Amerisur Resources Share Discussion Threads

[fsawatcher] 21/12/2016 14:14

time GC lost his job

he can go work over at ironfeld

he not spend enough time with amer to justify his wages and bonus

he goin to get boot at agm coz i make sure of that

[valentine] 21/12/2016 14:03

GC sees us as turkeys, cept we've been stuffed for years.

[al101uk] 21/12/2016 13:58

fadilz,

You're a purist :-)

I was too, the numbers tell all and you should base your investment decisions on them accordingly.

The problem is that current production and current reserves are priced in, so you're not looking at the numbers and seeing value, your looking at the potential... you're looking at the narrative... you're looking at managements ability to make good use of the companies capital and infrastructure.

As a result management competence, honesty and credibility are absolutely critical and here we find them lacking. There was an article on Motley Fool back in 2014 talking about the construction of the pipeline and how it was a company transforming event, that it was time to buy... in 2014! There were countless RNS's through 2015 & 16 about the pipeline being imminent and immediately being ale to deliver 5,000 bopd. Construction was said to take approximately 30 days, over a year ago!

Read through the RNS's available on the Amerisur website and you come to the conclusion that either Management are liars or incredibly incompetent. Either way what that means is you can't believe a word they tell you and as a result you can only value the company on current reserves and current production (as a purist).

I've always given them some credit in my valuations, although I considered them very conservative, I didn't stick to quoted reserves, I assumed a little growth, I assumed they would do what they said they were going to do. They simply have not delivered since getting a lucky hit and developing a single field... they've been like suckling pigs ever since, issuing options to themselves, congratulating themselves on increasing shareholder value with convenient starting points for their claims.

"What have they done for me lately?"

And if you think this is all Colombian issues and to be expected, check KENV where I posted a stream of RNS's practically identical to the ones we find here. Check IRON with a similar stream of RNS's promising the imminence of project development and how much greener the grass will be on the other side. This is a management issue and this board should be sacked!

For me, this is the punt of my portfolio, but I got carried away and believed the hype. I have £10K of trading stock I intend to dump at break even. I then have another £10K-ish that I intend to sell to reduce my core position, beyond that I'll play the game for a little longer, but Amerisur are well and truly under notice at the moment.

[foiledagain] 21/12/2016 13:40

Eddie it was an example of pumps/pipeline size as it made clear. It did not pretend to be like for like did it? It followed the explanation of the processes to get an efficient pipeline system, something my company is involved with 7 days a week 365 days a year. So when I suggest even an apprentice could have planned things better I'm not joking.

Of course its relevant, and if Amerisur had given it a bit more thought perhaps we wouldn't have the farce of paying for a pipeline that does not even currently transport the MAXIMUM guaranteed 5,000bopd without upgrading facilities.

The TE pipeline is 310m long, so whether you go via an interconnector or not any pipeline is restricted by its weakest link. That pipeline was upgraded to 450,000bopd.

Or do you think awarding massive amounts of options for a pipeline not even in existence, or do you think its good planning then when it is brought into being finding it can't even pump the 5,000 maximum without an upgrade?

Still holding, as there is still potential, but the jam tomorrow when the directors got the jam yesterday is wearing thin.

[ladeside] 21/12/2016 13:17

Cutting out all the "noise" as it were, the bottom line is that the shares are currently trading at 25.75p, the question which should then be asked is are they good value at this level ?

Taking in risk, whether it be political, geological, or self made by our own board and then weighing up against potential upside from this share price and I'd still say we are a very good bet, especially with the Oil sector coming back into favour.

Having said all that I'm not happy about the way GC has been going about his business recently and again being treated with complete contempt as a PI is very, very annoying, however I'm willing to make allowances if he can finally deliver for us........

[fadilz] 21/12/2016 13:13

Price goes up and everyone is happy. Price goes down and the directors are all shysters.

This is a human reaction but wrongheaded, and I broadly agree with bigbas.

What really matters to share price is
- Profit per barrel: ie price of oil, and costs
- How much we can pump: ie capacity of wells, transport, etc
- How long we can pump it for: Reserves

Increase any one of those and you increase share price. All of the above are taken into account in the NPV model, and it really does work in predicting the movement in AMER share price. On this I completely agree with al101uk.

The optimal pumping rate is one where reserves last 10-20 years. Added reserves count for little in the NPV calculation, if the effect is to increase life to much more than 20 years. Added pumping rate counts for little if the effect is to reduce life below 10 years.

AMER now have to increase reserves. Hence the importance of drilling. With current reserves, there is not much point in pumping above about 7k barrels a day. The reason they have quoted this figure a lot is no accident.

The reason they want the pipeline is to do justice to increased reserves, and to increase profit per barrel.

Simple, when you view it through NPV.

[eddie_yates] 21/12/2016 12:34

FoiledAgain
Your example is not really relevant here as you use a pipeline which is 3280km long whilst OBA is maybe 1000/th of that with a fraction of the capacity

[foiledagain] 21/12/2016 11:01

Bigbas. Of course long term aims are important, but then directors shouldn't be taking short term options for long term potential yet to be recognised, and shouldn't be undertaking planning of a pipeline that can't even manage the 5,000bopd guarantee maximum throughout. Its just incompetence, not long term planning.

There is though a big problem with having overcapacity in a pipeline. A pipeline's efficiency is based on various calculations on assumptions such as Newtonian flow, which assumes a circular pipe, to Bernoulli equations, Colebrook, or Zigrang-Silverster equations.

If you have a substantial overcapacity then the formulae used for flowing is incorrect, which often results in a greater pumping requirement for less throughput and more costs.

Pipelines operate at or near their designed capacity for good reason, with the exception of pressure tested capabilities which of necessity over and above maximum intended pressure.

As an example the keystone pipeline pumps will draw substantial amounts of power, 25Mw for each pumping station with 41 pumping stations at 80k intervals, to pump an estimated 830,000bopd of crude. Each of these pumps is 6500Hp and each pumping station a total of 32,000HP of pumping potential.

[dayway123] 21/12/2016 10:06

Just about sums it up fsa.

[dayway123] 21/12/2016 10:05

Just about sums it up fsa.

[fsawatcher] 21/12/2016 09:42

the board is certainly buildin for longer term

they stretchin this one out nice and slow so they can bank as many options as possibles for themselves

they in no rush coz they get salaries every year

shareholder have to vote these slime balls out at agm coz they run this company to serve themselves

they dont tell whole story to shareholders

and i bet that recent put licence block acquisition gonna be followed by a relinquish notice on area that indigenous folk live in

colombian gov give amer some new put licence blocks coz they know amer might lose some soon

this stock turned from star to terd in last rns

[al101uk] 21/12/2016 09:00

bigbas,

This is a word for word transcript between GC and a potential investor apparently:

"I'm sure I'll take your money with pleasure!" GC said. "I'll issue options every week, and returns to shareholders every other day."
The investor couldn't help laughing, as he said, "I don't want your shares – and I don't care for your returns on a risk weighted basis. I think the OBA will take too long."
"They are very good returns." said GC.
"Well, I don't expect them to-day, at any rate, think I could do better elsewhere"
"You couldn't have them today even if you did expect them," GC said. "The rule is, returns to-morrow and returns yesterday – but never returns to-day."
"The returns must come sometimes; 'to-day'" the investor objected.
"No, they can't," said GC. "It's returns every other day: to-day isn't any other day, you know."
"I don't understand you," said the investor. "It's dreadfully confusing!"

[eddie_yates] 21/12/2016 08:33

I agree wholeheartedly with Bas

[bigbas] 21/12/2016 00:15

If you stand back from the current mess and take a longer term pragmatic view, I can accept that the board were aware of the issues on the other side, but the board is building for the long term and getting all its ducks in a row - I hope !! Why build a small pipeline when you know that in 2,3,5,years time you will fill the capacity of the current pipe. So it is under utilised for a couple of years - so what - in the overall frame of things it does not make much of a difference - except to us impatient PI's

Someone likened this to having a ferrari with a fiat panda engine - I see it more as a ferrari with a puncture - something that can be mended and sorted - ok it may take a year - but the oil is not going away.

In the mean time - we buy up land that will feed the pipeline for the next 20 years or so, pump others oil across the water and wait for the poo to rise - seems simple enough to me. I have learnt a long time ago - to my cost (it very nearly bankrupt me) that the oil business is a long term business.

Now as to options - that is another question - one of greed

BWTFDIK - just an alternative view. We know what we know - unfortunately we dont know what we dont know !!

[9barracuda] 20/12/2016 18:55

I have a few locusts you can buy from me if you need them urgently?

[lucyp00p] 20/12/2016 16:43

Sorry can't talk right now, I have a cricket emergency to deal with

[bigwavedave] 20/12/2016 16:35

I wish my shares came at no material cost.

[dayway123] 20/12/2016 15:53

Lucy. Are you a company PR employee operating under a pseudonym??

[valentine] 20/12/2016 15:33

Back down again...oh well Another year soon, I'm told, and hope springs eternal as long as not a Pueblo Zionbain.

[al101uk] 20/12/2016 15:06

Lucyp00p, stop baiting me ;-)

[lucyp00p] 20/12/2016 14:29

Up nearly 5% on yesterday. I'm glad I bought some more. Anyone else want to sack the board?

[bigwavedave] 20/12/2016 12:39

Also, Malcy says that AMER is the "main player" in Putumayo. I remember JW saying the same a couple of year back. But Gran Tierra claims that prize: "We are the largest landholder in the Putumayo with approximately 1.1 million gross acres (0.9 million net acres) of land".

I don't know who is correct.

[bigwavedave] 20/12/2016 12:18

Malcy's view. I have corrected his spelling.
Amerisur
AMER has announced an acquisition of a couple of assets in Colombia from Talisman. They are taking the remain 50% and operatorship of PUT 30 and a 40% WI in PUT 9 at an ‘immaterial’ cost. This is the sign of the OBA cluster policy in action and at negligible cost, strengthens the asset portfolio by being the main player in the area. Amer shares are well below what I value them at and have suffered disproportionately to the sector, I would expect this to be re-balanced in due course as the local issues are sorted.

[lucyp00p] 20/12/2016 11:37

Bring some eggs

[quidnunc] 20/12/2016 11:31

"Our already very strong acreage position has been further strengthened with the acquisition, subject to ANH approval, of these Talisman assets. The acquisition cost to the Company was non-material. Put 9 is a key block which is located within the OBA cluster, adjoining Platanillo and Put 12 and is very prospective in our view. On the basis of existing seismic data there are several interesting structures which are shared between Put 12 and Put 9. Also, there are independent structures which lie within Put 9. We are currently performing detailed work to link the geological models of Put 12 and Put 9, after which an independent resources report will be commissioned covering both assets. Put 30, a heavy oil play, will be, upon approval, 100% owned by Amerisur and, coupled with its adjoining block Andaquies where we also hold 100% working interest, offers a variety of compelling opportunities."

Putting aside the speculation about the pipeline for a moment, the above suggests an opportunity seized to consolidate in the region even knowing the true causes of the pipe congestion about which there has been much speculation here based on little hard fact.
If those true causes aren't enough to stop the doughty Wardle from throwing good money after bad then we must assume that the current problems are resolvable rather than insurmountable.

Our own experiences with the "Immanence" must have taught us that timescales in this neck of the woods are extremely flexible, so why try to beat them up for something over which they have little control?

Fair enough to criticise on the options, they took them way, way in advance of deliverance and if the above argument holds true, they did it knowingly.

If I attend the AGM next year I would certainly be happy to laud JW for another canny acquisition today.....whilst still retaining the option to object to in-earned options.
Q.