Amerisur Resources Share Discussion Threads

[fadilz] 02/3/2017 10:09

al101uk I will reply when the dayjob allows :o). Hopefully this weekend. Should be fun to revisit this topic.

[al101uk] 02/3/2017 09:43

"people appear to judge management by the share price alone."

Management has been the hot topic for a while, the overriding majority of investors are making decisions purely on the narrative and that's the overriding narrative. I think you'll find people are more nuanced than you give them credit for. It's a talking point on advfn and there is no doubt that poor management has a detrimental effect on share price. We have some very good and well respected narrative investors here and just like the other two disciplines, they are well worth listening too.

Just as above you can factor bad management in to your numbers by not giving them any credit for future improvements. Leave the pipeline at 3K/4K/5K bopd, assume other wells are worth nothing, assume they can't re-enter previously producing wells etc. Assume the pipeline is a huge white elephant etc.

[al101uk] 02/3/2017 09:32

fadilz,

You give me too much credit. My model has drifted further in your direction since we started exchanging views. I realized that more of my numbers than I cared to admit were guesses and so it makes sense to use what you know and simplify the numbers. It also makes things easier when generating new scenarios.

So here's some questions for your model:

1. Do you use the current (known) production rate, the potential rate (given known drills) or an optimised rate based on reserves (I agree with your ideal production level assertion)?

2. Do you use todays oil price or a projected price over the next 10-15 years?

3. Do you use current reserves or do you factor in that reserves are being downplayed because we are not producing?

4. Do you factor in cash, capex/ value of pipeline?

There is no correct answer to any of the questions above, answer all of them in a way most damaging to your NPV and you'll get a share price that would have people here jumping off tall buildings. Use more generous assumptions and you can get a price that would make you a hero in these parts.

I don't think any answer is valid/invalid, what matters is that you know you were generous in that assumption or were giving your worst case scenario in another. The assumptions matter far more than the end result and they matter in the context of where they are on your scale. Are you playing out your fear or your greed?

It's also important to know what the value you're coming up with is. Is it the price you want to enter, the price you want to exit, a punt at fair value or an analysis of the current share price?

I think you have to be careful when stating that the share price is being driven by fundamentals and that a fundamental analysis mostly justifies where we are. It does, if that's what you want it to do. You have to be very self aware in your bias's and be upfront in the assumptions.

[lucyp00p] 02/3/2017 09:08

Perhaps the market now feels that the board is so greedy that no matter how successful the company gets, all the profits will be creamed off so why buy the shares at all

[fadilz] 02/3/2017 08:59

al101uk, your posts and those of a few others are why I visit this board.

You put some challenging and interesting points.

First I don't have your skills in creating a fundamental model, nor I suspect is the required information visible to me. However, I do know how to use a spreadsheet and I can work an NPV calculation. My basic position 18 months ago was that

- *if* the company was valued at x per share with a known set of NPV parameters - ie income over time, derived from production rate, reserves and profit per barrel - all of which are reasonably well known
- *then* you could model how the share price should move if any of those parameters changed. eg if reserves double, production rate doubles, profit per barrel changes, etc.

This model was about estimating then impact on share price of a *change* in any of the parameters - *all other things being equal*.

My conclusions from playing with this 18 months ago were
- NPV used in this way was a pretty good model of observed share price, and I have not changed my mind on this - though I fully agree that sentiment plays a big role in amplifying swings.
- there is an optimal production rate for given reserves (make it last 15 years +/- 5).


My main beef with many of the comments here, is that people appear to judge management by the share price alone. For the reasons above, I think this is both lazy and wrong, since much of the share price drop van be explained by change in the NPV and the price of oil.

Actually, I think we agree on this.


Why stay? This is the most challenging question, and I will certainly revisit the NPV to see how $60 oil plays out with current parameters, and with my expectations, which are
- I think there is considerable exploration upside,
- I observe that most things are cyclical, sentiment especially
- AMER have sufficient financial strength and nous to exploit opportunities in this downturn.


Top priority now is to increase resources, and make the OBA work - both of these will increase value. POO will will look after itself, or not.

[meneither2] 02/3/2017 08:07

I suspect investors now want actual delivery as opposed to management targets which they have consistently failed upon. So if they can actually produce 7200 bpd we might move North a bit instead of just talking about it.

[marnewton] 02/3/2017 07:41

Enjoy the sun westie;¬)

ATB
Martin

[francis55] 02/3/2017 07:35

If I were buying today for first time what would i see as positive or negative? I would be doing my sums based on $50 a barrel against last years price = profit. OBA on line = profit. No debts to pay = profit. Each quarter result has produced spike in share price = profit. Acres of land owned and potential other finds = profit. Social unrest and potential delays = delayed profit. BOD missing targets = delayed profit. Shareholder negativity on this string = delayed profits. Large invester v small investers and panic selling by smaller investers who gamble on a share rather than invest in a business = todays share price. This share is a bargain and once results in April show a return to profit we will all be happy.

[westmoreland lad] 01/3/2017 22:00

Thx Martin.

Well someone has sold down to these levels, call it manipulation if you like and there has to be a reason, which will come out in the wash. Clear to see how every day over the last couple of months the buys are met by equal sells.

No point in mentioning the FCA. Won't get Clarke chained up imo..

I've an order lodged at 20p and won't be looking in until back from the sun.

Hope you other ( old timers ) / long term holders are covered with oilers elsewhere with two month gains averaging > 37% tonight.

GL

[marnewton] 01/3/2017 16:29

One word: sentiment.

As oversold as it is such conditions can persist. And the death cross hasn't helped.

I'm still awaiting the merest hint of a chart reversal before buying...there's support hereabouts - 22.00p was the September low.

M

[filterwest] 01/3/2017 16:18

Is someone is manipulating the share price and I will find him and beat the living daylight of him. The share price 22p when oil was $30. The oil is $56 now.

[ladeside] 01/3/2017 16:17

I don't think you'll find many "impatient" on this chatboard. Most of us have been here since GMS & Chaco days.

[charlieeee] 01/3/2017 16:07

The "sneaky bid" theory falls down on the evidence at hand, unless GC is out of the loop completely or having a senior moment of magnitude.

After all, it was only a couple of weeks ago that he shared his vision on "his" company, that with political change in Colombia, Amer's first mover advantage in such a prospective area would attract a major.

On a more rational analysis, one has to see that having an incident at this moment in time would be most unfortunate, as it could blow the USP (that Colombia is now open for business) right out of the water.

The problem here is quite straightforward: the unscrupulous are exploiting the impatient.

[fsawatcher] 01/3/2017 15:36

22.25p and still no buyers or bounce


some ones somewheres knows sommat

how much does new pump station and debottle neckin cost?

[ladeside] 01/3/2017 15:17

Ace, call me a cynic but I've seen this sort of thing happen elsewhere, granted with smaller companies and rogues at the helm, but the share price is manipulated downwards and then a bid appears offering what seems like a good premium to sp, however the reality is it's at a massively discounted price and let's just say those who have a large holding are "looked after" by the predator while the rest of us get shafted.

Please note, I'm not for one minute saying this could happen here, however I'm not surprised by anything that happens as corruption seems almost like an accepted part of everyday life nowadays....

[aceuk] 01/3/2017 15:07

Anybody want to tell me again the share price is not/has not been under attack by people with far deeper pockets than us who possibly want to sort out incompetent non-managerial directors?

[ladeside] 01/3/2017 14:45

The share price was pretty stable around the 30p mark when poo was consistently trading at over $15 per barrel less than current prices.

Add to that the fact that our pipeline was not yet completed and FARC were still on the rampage and one must wonder what the hell is actually going on here.....

[charlieeee] 01/3/2017 14:11

Thanks Tony.

That is very welcome news: certainly moving in the right direction and should se the company cash positive until the serious capex gets going.

[fadilz] 01/3/2017 14:00

Aceuk I was not specifically commenting on your post - I only occasionally read posts here, but whenever I do, people seem to be blaming share price malaise on management. I disagree for reasons stated.

It may well be that management are at the trough, and that is wrong.

Someone with deep pockets controlling the share price? IMO, respectfully, unlikely - but if so, more likely to be to do with poo, etc.

[tonyrelaxes] 01/3/2017 13:07

charlieee

OBA 4,006 on consecutive days just over a week ago.

Don't let the BoD know you now know this - it's not in their plan that PIs know such information!!

[aceuk] 01/3/2017 12:35

fadilz in my opinion you completely miss my point - the things you mention may be a minor factor but not the factor. Yes John Wardle is competent but the rest of the management team leave something to be desired - their only competence seems to be in raising money for the company and diverting it to their own pockets.

Somebody with far deeper pockets than us is the only reason the share price is where it is.

[charlieeee] 01/3/2017 12:23

One sniff of that Serinco Rig D-10 on the move to Pad 2N should change sentiment here or perhaps an update on increased OBA throughput.

It is 5 weeks since the last RNS and it is quite reasonable now to be expecting a progress report on Colombia: quite apart from Plat 22, we do want to know figures for the OBA and BOPD.