Amerisur Resources Share Discussion Threads

[thetoonarmy2] 09/11/2017 07:49

Westie may be onto something the FSA register doesn't really report naked shorting, so someone like JP Morgan etc with deep pockets can naked short and Peels or Shore cap will happily let them do whatever they want. On the other side they could be accumulating whilst keeping price down on our side until they get what they want then let the price go.

[boris cobaka] 09/11/2017 05:50

westie the FCA short positions register shows nothing of any significance on AMER at present.

However there is always a chance that the position hasn't been reported yet and it is likely that only positions above a certain % are required to be notified.

Finally AMER does apparently have 1.52% of it's stock on loan as at period ending 31 October which is approx. 18mil shares.

If you are aware someone is selling it's not inconceivable that a short position could be used in an attempt to exploit...

The sol figure though has been declining very slightly month on month from a peak of about 2% in June.

[fadilz] 08/11/2017 21:08

al101uk, we have had October production figures for all of 3 days. lol. Let's just wait a few weeks in order to see how the price moves.

No offence taken, but I'm not sure you've quite understood my argument, nor do I understand yours about sentiment. The model bases on share price at the baseline. The share price embraces all factors at the time, including sentiment, which it assumes remain unchanged.

Anyway I think I have posted rather too much in the last day or two, and will rejoin the debate once we see how production goes, and how the share price reacts.

What I see right now is a buying op, not a flaw in the model.

[westmoreland lad] 08/11/2017 19:35

Yes indeed EBEB -- in the case of RH if a forced seller, what a bitter pill to swallow having to sell today at c 21p where in the full knowledge if he could hold off for say 3 months his remaining stock would / should be worth double at least.

Or, also worth a thought and a alternative conspiracy theory imo is ------->

It is entirely possible the constant selling is a ruse for someone building - ie: shorting to buy lower. There is a clear pattern to this cycle of trades, BUT what is less clear to us is where the accumulative trades are being mopped up should that be the case and importantly who loaned out such a vast amount of shares in the first place and for what gain.

[eggbaconandbubble] 08/11/2017 16:48

Seems to me that Mohammed bin Salman and Rex Harbour are in the same boat. If they stop selling, their asset value will increase!

[al101uk] 08/11/2017 15:15

It's the discount rate :-)

"I have been number crunching all morning and keep coming back to a fair value right now of 46p so I'm not sure why the share price should be trading at such a discount"

I actually stopped bothering to value the company when we got below 20p for exactly the same reason, seemed little point when I couldn't imagine a world where the discounted value of future cash flows justified the drop in price.... I don't see the point of valuation if you can't get a sensible assessment of current price as baseline.

No intention of restarting until there is new information. Likely to be the publication of the reserves report or a good indication of what we have at CPO-5.

All the negatives I was using to stretch down to 20p appear to be clearing and sentiment seems to be improving, hopeful that fadilz model is now broken because that would indicate to me that the company has turned a corner and shortly thereafter sentiment should do the same and from fadilz current target not being met, we should quickly accelerate past it.

Why? Because his model is relative and has tracked share price performance over a period of time when sentiment has been unremittingly negative, somewhat justified by the businesses performance and the general macro environment. Basically investors have only been willing to pay the bear minimum for the shares and in general that view has been re-enforced as we headed down.

The first step away from the model should be the business performing better than the share price would suggest, as fadilz model looks at the business and ignores sentiment that should result in fadilz predicted share price being in excess of where we are (the situation he now finds himself in).

The next step is for the share price to catch up with the business and then, as sentiment improves, overshoot his target price and head towards what in my view is a more reasonable valuation for the company.

No offence Fadilz ;-)

[fadilz] 08/11/2017 14:52

It's a way of evaluating an investment opportunity. If your criterion is for a 10% rate of return, then you look for NPV10 to be greater than or equal to zero. If your criterion is 15% you use NPV15, etc.

The way it works is you enter capital spend as negative, and income as positive for each of a series of periods over which the project should run. In the case of AMER I simply work out profit by year using the simple calculation set out earlier.

Google it, or use Excel to experiment. the example in this write up may help, but try it in Excel using the formula =NPV(rate%, cell range containing net of income/spend by period)

[boris cobaka] 08/11/2017 14:48

Looking at the regularity of these 50k trades I am inclined to believe it's RH.
That being the case it may take a little longer than planned to ping 27p.

No update on COT report yet - CFTC should release data in the next day or two. With crudes recent performance it should make for interesting reading.

[big7ime] 08/11/2017 14:32

I have been number crunching all morning and keep coming back to a fair value right now of 46p so I'm not sure why the share price should be trading at such a discount I can only assume its oversold on bad sentiment and the dragging down of RH selling

Quick question fadilz- what does the NPV10 mean? Net present val what's the 10? Sorry for my ignorance

[fadilz] 08/11/2017 12:39

FSAWatcher:
you jus use production and oil price
--> and reserves

but wot happen to model if ongc buy out amer on cpo5 ????
--> worry about that when it happens

wot happen to model if oba make money from nuther supplier oil ???
--> it's a revenue stream. It has an NPV

wot happen if gt or ongc buy amer out 100% all assets ????
--> worry about that when it happens

you ave to model more than jus oil
--> OK as long as other things equal

[meneither2] 08/11/2017 10:06

Trust here has been badly damaged, consistency going forward will have a positive impact.

[fadilz] 08/11/2017 10:04

Lucy, I'm fully loaded, but we can talk again when share price is 36p, if your offer still stands :o)

Big7Time, agree regarding issues that you cannot accurately value - that is why I choose the 'other things equal' line. Yes my model is crude, and yes I think your approach (and al101uk's) lead to similar outcomes, and most importantly, decision rules.

From previous discussions, al101uk work has led him to argue that we are undervalued, whereas my model showed share price broadly in line with the baseline. Now is the first time that share price is markedly lower than my model, so perhaps 'other things' are not equal - the main culprit IMO being that production figures are not yet trusted.

Meeting the 7k target, and avoiding production wobbles should help restore normality - that at least is my basis for optimism.

[lucyp00p] 08/11/2017 09:55

Answer to the q&a link re oil sales during testing on ONGC.com site suggests 3,200 as initial output. So 30% of that flows straight to our bottom line.

[big7ime] 08/11/2017 09:47

Ps I have left cpo-5 out of the equation for now, too many unknowns
But that may add significant value
There aren't many small oil cos I'd invest in but my hdg here is a large percentage of my pfolio and I justify it by the weighting of my calc of its undervalue

[big7ime] 08/11/2017 09:38

Thanks fadilz for explaining that, I appreciate it. It's a starting block calc and makes sense. My calcs are rather more complicated and whilst similar in basic present value I encompass a number of investment fundamentals so for e.g. Cash and roce/eps and scenarios to give a range and take an ave
Sentiment also plays its part but imo cannot be "valued" but sps always overshoots to the downside and upside which would explain current undervalue
Confidence in poo staying up is likely still low but that may gradually change and a re-balancing in share price take place next yr, also get RH out the equation
I'm optimistic for mid 40s

[fsawatcher] 08/11/2017 09:05

fadilz

your model not good coz you dont understand amer assets

you jus use production and oil price

but wot happen to model if ongc buy out amer on cpo5 ????

wot happen to model if oba make money from nuther supplier oil ???

wot happen if gt or ongc buy amer out 100% all assets ????

you ave to model more than jus oil

[fsawatcher] 08/11/2017 08:52

Sunday big event??? Cut the red tape?? Press button that say flow oil??

""The operator of the Mariposa discovery in the CPO-5 block has informed the Company that the equipment to initiate the Long Term Test (LTT) of the Mariposa-1 well is now on location and the function testing is 95% complete. The LTT will commence after the inspection visit by the National Hydrocarbons Agency (ANH) to approve the facilities, which is currently scheduled for 12 November 2017. The LTT is expected to commence shortly after approval has been received.""

[blackdown2] 08/11/2017 08:51

Re values, all very interesting. However, it is likely that the OBA will have a significant capital value in its own right, once its capacity substantially exceeds the company’s production throughput.

[lucyp00p] 08/11/2017 08:30

Call me and I'll happily transfer you mine for 30pps. 27 for cash if you think that's fair value.

[fadilz] 08/11/2017 08:26

Big7Time, my argument is simple, but has worked pretty well over the past 3 years.

I work out the % *change* in NPV vs a previous time, and simply say that if all other things are equal, then share price should change by the same amount as NPV. So if NPV is up 10% now vs then, then share price should be up 10%.

My baseline is Aug 2014, when I first became interested in AMER, and share price was 60p
Reserves(mb)__Barrels/day___$/bbl profit___#Years___NPV10____xBase___sp
32.8__________6769__________62_____________13_______1,088____1.00___60.0

reserves 32.8, pumped at 6769 barrels per day will last 13 years.

Annual profits = 365 * 6769 * 62, and if this is repeated for 13 years, you end up with NPV of 1088.

My calculations in previous posts simply repeat this calculation for currently known reserves, barrels per day and netback (profit) and then predicted share price is xBase * 60. (xBase = NPV now/1088)

Very simple and crude, but has worked over time. It also allows me to evaluate possible future scenarios using reserves, production rates and profits, to assess possible upsides. Quick easy and has worked to date. It has allowed me to argue for example that our fall from 60p in 2014 is down to the fall in profits per barrell (ie the oil price, mitigated by OBA cost savings).

I have just made some predictions, regarding current value - lets see how that plays out. :o)


Where al101uk and I differ is that he derives estimates of value by more detailed calculations from fundamentals (tax rates, etc), and attaches a probability to future outcomes, which he then takes back to a fair present value. Now, as well he is investigating short term TA effects like momentum and sentiment.

I simply say if x comes off, the value would be y. Also, any component of a model has errors attached, and very detailed calculations have more opportunity for error. As long as I can see a reasonable chance of x happening, I see reason to hold. I see 30p+ this year as good reason, and if 20k production materialises we will all be very happy.


My big assumption is the 'all other things remain equal' argument that whatever else apart from NPV that affects the share price remains constant. But as I say, this has worked until now. 20p was in line with 4k production, we should now be 50% higher.

[oilandgas1] 08/11/2017 00:39

The Irrational Investor: MLPs Trading On UNfundamentals

[oilandgas1] 07/11/2017 23:30

The share price has been dropping ( historically may -Aug) like other oil SPs in the energy sector for a variety of reasons:

1) sentiment in the energy sector dropped in may as hedge funds and other funds saw. Enter opportunities in other market sectors. All oil companies were revalued in that basis.
2) global oil inventories did not change much causing more pressure
3) POO dropped during that time and more money exited.
4) OPEC compliance dropped for Jun/ Jul and Aug.
5) amer had a number of problems locally.
6) amer promosed volumes and execution capability has historically been well.. terrible .. but has improved.
7) us shale production was overstated.

Things have changed for all those points now. Amer is also now finally delivering with CPO5 to add significant value .. 19p was the. Ottomh I called a few weeks ago (IMHO).

Onwards and upwards to 30p by dec17

[al101uk] 07/11/2017 23:29

Mittington,

Yep, last one was published 23rd March 2017.