Amerisur Resources Share Discussion Threads

[tyler durden1] 15/2/2019 10:04

One of the problems is still Plat. Its very easy for JW to downgrade Plat now to being a mature field almost seems to write it off. But it was not that long ago we were promised great things from it, along with the transformational OBA that would carry all that extra oil produced. Not that long ago we were assured there were no problems there and even in his alleged interview his comments give impression the company has booked 30million barrels of reserves at CPO-5.

During the last few years we had all sorts of reasons given for Plat underperformance, including Popes visit, shutting down wells temporarily because of low price of oil, Colombia taking its oil and on one occasion refuted allegations from a poster on this bb that there were problems there about 2 years ago, and still no comment about the latest Pintadillo drill there with the last RNS giving us cause to believe it would produce commercially but no news since and no news and no further drills suggests its not good news but no one tells the shareholders till last. The only thing we know is they've drastically cut capex there, and have now started to talk about it being a mature field, which seems to be different to the commentary just a short while ago.

Architects of poor sentiment which has often been mentioned by multiple posters with regards to communication to lowly shareholders. Have to wonder whether RH caught wind of problems and decided enough was enough as selling did seem to coincide with poster alleging problems with Plat.? I don't know and don't pretend too.

[charlieeee] 15/2/2019 09:52

Good decisions are being made, resulting in a more coherent drilling program: switching the current rig from Sol to staying put on the Indico pad to drill Calao is evidence of tightening timescales.

Some of JW's recent commentary has been quite revealing re what he is really thinking. The key was the information that 3 wells can start a self funding capex program. So, Mariposa, Indico and Calao (assuming success) can fund Pavo Real and then in short order, the two further Indico wells. At that point, even without approval of a second rig from HQ, the local operation can fund two rigs from its own internally generated funds. From there on in, growth is exponential. Obviously, funding from HQ would speed this up, but the local operation can get there anyway.

It is extraordinary to see ONGC behaving like a cash strapped junior, but perhaps JW went to India to make some financial deal that would secure the earlier arrival of a second rig.

Looking at ONGC's overall activity in Colombia, it has been a money pit so far and CPO-5 seems to be the one really bright spot on the horizon for them.

Interesting comment by OXY on their acquisition of 4 blocks in the Putumayo

"These new international opportunities will add significant high-return, low-decline, development inventory to our portfolio....….In Colombia in partnership with Ecopetrol, we have signed an agreement to develop Blocks 39 and 52. These blocks are adjacent to our giant Cano Limon field and therefore we had successful discoveries this year.In addition, we farmed into four blocks in highly prospective Putumayo Basin, where we have regional knowledge of the reservoirs. With these blocks, our net acreage in Colombia has risen to approximately 1 million acres of the low cost of entry"

[retailronnie] 15/2/2019 09:49

Agree with valuation being crazy.

Hopefully once brexit is sorted, the big money will flow back into the market.

[bigwavedave] 15/2/2019 09:48

I could get 5.88 AMER shares for that.

[meneither2] 15/2/2019 09:16

I think outside investors want to see more evidence of the find actually being delivered in a way that will benefit shareholders. We all know that past promises and excitement has not always delivered hard cash to lth. Patience is still required..... I do believe the market will pay more attention if they for once deliver on the drilling plans and especially if they draft a second rig in.

[bigwavedave] 15/2/2019 09:13

Lucy - I concur (although I have no Curly Wurlys).

[al101uk] 15/2/2019 09:12

Post your 38p valuation and lets dissect it.

I think it's pretty easy to get a price well below 38p.... but then is it worth the hassle on here for a thought experiment :-/

[lucyp00p] 15/2/2019 09:01

Still don't get it. Sitting on a monster oil find, with massive upside and no perceptible downside, and Amerisur completely blanked by investors. Ok, no problem short term, shares are cheap, but I and probably you are clearly missing something. Sure GC is a surly SOB, and AIM may not be the best place to be for governance, but no matter how I crunch the numbers, the lowest true share price I get is 38p, and that assumes nothing but dusters to follow. I have more curly wurlys for enlightened responses please.

[jp2011] 14/2/2019 08:48

Attention has gone from AMER to MATD

[kaos3] 14/2/2019 08:23

RR - good post. thank you

[mad foetus] 14/2/2019 08:17

Whatever else, for an oil stock AMERs share price is extraordinarily insensitive to the price of oil

[retailronnie] 14/2/2019 07:52

Charlie xxnjr,

Amer agree - this is from Amer 30th June 2016:
Amerisur and our partner are currently planning to drill two exploration wells on structures defined by 3D seismic
in the CPO-5 block. The first, Mariposa-1, is targeting a lower Sands (Une) objective which lies up dip of the
Yatay-1 well and the Candelillas field development in the adjoining Guatiquia block. Yatay-1 produced over 9,000
BOPD of light crude on test. The second, Sol-1 will target a fault bound structure and has Mirador, Guadalupe
and Une sands objectives. It is expected to drill these wells back to back in early 2017.

[chuckle at the time lines]

hxxp://www.amerisurresources.com/images/rns-pdfs/Amerisur-Interim-Results-30th-June-2016.pdf

This presentation is also interesting, particularly slides 31 and 32.

hxxps://www.sec.gov/Archives/edgar/data/1156041/000114036112016884/ex99_1.htm

The green and blue lines on slide 31 seem to co-incide with Mariposa, indico, sol.

And slide 32 shows the basin in area (cpo-5 is on the right)

[laptop15] 14/2/2019 06:58

https://twitter.com/ChartMill/status/1095887122026979329?s=19

[thegreatgeraldo] 13/2/2019 23:16

Guess most folk already know, but I've only just noticed what OBA stands for...... Oleoducto Binacional Amerisur. Assume it translates as something snappy & original, like Amerisur bi-national oil pipeline

[xxnjr] 13/2/2019 23:04

Thanks for posting the Frontera link charlieeee. Makes sense to drill out the LS3 fairway first given the success rate, superior economics and potential for rapid production gains and reserves growth. Seems to be plenty of simple compressional LS3 structures to go after in the medium term.

[charlieeee] 13/2/2019 22:13

In some ways the Llanos 34 block is a red herring re our current discovery: that extension into the mid north of our block, of the heavy oil, seems to be separate.

The problem for Frontera re Guatiquia is that, much as they might like to have pursued the trend south, unfortunately their block ends and CPO-5 has the rights. For that reason, the production has come from a few wells drilled almost a decade ago and they plan to extend production for the next 3 years.They obviously are putting effort into it, to have the light oil to blend: this area described in the presentation as:

Guatiquía: Cornerstone of Light Oil Production
Stable Production at 15,000 Bbl/d for Three Years

Quite a lot of information in the 2019 Frontera presentation: slide 27 onwards )

hxxp://www.fronteraenergy.ca/content/uploads/2019/02/FEC-190205-2017-Full-Presentation.pdf

In due course, it is to be hoped that the same problem faces Geopark, that the heavy oil continues across the block boundary into the north of CPO-5 and we can benefit from all their hard work.

There is also the 3rd area in the south of the CPO-5 block.

[treasure] 13/2/2019 21:13

And also that months worth of oil in storage that they never sold that to be sold in q1, hopefully add
that to the pile

[retailronnie] 13/2/2019 20:34

LucyP00p, in the recent proactive interview he mentions $40m which is the nearest figure we have I think

"There is cash of US$40mln and a debt facility of US$30mln to carry out its programme of work at Llanos, with Occidental paying for the majority of the activity at Putumayo."

hxxps://www.proactiveinvestors.co.uk/companies/news/214473/amerisur-in-right-place-at-right-time-in-colombia-214473.html

[xxnjr] 13/2/2019 17:29

Llanos 34 is the largest oil discovery in Columbia in the last 30 years, so what I ask does that make CP0-5 then?.....

LL34 is producing from the Guadalupe trend. Haven't done the research but seems to be a heavier oil, requiring lots of wells, with a large inventory of future drilling locations going forwards, resulting in growing reserves and production. Hopefully this trend doesn't stop at the block boundary.....

Mariposa down to Sol is a different geological play with very high initial flow rates from high permeability LS3 sands, with 37 to 41 API oil. Initial discoveries were made to the north in the Guatiquia Block; e.g.

Candelilla-1 commenced drilling on November 9, 2009 and was drilled to a total vertical depth of 11,681 feet on December 16, Well logs indicated 97 feet of potential net oil pay in the Lower Sand 3 formation and 13 feet of potential net oil pay in the Upper Mirador. The well commenced production at over 11,500 bopd of 44 degree API oil with less then 1% water cut.Candelilla-2 well commenced drilling on December 26, 2009 and was drilled to a total vertical depth of 11,740 feet on January 31, Well logs indicate 88 feet of potential net oil pay in the Lower Sand 3 formation and 51 feet of potential net oil pay from three separate sands in the Guadalupe formation. The well commenced production at over 15,800 bopd of 43 degree API with less then a 1% water cut.Candelilla-3 well commenced drilling on February 18, 2010 and was drilled to a total measured depth of 12,162 feet in under 30 days. Well logs indicate 50 feet of potential net oil pay in the Lower Sand 3 and 46 feet of potential oil pay in two separate intervals in the Guadalupe formation. The well commenced production at over 15,600 bopd of 43 degree API with less then a 1% water cut.Yatay-1 well commenced drilling on November 19, 2010 and was put on production on January 4, Well logs indicate 114 feet of potential oil pay in the Lower 3 sand. The well commenced production at over 10,440 bopd of 43 degree API with less then a 1% water cut under natural flow. The well produced over 1.1 million barrels of oil in its first 4 months of production

There doesn't seem to be a huge amount of production coming out of Guatiquia Block today IIRC. DYOR

[sogoesit] 13/2/2019 17:17

Price is price and dependent on quality.
Crude cutting is a service and may be in the transportation contract/tariff.
If the cut blend gets a higher price a share of that may appear in the revenue to AMER for cutting upon export sales.

[kaos3] 13/2/2019 17:01

can one explain it to me why we must sell at discount to the brent and not at a premium? as our oil is technically needed to be mixed with heavy oil produced locally in order to be technically viable (or for cheaper processing) using pipelines, refineries....

in grains top grains (improvers - I do not know the word) have huge premiums

I would think we will get a premium due to local situation

I am slow again lol

[moneylender] 13/2/2019 16:49

Some research from LSE, BigBiteNow has my thanks.

Amerisur have quite rightly employed the neighbouring block Llanos 34, as a basis for educating investors on the potential that sits within the CP0-5 block. In their Feb presentation they also talk about its proximity to Corcel and Candelilla fields in the Guatiquia block.

With this in mind I decided to take a closer look at Llanos 34 oil fields and in particular the fields discovered in the first 2-3 years.

Having reviewed all the oil discoveries from May 2012 (Max field) through to the end of 2014, I have found the following ;

1. By Dec 2013 Llanos 34 was producing 10,945 bopd from 11 wells at an average of 995 bopd.

2. The largest single well at that time was Tigana-1 in Dec 2013, which came in at 1,469 bopd, later increased upto circa 2,000 bopd. All other wells ranged between 600-700 and 1,200 bopd.

3. By the end of 2014 Llanos 34 had 72m gross 2P reserves with the vast majority of production (19,300 bopd) coming from the "world class" Tigana (7 wells) and Tua fields (7 wells). That's 1,380 bopd per well.

4. Tigana field has the lowest water cut at levels close to Indico-1. The others came in at between 6-10%.

As it stands today Llanos 34 is producing 70,000 bopd per day from between 80-90 active wells and has over 200mmbbl of reserves as of Q1 2019. In Q4 2018 Geopark and its partner successfully drilled the Tigui Sur 1 well, which along with Tigur 1 produces around 1,900 bopd with 6% water cut.

In addition "seven new wells were tested and put on production, including Tigana 5, Tigana Norte 10, Tigana Norte
11, Tigana Norte 12, Tua 11, Jacana 14 and Jacana 19, which are currently producing approximately
6,800 bopd gross.

CP0-5 has drilled just 2 wells thus far but they average 4,150 bopd and Mariposa-1 has been on LTT for 21 months and is still producing at 3,200 bopd. That's some 2,650 bopd larger than the biggest single discovery on llanos 34 in its first 2.5 years of activity.

From what I can see Llanos 34 is so productive because of the sheer number of wells that can be drilledacross a large oil field and the success rate of those wells (+90%). Buoyed of course by the low OPEX ($4 per barrel) and the ease with which the oil can be exported.

NOTE - As of their August 2018 presentation Geopark were still reporting +95% success at Llanos 34.

Llanos 34 is 82,200 acres in size. CP0-5 is 492,350 acres. So almost 5 times as big, and CP0-5 is already demonstrating a field over half the length of Llanos 34 entire fields. There are other factors to consider and the oil game isn't always straight forward, but as starts go it is quite something compared to Llanos 34.

Llanos 34 is the largest oil discovery in Columbia in the last 30 years, so what I ask does that make CP0-5 then?

[11_percent] 13/2/2019 16:29

So.….basiclay……...they don't tell us much cash is in the bank...……;..and we cant tell how much that represents in the share price

If that what they tell us....fine.