Amerisur Resources Share Discussion Threads

[mortgage freeman] 03/12/2019 17:19

Good posts today

[al101uk] 03/12/2019 17:15

"...why Amerisur over a period of at least two years came up with fully funded drilling campaigns with little drilling done."

I don't know... but here's a theory consistent with my previous posts:

They underestimated the costs associated with keeping Plat producing and overestimated the likely free cash flow from ongoing production. Any free cash generated has been pumped back in to keeping Plat running and developing CPO 5.... so no cash for new drills.

For whatever reason they have always been financially conservative balance sheet-wise and I suspect raising debt, placing equity or running their cash reserves down would all have given the game away. As would not spending additional funds to keep Plat going. So instead they made promises, implemented hail Mary solutions at Plat and failed to deliver... over and over again.

The thought process would be "if we fix Plat, we're good!"

In my opinion Rex worked out the state of Plat ages ago (he wasn't the only one, people here, myself included, were also questioning what was going on). Michinoko worked it out a short time ago and tried to oust management... for me it took a baseball bat to the head.

I think you'll see minimum effort and money spent on Plat by GTE, they'll run it off and sell any residual value while pouring any cash that it produces in to developing CPO5 and the other assets they stole from us. Basically they'll do what our management should have done three years ago... but our management couldn't admit they might have made an error in judgement and instead ran the company in to the ground, put Michinoko in a position where they wanted to cash out and in the end got a bad deal for their investors.

[tyler durden1] 03/12/2019 16:38

Ha ha, yes you are probably right TGG

[thegreatgeraldo] 03/12/2019 16:27

tyler durden1
3 Dec '19 - 16:13 - 25367 of 25367
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You can understand ONGC not drilling, why would they when they already have a strategic alliance with GTE? More drilling there would in my opinion have been successful and I will forever query the apparent failed drill there,

...No need to "forever query" that well. Assuming the deal goes thru, just wait for an update from GPRK some time next year or the year after

[tyler durden1] 03/12/2019 16:13

But you still have to wonder why Amerisur over a period of at least two years came up with fully funded drilling campaigns with little drilling done. This also coincided with RH selling so to base a take out price and smashed share price that in no small way has been affected by missed targets seems strange indeed.

You can understand ONGC not drilling, why would they when they already have a strategic alliance with GTE? More drilling there would in my opinion have been successful and I will forever query the apparent failed drill there, as that is oft used in the oil world!

[kinwah] 03/12/2019 15:26

acv74, M&P had to rule themselves out at some stage otherwise the Takeover Panel would have imposed a Rule 2.6 deadline on them to put up or shut up. In the meantime M&P shareholders would have to comply with Rule 8.3 and make disclosures of any dealings in M&P shares if they hold more than 1% of the company. All in all if M&P weren't going to bid better to make the announcement of no intention to bid and save the ongoing expense of retaining advisers to the potential offer.

[thegreatgeraldo] 03/12/2019 15:23

Lucyp00p
3 Dec '19 - 14:46 - 25362 of 25363
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Geopark announced that after the takeover they plan to drill 100 wells on CP05 along with ONGC.
Correct me if I'm wrong

..I saw this in the takeover announcement,

....."GeoPark and ONGC, the national oil company of India and the operator of the CPO-5 block, have a long-term strategic alliance to acquire a portfolio of projects across Latin America. ONGC brings significant operating knowledge and expertise to the CPO-5 project. GeoPark also expects to contribute its successful experience of operating and drilling over 100 safe and cost-efficient wells and growing production from zero to over 75,000 bopd in the Llanos basin."

....if you've got a link for plans to drill 100 wells on CPO5, please feel free to share

[rollthedice] 03/12/2019 15:04

AMER can barely drill (less than) a handle a year what chance a 100?!

I'd be surprised if the 75% isn't reached by Geopark who have already told us their fallback position, a takeover offer.

[lucyp00p] 03/12/2019 14:46

Geopark announced that after the takeover they plan to drill 100 wells on CP05 along with ONGC.Correct me if I'm wrong, but isn't that our real estate???

[fadilz] 03/12/2019 14:20

I agree with al101uk.

A few of points to add:
- this is exploration. The N-Sands failed, if you recall, they were set to at least double Platanillo reserves but did not (and caused a major holder to sell out).
- Plat production has been unimpressive, and if you look at monthly production you may well think that that alone justifies the doldrums we faced 2015/6 -see below. I wish that www.controlhidrocarburos.gob.ec had been known to us sooner.
- OBA is worth the savings of oil flowing through it to whoever owns it, but not to a buyer. To a buyer is worth the cost and effort to build a new one - they could after all build their own.

My average is 25p, so I too lost money. Do I blame the board? I'm less inclined to than most here. This is aim exploration. Wing and prayer. Of course they had to present a rosy picture to survive. With luck they would make it big. There was risk, and anyone investing in this kind of outfit should understand that. Rather than bang on about Rex vendettas those here should perhaps have been more sceptical. I was not. Ourselves to blame, mostly.

[Edit, I spotted an error in the monthlies I posted, so removed them. No time to fix]

[lucyp00p] 03/12/2019 14:07

No way 75% vote for the deal. What happens next is anyone's guess.

[kinwah] 03/12/2019 13:58

Wow Al101uk that is some essay! The terms of the auction were cash only and ready to bid as you say which has limited the number of participants. If there are going to be competing offers they are likely to have a shares element and therefore are subject to market factors such as hedge fund selling and stockmarket volatility. Chances are that the current offer is the one that will succeed.

[kaos3] 03/12/2019 13:01

If amer is taken over - it does not need to be integrated. It can keep their BOD and their benefits for some time - only BODs performance could be different.

[al101uk] 03/12/2019 12:37

"CPO5 or bust" is not what I said.

Amerisur have potentially valuable assets that they have miss-managed for a decade or more. That potential has a capital cost and may result in an oil bonanza or may result in nothing.

The price someone will pay for that potential comes in three parts:

1) The capital commitment required to develop the asset.
2) Compensation for the sunk costs already paid by the current owner.
3) A premium due to a competitive process and what was revealed by '2'

For the bulk of our assets '2' doesn't apply, '1' doesn't come our way, so we're left with '3' which the market has decided should be close to £0.

The Occi deal was all capital commitment, if that capital commitment ended in a 50/50 split of both capital (risk) and potential gains (reward) Amerisur made nothing.

What's left is simple math.. P1 & P2 reserves plus the OBA.

Why is the premium close to £0... because there are limited market participants who already work together... ergo lack of competition. They probably also have an inkling that this isn't a sale process that is likely to end in the seller walking away.

Why are we selling instead of developing? Because a major shareholder has started to put pressure on management and may well have the firepower to give them the boot if a sale isn't completed.

Why would a major shareholder do that? Because management are a bunch of low life scumbags who've been cashing in at shareholders expense while delivering the square root of f'ck all for too many years.

Why cash only... because a major shareholder wants to cash out and an approach was made that met their criteria.

Why is Ironveld selling out at the same time... same reason, same shareholder.

Surely management aren't serving the best interests of all shareholders then? Absolutely, they are serving their own interests by complying with the demands of a single large shareholder. Nothing new there.

Is that legal? You're getting a vote, if you don't like the deal vote against... but understand there are huge risks.

1) There may be no other offer.
2) Management may have another trick up their sleeve to keep them in their job or a second attempt at kicking them to the curb may fail.
3) The next management team may be no better or may be constrained by issues not revealed by the current lot.
4) Development time to realize full value is likely still going to be years.
5) Full value may be less than you expect (or more).

And in the short term I think it's safe to assume upheaval and share price decline.

Remember Michinoko already attempted to give management the boot and failed.

[lucyp00p] 03/12/2019 11:41

I'm inclined to agree with you. No way we are CP05 or bust.

[al101uk] 03/12/2019 10:39

I forgive you ;-)

[tyler durden1] 03/12/2019 10:37

Al101. In error. No intention to deceive. Apologies. Will edit the post.

Although it doesn't make a difference to the points made?

and the only thing of REAL value, right now, is CPO5.
and the only thing of value, right now, is CPO5.

Still wrong, as OBA is of significant value
Plat is still of significant value, still producing significant amounts of oil
Occi joint deal is of significant value otherwise Occi would not have agreed to fund the lease.
Other leases have known oil on them?

Geopark's valuation did not appear to be based on what they would have to spend.

Amerisur's valuation in May 2019 showed that ADDED value to the tune of $360M on top of the companies value as a producing cashflow positive company with cash in hand and no debt.

Options have been issued based on the value added by BoD?

Look at the last five presentations from Amerisur and the valuations there are nothing like the derisory offer from Geopark.

If the offer was fairly valuing then why did the Board offer advice in RNS for shareholders to do nothing with their shares after the prospective bid from M&P 'materially undervaluing' Amerisur?

Geopark's bid was for just £242M. This is LESS than even the recent value added to Amerisur as shown in the May 2019 AGM presentation? Shows value ADDED at $367.5M, let alone the producing assets of CPO5 where only Mariposa shows in the value creation, Plat, and the other acreage, and the cash in hand and the production from Plat and the OBA and where some leases already have shown production with that being a good indicator of larger reserves available on them. Mecaya has only .39m reserves because little drilling has taken place.

All the other assets Amerisur have they've been reluctant to drill.

Amerisur Board will find little wriggle room from scrutiny from their own presentations.

Just look at some of the comments from Geopark? You can see why ONGC never bid for Amerisur...a strategic partner of Geopark.

“Amerisur̵7;s asset base in Putumayo will provide GeoPark with access to an underexplored high potential basin, as part of our larger Marañon-Oriente-Putumayo strategy in the region and with an operating export pipeline.

“Additionally, with the incorporation of the CPO-5 block, operated by our strategic partner ONGC, and adjacent to our prized Llanos 34 block and nearby recently awarded exploratory blocks, GeoPark would now have a contiguous land position of more than one million gross acres in one of the most productive areas of the Llanos basin in Colombia, containing multiple development and exploratory opportunities.”;

[kaos3] 03/12/2019 09:59

OBA is a proven golden ass

[rollthedice] 03/12/2019 09:44

House brokers always overegg their clients potential. Geopark will have to spend a lot of money to realise AMER's potential. Market doesn't think Geopark has nailed a bargain does it?... their share price has fallen!

I'm not suggesting that if all the ducks lined up and one or more of AMER's licences delivered a major discovery that share price couldn't go higher, it obviously could, but then their Paraguay licences were supposed to do that weren't they?!

[tyler durden1] 03/12/2019 09:34

al101 roll.

Thats easy to refute when Geopark value Amerisur around 300% more, when Amerisur themselves in May 2019 valued just the "value added" as over $367.5m on top of the existing value within a cash positive no debt oil producing company owning a potentially very lucrative pipeline.

Amerisur's own brokers valued Amerisur at 37p per share.

"and the only thing of REAL value, right now, is CPO5."...that's rubbish. It might be very valuable but producing thousands of barrels from Plat is not without significant value. owning a pipeline that saves a fortune in transport costs is not without significant value and owning leases with massive acreages some of which have already produced oil, let alone a joint agreement with Occi that derisks a significant acreage are not without significant value. Let alone the cash!

[rollthedice] 03/12/2019 09:25

"Pluralitas non est ponenda sine neccesitate." (Occam's Razor)

---

The simplest explanation is usually the best explanation. There is no grand conspiracy IMHO just an incompetent BoD.

[al101uk] 03/12/2019 09:12

There are two possibilities here, the first is that it's all a big stitch up, that M&P GeoPark and the rest of the bidders are all in on it, that Giles wanted to sell the company on the cheap for some nefarious reason.

The other is that the company has been valued fairly and the lies (or perception thereof) were committed earlier. Maybe they lied about the prospects for the OBA, maybe they lied about the production profile of Platanillo... it certainly appears that way to me. Maybe excuse after excuse after excuse wasn't failure of operations, but because they were lying about the prospects of the company. Maybe the assets Amerisur have built up are just meh... and the only thing of real value, right now, is CPO5.

And maybe, now they've been found out by a sale process that was forced upon them by Michinoko.

I'm not saying that shareholders shouldn't be furious, they should! But I suspect that they should be furious about the last 10 years, not the last couple of months.

[eddie_yates] 03/12/2019 08:29

Astor hopefully they will get there comeuppance at some point for their despicable behavior!!