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Trying to value a company like Amerisur is, in my opinion, very difficult and although I don't agree with everything in this piece of research by the Naked Fund Manager, I do agree with the gist of it. And I think that it's certainly essential reading for Amerisur investors. Where I have reservations is in terms of the management. In my view, they have over promised and under delivered. In large measure because the institutions have allowed them to. Having said that, the company has lined up a variety of near-term opportunities that could be transformational. https://*********************/blogs/the-naked-fund-manager/the-naked-fund-manager-analysing-an-e-p-like-amerisur

Just to elaborate on the earlier comment. President gets paid in Pesos at an equivalent rate on the day of payment. Any fluctuation in the Peso against the US dollar in the period between invoicing and the actual date of payment is irrelevant for the company. Obviously, if Argentina was in a period of Weimar style hyperinflation the situation would be completely different. However, the very small fluctuations in the Peso against the US dollar over the course of a few hours would, in my view, be insignificant.

For those concerned about Argentina's economic problems, it might be worth bearing in mind that President is paid in Pesos on the payment day and not on the date of invoice. I suspect that some investors may have been concerned about fluctuations in the currency. My understanding is that this is a non-issue. It can simply convert Pesos to US dollars on the same day if it wishes. As for the company's difficulties with Puesto Guardian. This concession has 32 years left on it and the mandatory work, totalling some US$10.75 million, was completed in 2016. Basically, it has a lot of time and leeway to fix the issues.

At long last, I think that the company is managing to get its message across to investors. Having presented at both the Mello event at Derby and the ShareSoc meeting at Birmingham in recent months, the share price has moved northwards and is supported by relatively high volume. Although the company stands to benefit from the Bus Services Act 2017 and the introduction of locally elected mayors, I am not entirely sure whether the market has got it. With established depots offering capacity, the company can make bolt-on acquisitions without raising its fixed costs. And it appears to be in a healthier financial situation than some of the big operators. By the way, it might be worth mentioning that this is a company whose dividends have been rising for the last 7 years. I am an investor in the company but it's not without risk. There is no guarantee that locally elected mayors will act on their powers over public transport. My golden rule is not to invest any more than I can comfortably afford to lose in any single company. And this is no exception.

After its near collapse in 2016, Trinity Exploration has, in my view, managed to successfully restructure. It now has a portfolio of assets ranging in scale and timeframes. The backdrop is a company that is profitably producing oil from its current assets and is operating a low-cost model with multiple opportunities for growth. Its financial re-structuring involved putting in place a regular repayment schedule for debts owed to the Trinidadian authorities as well as the issue of Convertible Loan Notes (CLNs). However, it's ahead of schedule in terms of its repayments and the CLNs appear likely to be repaid early, in which case there will be no dilution of the stock. Put simply, the company is probably going to be debt free within 7 months. With 1,165 wells, 182 of which are active and operating across 9 licences, its scope for development is substantial. Through an ongoing programme of recompletions and workovers, its production is on an upward trajectory. And it has the ability to scale up. Its portfolio contains some very sizeable potential targets. In 2013, it drilled an exploration well, TGAL-1 in its TGAL field. This intersected five oil-bearing reservoirs. With a recovery rate of just 12%, it estimates that this contains some 14.5 million stock tank barrels. Trinity has a 65% operating ownership of the field. The other 35% is owned by Petrotrin. Trinity is now putting together a field development plan that it will submit to the authorities this year. As with any investment, there are risks. And I should point out that I am invested in the company but I certainly would not invest a penny more than I could comfortably afford to lose. However, I think that it presents a low-cost model that could be scaled-up to a reasonable size. And, it's easy to forget, it's based in a very positive jurisdiction for investors with an established oil services sector.

Of course, I am aware that Amerisur's shareholders are looking for capital growth. However, oil prices are now at their highest point in over three years. The company is accruing cash on a daily basis with a drilling campaign that is fully funded at US$45 per barrel. I would have thought that now is an ideal time to start paying a dividend. An immediate effect would be to give the share price some support. It would be a more attractive proposition to income-seeking institutional investors. Moreover, it would also demonstrate that this is not a company run simply for the benefit of a Board of Directors with very little skin in the game.

By the way, does anyone have any idea what Alex Snow does for his money as a Non-Executive Director? On examining his details in the Annual Report, I am left with the impression that he is there to schmooze the City. That's fair enough. But what does he do? Does he have any targets? Or metrics by which his performance can be judged? I would have thought that the most obvious metric would have been the company's share price and yet over his tenure, he was appointed in May 2017, the price has fallen by about 35%. So what does he do for his US$90,000 pa plus, I presume, expenses? Incidentally, I thought that Stephen Foss (US$94,000 pa) was also responsible for shareholder relations. Both are up for election and re-election at the AGM.

Jointhedots - That was very interesting and raises an issue that I would like addressed. The Companies House data appears to show John Wardle's residence as being Colombia. My understanding is that he has been based there since 1994. And yet, according to the latest Annual Report (P51), he receives an expatriate living allowance. The amount or the proportion of his salary is not revealed. But it does seem odd as he gives the impression of being a permanent resident of Colombia. I thought that expatriate status benefits were used to attract people for temporary positions. This appears to be ongoing and permanent. As for having a Finance Director based in Wales instead of Colombia, this is, in my view, bizarre. General and Administrative expenses rose by more than 36% from 2016 to 2017. Yet the headcount has only increased by seven people. All of whom were employed in administration. I would have thought that a having the Head of Finance on the ground would have been a given. At the end of the day, I believe this to be a very sound company with some excellent assets. However, I have my doubts about the ability of the current management team to take it further. And there definitely seems to be a lack of alignment between the interests of the Directors and the shareholders.

A perennial issue that I have with Amerisur is that there appears to be problems with the execution of its plans. The broad strategy seems to be sound. The fault line seems to lie in the execution. It's unclear whether it's being deliberately overoptimistic in its ambitions or whether it's genuinely mistaken. For sure, it met its target of exiting 2017 at 7,000 BOPD but this was clearly a sleight of hand. The implication was that this would be a base level for further growth in 2018. That has not transpired. Underpinning Amerisur's plans is its management's focus. I am not convinced that the Executive Directors are working full time on the company's business. The CEO and Finance Director have interests in other listed companies based in Africa as does the Chairman. How much time do they actually spend on Amerisur's operations? Are the Executive Directors contractually obliged to work full time? Their rewards are high, especially so, considering low wage levels in Colombia. The implication is that they work full-time but is that the case? How often are they out of Colombia? Presumably, the institutional investors know the answers but I would not like to bet on it. Considering just how much of the drilling campaign is being loaded into H2 2018, I would argue that we need the complete commitment of our managers. If it's not there, we need to replace them and very quickly.

One of the reasons I will reject the Remuneration Report at the AGM is because the company's Long-Term Incentive Plan (LTIP) is so badly structured. The awards vest in full in three years. It gives the Executive Directors the chance to receive 50% of the awards if the stock price returns to a level it was at in early 2017 when the WTI price of oil was US$54 per barrel (It's based on total shareholder returns and so I am assuming that no dividends will be paid). The other 50% of the awards can be achieved, in full, if the total shareholder returns are in the upper quartile compared to the comparator group at the end of the three years. I would advise shareholders to look very closely at this group. Most of the companies included lost money in their last financial reporting periods. I would argue that it's quite likely that some will not be in business in three years' time. And just a reminder for those yet to cast their ballots. Proxy votes must be with the company's Registrars by 11th May. There's still time to reject something that is clearly not aligned with shareholders' interests.

With the AGM coming up on 15th May, it might be useful to remember that proxy votes need to reach the company's Registrars by 11th May. There is a lot at stake. I will vote against the company's Remuneration Report. Put bluntly, I don't think that it aligns the Directors' interests with those of the shareholders. I will vote and I strongly suggest that all shareholders do the same. And I would not depend on institutional investors making the right choices. Incidentally, I have attached a link to the proxy vote form. It may be valuable for further discussion. Are we getting value for money from the Directors seeking re-election? We have had the same auditors since listing. Is it time for a change? I think that the company could be set for major growth but I am unsure about the commitment and ability of the BoD to exploit its assets to the full. http://www.amerisurresources.com/images/rns-pdfs/ProxyForm-for-AGM-2018.pdf

Leaving Amerisur's Directors to their own devices has clearly not been a good idea in terms of their remuneration. There appears to be no connection between total shareholder returns and the rewards given to the Directors, who own a little over 4% of the business. In the forthcoming AGM, due to be held on 15th May, I will vote against the Remuneration Report. As a slight aside, I would urge all shareholders to take an active interest and cast a vote. The company seems to be at a fork in the road. With good management and a degree of luck, the prospects could be excellent. But this appears to be a team that needs a wake-up call and possibly some sackings. And that can only come from the owners of the business. That is the shareholders.

Yesterday's RNS was, in my view, quite unclear. The US$3 million dollars in oil sales relates to its total oil sales from Argentina and not simply from its acreage in Puesto Flores. The irony is that apart from that obfuscation, deliberate or otherwise, it was actually quite an upbeat report. The company is obviously very focused on generating cash. It also made the point that the wells going through the workovers were already fitted out. That is to say, they can be rapidly brought into production.