-Presentation-14-05-19.pdf

However the NPV10 is pre tax. If we adjust the Mariposa/Indico asset for 30% Columbian corporation tax, we are left with a calculated value of around £250m or $300m dollars. Key here for Sound holders is our 10 year corporation tax holiday which means the reduction is significantly less. As we can see, the rejected offer is already close to the NPV10 calculations and seismic. Then there is the question of how they value the exploration, some of which is included in the $93m of seismic.

For reference, TE5 is around 50% greater in value than the Mariposa/Indico 2P assets pre tax. The variance is much larger post tax.

I've only had a quick scan, so if someone is more au fait with the company please correct anything noted.

I appreciate you want to be misleading wh0s, so I will be clear.

Interest is not bidding. Interest is reviewing the data and receiving presentations. Anyone with a background in deals will know this is the hardest part of the process. It's incredibly rare for there to be lots of interest and then not receive bids. As there is a deadline for bids, bids will not be received until the deadline. Therefore your definition of 'interest' is naive/misleading.

A sane individual can conclude we have had lots of interest. The only question now is if we receive bids/acceptable bids.

'There's still no indication of any interest arising from those presentations despite us kicking off the process 3 months ago.'

Apologies wh0s, but you're behind the curve again. Our 'marketing' process is data room, presentations, bids. Therefore the interest in inherent as presentations follow. Bids won't happen until the deadline.

You may have missed the email discussed a week or so ago wh0s:

Dear Jamie,

James is travelling at the moment, I hope you don’t mind if I answer your request for information.

Over the last couple of months the marketing process has been in full swing and we have presented to large number of companies. We are now awaiting their response before presenting the outcome and the proposed way forward to shareholders.

All very frustrating to you, I appreciate, but there has been a lot going on.

I am very happy to speak on the phone if that would help. Just send me your number and a time.

Best regards

Brian

————————————————————————

Hi

We have spoken with more than 10 companies, and of course these companies have a deadline well before October 31st.

There has been a lot support for our technical evaluation, which provides companies the opportunity to conduct a speedy evaluation. As to whether this translates into any bids, we will see.

If you need to call, feel free.

Brian

People will make up their own mind and acting like a petulant child when you don't get your way says a lot.

Shaun has saved me the need to reply to your last paragraph.

I'd rather go with what our exploration team told me direct to be honest Wh0s, your information is old and out of date. They advised Shell ARE moving forward with exploration. At what stage, we don't know.

Wh0s- I'm not sure what stage they're at, but Sound team members confirmed on a couple of occasions that Shell are moving forward with exploration and IIRC had some discourse of some kind.

'I've heard from other sources that the chaps from shell have clearly stated yes there's gas in Morocco but no one can extract it and it's in small pockets. '

Really WWW? They must not have told their own team as they have a licence and are moving forward with exploration.

Pathetic.