Amerisur Resources Share Discussion Threads

[lucyp00p] 16/5/2017 12:35

You forgot to factor in the $24,000,000 tax break

[fadilz] 16/5/2017 12:34

Hi al101uk, you build your model from first principles, and this is a classical approach. My model is really very simple, and much less ambitious, but I observe it it to be a good predictor of share price nevertheless, and so far. It just asks how the three parameters have changed vs a baseline, and I assume the baseline includes the parameters you mention, which i can ignore. Seems to work, to my astonishment.

If by undervalued you mean that future share price will be higher, then we agree. If you mean that the current price should be higher than value gained from *current* parameters, then I say *by observation* no: share price reflects this model to a remarkable degree, and since Aug 2015.

If indeed this Rex of whom I have no knowledge exerts such influence over the share price, perhaps he is using a similar model. I'm slightly tongue in cheek here. At any rate I don't worry or bleat about poor management, or evil manipulators - as far as I observe I can model the share price free of such concerns - and this makes me feel I have a simpler explanation, and to see value where others apparently do not. Edit: and for the record I think management are really good.

Perhaps on the back of that opinion I should keep all this to myself, but that if you like is my input in return for that of others. Or maybe I get some perverse pleasure from debate.

At any rate, the more interesting discussion to me is likely future reserves, production and profit per barrel for the various developments: they appear to determine the rewards for patience.

[studug] 16/5/2017 11:04

Lucky ? Se7ens eh? Get on there little oily, giddy up

[al101uk] 16/5/2017 10:45

Fadilz,

OK, so we differ in a couple of ways:

1) I assume a higher oil price than you
2) I deduct an amount to approximate tax/royalties/admin
3) I add in cash and the pipeline as assets that have value at least equivalent to what they are stated at on the balance sheet.

My rationale being I don't want to pay for value that is then immediately handed to someone else, on the other hand I don't want to dismiss the assets as worthless beyond 5k bopd over 14 years.

Admin is easy... circa £11 million a year and from memory I was using 35% for tax and royalties, that number came from an older model where I actually looked at the tax regime in Colombia... it's ballpark because money is skimmed of revenue as well as profit, there are savings on capex and the regime changes beyond 5k bopd.

If you don't add cash as an asset directly to the valuation you have to estimate a return on capital and add that to the valuation... which you may have done in your CPO-5/Plat Extension etc... but if you do that I don't really understand where you took issue with my "it's undervalued" comment.

[fadilz] 16/5/2017 10:32

al101uk, xBase = times base - ie factor applied to 60p to get current. I have not adjusted the $/£ exchange rate, so this may be a factor.


FA: great if we can all input to getting values for the first 3 columns reserves, b/pd, profit

F

[bigwavedave] 16/5/2017 10:23

First delivery could be in 2-3 days:

[foiledagain] 16/5/2017 10:18

No disagreement with your calculations, but its simply my opinion that Amerisur will be taken over before we can hit the 20,000bopd as it would be logical for a predator to do that. ONGC might be forced into bidding earlier if CPO-5 is good.

Fadilz. You may be overestimating CPO-5 costs as it has what I've seen described as the cheapest infrastructure being the area that has seen large investment from some major Colombian fields, but I agree its safer to over estimate costs.

[al101uk] 16/5/2017 10:08

FA,

Not talking about how much AMER is worth to a predator right now, just establishing a baseline.

I was coming up with very similar numbers to Fadilz for quite a while, but we've diverged, anyone who's looked at my previous valuations will already see the differences between my numbers and my version of his numbers ;-)

[foiledagain] 16/5/2017 10:02

This will be taken over at multiples of the 22.24p and in my opinion within the year.

With a projected 20,000bopd any predator would be foolish to wait until that was achieved even with Amerisur's slippery timescales.

ONGC must be a prime candidate and even moreso if CPO-5 is better than expected

[al101uk] 16/5/2017 09:09

Fadilz,

OK, so here's my version of your Plat valuation:

Assumptions:
Reserves: 25 million
Production: 5000bopd
Oil Price: $45
Costs: $15
Exchange rate: 0.71
Shares In Issue: As per advfn
Discount Rate: 10%

Share Price: 22.24p

Does that look accurate?

Also what is xBase?


Thanks

[broncowarrior] 16/5/2017 08:22

Come on, 27 plus and it is on its way.

[bigwavedave] 15/5/2017 21:27

9barracuda - OK, thanks. Just worried I was missing something!

[fadilz] 15/5/2017 21:20

Al101uk, here is the basis of my postings after plat 22 RNS on 20th April:

Reserves(mb)__Barrels/day___$/bbl profit___#Years___NPV10____xBase___sp
32.8__________6769__________62_____________13_______1,088____1.00___60.0
25.0__________5000__________30_____________14_______403____0.37___22.2
32.8__________5600__________30_____________16_______480____0.44___26.5

Row 1: My baseline (Aug 2015) - 60p
Row2: Pre Plat 22 - 22.2p
Row3: adding 7.8m reserves, as per 20th April RNS, and 600k per day production - 26.5p


I am now trying to model a more complex scenario, where it is necessary to break out each separate field. This is full of assumptions so is *speculative* Interested to hear what you think about cost per barrel of the various fields (profit per barrel calculated as ($45 per barrel oil – prod cost) ).

First 3 rows relate to talk from AGM, especially 40m in plat north -> share price of 39p, if confirmed - This is pretty speculative as more appraisal needed. The production figure are taken from slide 13 of the AGM presentation.

The last 3 rows relate to end 2018, again using speculative prod costs, and reserves, and production figures from slide 13. -> 72.5p end of 2018.

Area________Reserves(mb)__Barrels/day___Prod Cost______#Years___NPV10__xBase__sp
CPO-5_______26.0__________1500__________30_____________47_______81_____0.07___4.5
Plat________25.0__________5000__________15_____________14_______403____0.37___22.2
Plat North__40.0__________2500__________20_____________44_______225____0.21___12.4

Put-12______100.0_________2500__________20_____________110______228____0.21___12.6
Put-9_______50.0__________2500__________25_____________55_______182____0.17___10.0
Coati 2_____9.0___________500___________30_____________49_______27_____0.02___1.5
Plat N Sand_20.0__________2000__________20_____________27_______169____0.15___9.3

Edit: I would add that
- I am rolling back a little from the idea of an optimum production period for NPV. May post on this later, but I still think a target of 10-20 years production is realistic.
- barrels per day above add to a little more than slide 13 - so take with a pinch of salt. This is work in progress, and getting good numbers for the first 3 columns is the aim

[big7ime] 15/5/2017 16:13

Somnus I think it could have been a buy as the price went up directly afterwards. the one before it was A buy at 26.5 then the 250k which caused the share price to rise .25p afterwards for the next trade to be a sell at 26.5
But don't think we can be certain either way

[9barracuda] 15/5/2017 15:55

Dave 1450.... haha I meant cpo5, but there's also plat 22, the pumping station, and maybe others?? Let alone all those drills 😀

[somnus101] 15/5/2017 15:34

By its timing late 250K was a sell. King Canute (if it's him) still very active with that and 50Ks, but the tide will get him in the end.

[al101uk] 15/5/2017 15:11

Anyone wondering if RH was selling in order to punish the BOD in regards to their options is mistaken.

The last options lapsed in Feb 2017 as a Base price of 53.9p and others at 37.22p
The next option lapse 7th Feb 2018 at a base price of 37.22p.

Beyond that we're out to 2019 with a base price of 27.5p, to the tune of 9.3 million shares.

7 million options lapsed last year :-)

[al101uk] 15/5/2017 14:19

fadilz,

I'd be really interested if you could post your assumptions so I can take a look at the numbers your using. I expect that your using a simple netback number and then discounting using a 10% discount rate, what annual production numbers are you using?

I think you mentioned around 15 years being the ideal timescale for production to be scaled over?

I assume your using 24.7 million in reserves?

[al101uk] 15/5/2017 14:16

ML,

Just been looking at the chart you posted here a few days ago. Hadn't really looked properly before, but the numbers are pretty meaningless, it's talking about NAV as opposed to NPV. Basically if we could extract all of out oil today and transport it and sell it then the numbers are accurate.

It's a balance sheet exercise, not a valuation exercise and as a result the numbers look very very full.

38p core NAV does not equate to 38p target share price.

It also means there is nothing to back out, the only vaguely interesting number in there if the $13.40 value per barrel associated to the plat reserves.

If I were cynical...

[big7ime] 15/5/2017 11:58

Oil Price up on news
Investing.com - Oil prices rallied in European trading on Monday, rising to the highest level in around two weeks after Saudi Arabia and Russia agreed to extend oil output cuts for a further nine months until March 2018 in a bid to erode a global crude glut.
In a joint statement that followed an earlier meeting, Saudi energy minister Khalid al-Falih and his Russian counterpart Alexander Novak said they had agreed to prolong an existing deal by another nine months until March 2018.
The ministers pledged "to do whatever it takes" to reduce global inventories to their five-year average and expressed optimism they will secure support from producers beyond those in the current deal, the statement said.

[itsriskythat] 15/5/2017 11:51

I am wondering if Rex Harbour was potentially an insider on the reason behind the Platanillo shut-in wells and so reluctantly started to sell down its holding. With Platanillo-8 now successfully restored to an initial post-treatment production rate of 350bopd, if this proves successful on the other shut-in wells, Rex Harbour could soon regret that decision. Ample reason to suspect that the selling has stopped.

[trotting12] 15/5/2017 11:43

Could add much much more ,, what will it be worth to amer if cop comes in at 10k s day !!! Could happen

[gtfcniles] 15/5/2017 10:26

Wonder if we will hit 27p today, can't wait for the drill news could add 5-10p.

[lucyp00p] 15/5/2017 09:14

Yay. Bitcoins