Amerisur Resources Share Discussion Threads

[al101uk] 04/12/2019 12:47

I'm not as negative as some on a "No" vote happening, in my estimation the following would result:

1) The share price would tank back to circa 12p
2) Cannacord and Michinoko would immediately force the boards resignation
3) New management would be installed.
4) Hopefully with better management we'd get a slow recovery and eventually the risk that we all paid to take would pay off. Certainly in the aftermath of new appointments I'd expect a bounce.

As someone in favour of the deal if you're sure of that scenario, you'd play it by selling now and buying back in after the collapse.

If you think there is a chance of that scenario playing out, you would sell a fraction (depending on your certainty) and buy that fraction back should the vote result in a "No".

It will cost (deal price - sell price * No of shares) to get the level of insurance you feel comfortable with.

The markets estimation that the deal will be done is around 94.5% chance. I think the chance is lower than that, so insurance seems the sensible play.

[al101uk] 04/12/2019 12:24

The document is telling in a few ways:

"Consequently, on 9 October 2019, FSP participants were issued with revised bidding instructions reflecting a strong preference to receive cash proposals for the Company, and requesting that the proposals submitted included, inter alia, confirmation that potential bidders’ proposals were not subject to any further due diligence or approvals, including board and/or shareholder approval."

Shareholders asked for the disposal to be "in full" and "cash only". I suspect a Michinoko led demand with backing from Cannacord. No further "due diligence or approvals" would really narrow the potential market!

"Whilst the Amerisur Directors believe in the future growth potential of Amerisur over the medium to long term, having considered the risks, particularly with regards to the operational challenges associated with delivering production growth from Amerisur’s discoveries, the inherent risks in exploration activities, and timescales associated with the realisation of value from Amerisur’s asset base, it considers that GeoPark Colombia’s proposal of 19.21 pence per share substantially recognises Amerisur’s growth potential, whilst providing certainty, in cash, to Amerisur Shareholders."

As close as you'll get to an admittance of guilt? "Operational challenges".

"It is intended that the Amerisur Directors will resign as directors of Amerisur on completion of the Transaction"

Only resigning as directors, no mention of them leaving the organisation... ugh!

"These options are already exercisable. The options expire on 23 December 2019, the day after the tenth anniversary of their grant, which is before the Court Hearing to sanction the Scheme. It is therefore proposed that they will be exercised on 20 December 2019, prior to their expiry.
It is expected that all options granted under the LTIP which have not already been exercised on the Court Sanction Date will be automatically exercised following the Court sanction of the Scheme."

Just disgusting!

"It is important that, for the Court Meeting, as many votes as possible are cast so that the Court may be satisfied that there is a fair representation of opinion of the Scheme Shareholders. You are therefore urged to complete, sign and return your Form of Proxy or make an electronic appointment of a proxy or submit a proxy vote via CREST as soon as possible. You should note that if there is insufficient Scheme Shareholder support for the Scheme at the Court Meeting, the Scheme will not become Effective."

So failing to submit a vote doesn't go down as a "Yes". The court needs a representative number of votes and the threshold must be crossed to get this take over done.

[charlieeee] 04/12/2019 12:11

Tyler

I can assure you that I have nothing whatsoever to do with the company.

I am known to other posters here, such as Lucy and BWD, who are on opposite sides of the fence in this final analysis.

All are entitled to their view and I have expressed mine, including the journey to the sad realisation that the dream is over.

The nightmare will be if the "No" vote succeeds and instead of going for control at 50%, Geopark walk away and we get the clown show for the next decade.

A lot of "ifs" in that, but do just consider that as a possibility.

One of my issues, already expressed, is that the "NO" camp have not coalesced round an attractive alternative.

On a practical point, my expectation is that shares from disaffected holders are being bought up by those who will vote "yes": there are companies who specifically make a small turn on these events and there are other iis, who will probably fall into line with Michinoko.

[shouldhavesold] 04/12/2019 12:07

I expect this to go through, it’s an unloved sector, unloved co. with unloved management. The results were always poor and below expectations of those here

[charlieeee] 04/12/2019 11:53

Tyler

I said disclaimer on the presentations.

It is wild exaggeration to start grouping what has happened here, with the like of Enron and Madoff.

You need to think more about the likes of Pete Landau (of RRRL etc fame)

He got taken down (and lost everything) but it was not for the overall optimism/deception, but specific offences such as borrowing from one company to prop another one up: he did it from desperation, but it was still a hanging offence.

I doubt if you will find anything of that ilk on AMER.

The final irony is that we were all hoping that they would be able to sell a pup on into a knowledgeable Colombian oil market (a bit the way Clarke did with former businesses).

As BWD says the dream is over.

(Thanks for the coffee, last time we met, BWD: does not look like we will all be meeting up again and so I am in your debt!)

[spudders] 04/12/2019 11:44

Still unable to vote via Barclays even though they sent email 2 days ago regarding Corporate Action, anyone else use Barclays.

[tyler durden1] 04/12/2019 11:42

bigwave. But what doesn't make sense is being major holders in Amerisur themselves lack of drilling after RH selling which they seemed reluctant to report has over two years crashed the share price. Now some of that is beyond their control....not the drilling though?

Whether correct or not it really gives the impression that the share price was driven down prior to this steal.

I also believe its premature to think a 75% vote is a given, and that perception is no doubt what the BoD want shareholders to believe, and likely some posts on this board are directed to that end.

A lot of buyers have been picking up strategic interests in Amerisur and I just do not believe they are buying to gain less than .5p per share

Companies do have bb posters so I would be very wary of posters encouraging others to give up for peanuts.

[tyler durden1] 04/12/2019 11:38

Charlie. Enron had a disclaimer...didn't help them much.
Madoff's scheme had a disclaimer....he's still incarcerated.
Tyco Internation had a disclaimer....They got 25 years.

[bigwavedave] 04/12/2019 11:35

al101uk - You've hit the nail on the head, and not for the first time.
I too was shocked by their recommendation to accept 19.2p but, unfortunately, no-one wants to pay any more. I've got used to it.
Too many years of over-promising - and they've been found out. Clarke, Wardle and Harrison could have built a Rolls Royce of a company but they were over-paid and got lazy. Now they've had to settle for a rubbish trade-in. Their loss, and mine.
But that's it. Reality. The dream is over.

[tyler durden1] 04/12/2019 11:34

Its also not a given that the vote will go YES.

There seems to be a lot of purchasers out there now with strategic holdings and I doubt they are buying to make 0.5p per share.

Some of the institutions that took part in placings can't be too happy either so although the BOD might appear to have sold out and where I can only believe someone spiked their drinks with hallucinatory drugs to get irrevocable undertakings, which seem to have no logic to them at all in benefitting shareholders getting the best deal and actively discourage other bidders having the thought that nigh on 25% of the shares are already pledged.

[charlieeee] 04/12/2019 11:34

Tyler

There is complete difference between castigating management and voting "No" thereby increasing their tenure in posts carrying inflated salaries.

What we had was an extremely boastful JW at the AGM pontificating about that piece of paper in his pocket: that was the mark of the man and his "value added" will be more of the same.

What we now have is reality and each day 19.21p looks closer: the M & P RNS was just another nail in the coffin.

Exaggeration on AIM seems to be the name of the game and I cannot see a solid case against this team: always remember that presentations come with a disclaimer, so you won't hang anyone on that!

The best anyone can achieve is a smear campaign, to sling enough muck that the smell sticks. Good luck with that.

[rollthedice] 04/12/2019 11:33

Does it matter tyler? We'll still have the same BoD playing their own games if we reject this deal. If a broom had been taken to the BoD by II pressure I'd be inclined to consider a 'No' vote but it hasn't and there's no sign that it will.

[tyler durden1] 04/12/2019 11:30

roll. Or is the share price the price some worked hard to achieve prior to a bid. The drilling campaigns or lack of them suggest?

The lack of drilling on CPO-5, where up to 6 wells were due to be drilled and where Geopark comment on their strategic partnership with ONGC demonstrating they will be drilling a load more, but then you would not have to work hard to drill more than Amerisur have done, and why when that would obviously adversely affect the sp?

You can understand ONGC as they want Amerisur out at the cheapest price, in common with Geopark their strategic partner, and Occi no doubt would prefer to work with ONGC and Geopark, but wouldn't be surprised if they have a party with Occi getting all of the current area they JV with Amerisur.

Materially undervalued or deliberately undervalued is down to opinion.

[rollthedice] 04/12/2019 11:15

Price before M&P interest known ~ a fraction over 12p. That is the reality that the BoD had delivered. AMER's 5yr share chart is like a ski jump slope, mostly downhill with an upturn at the end because M&P showed interest and Geopark tabled a formal bid.

It's just as well terms were 'imposed' on us because the alternative was more of the same but with Platanillo perhaps having just a few years left of decent production. $50m cash, some restricted, isn't going to be enough to drill their licences quickly to replace Platanillo even with the farm in so will any new reserves / production just be at the cost of more dilution? If they'd been piling up free cash it might be worth a punt but cash balances have been largely static despite little capex spent.

Voting No may make some feel better but I doubt it will improve on Geopark's cash offer.

[tyler durden1] 04/12/2019 11:09

Charlie. That doesn't explain a valuation in just May 2019 from Amerisur about the EXTRA VALUE created of $367.5m ($281.62), which was on top of the assets already owned, i.e. OBA, all production, leases, cash, joint partners paying for development, and only included Mariposa well with nothing in it for any other well on CPO-5 including Indico, but which alone valued greater than the bid from Geopark!

Look at the glowing statements from the BoD in their OWN valuations, then look at Geopark's valuation of Amerisur which does not include cost of developing it.

Options in the past have been awarded for such valuations. If they are spurious, which the bid seems to suggest, then those options should be clawed back and an investigation made into the administration of this company, including remuneration, expenditure and the cash pile and proven reserves, and where some other leases we have have proven oil.

There could and should be an in-depth investigation into not the only bid but the statements put out by Amerisur and where for two years running fully funded Capex drilling failing to get anywhere near the presented drill numbers, along with RH appear to ably assist the share price hitting rock bottom.

[acv74] 04/12/2019 10:27

Admitting you were wrong or admitting you were duped?We never asked for this, the terms were imposed on us and limited the price we could receive, and the deal has clearly been done at a hugely discounted price.Vote NO to this disgraceful farce.

[charlieeee] 04/12/2019 10:26

Initially, I was numbed by this paltry offer, but on reflection, the huge success of Platinillo tapered off and nothing has replaced it, other than CPO 5 of which we only have 30% and are not operator: it simply does not generate the cash flows to properly exploit the rest of the portfolio and there do seem to be ongoing "indigenous population" issues.

The question to ask is why Michinoko has thrown the towel in.

This certainly does not fit in with his image, but perhaps the focus on the way the world is going gives him better insight into what is likely to happen to the oil industry and when: this is yesterday's investment and today's dirty word.

The end of al101UK's post caught my eye:

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).

Time is not the friend of oil investment: we could be closer to that tipping point than we think and the failure of the N sands, passing up the opportunity to partner with GTE and get Put 8 drilled and then the Calao debacle simply mean that we have run out of time.

There do not look to be any good options: but given that M & P have withdrawn based on "due diligence","No" looks a bad option.

A bitter pill, but I want to move on at the end of January.

Commiserations to all the loyal LTHs here, who have lost money.

[al101uk] 04/12/2019 09:10

Tyler,

I don't know what's gone on, just offering an alternative narrative to the one that casts GC and JW as some nefarious masterminds somehow making huge amounts of money by selling the company on the cheap.

My story only involves them being slightly less competent than average, greedy and in fear of being found out.

Take your pick or invent your own, they are both guesses. I guess my version means admitting maybe you were wrong and makes deciding on your vote more difficult, where as yours makes voting "No" a far easier choice.

[thegreatgeraldo] 03/12/2019 22:30

A stitch in time saves 19.2p

..Acyually, exactly the opposite.... vote the deal down & knock a big hole in the 19.21p on the table

[acv74] 03/12/2019 22:15

Yes but there are lots of other shareholders out there who may not be happy with being shafted. I suspect the deal may pass but the result is not a foregone conclusion by any means.

[dgarvey] 03/12/2019 21:03

With over 1.2b shares, even 80m+ is a drop in the ocean. Need 240m plus to change the outcome.

[tyler durden1] 03/12/2019 18:08

al101uk. That doesn't explain why they didn't drill some of the other leases, including ones that had known oil.

Also the drilling campaign did not concentrate on Plat at all? Just one well was envisaged there.

But PUT-8 and PUT9/12 had 1-3 wells envisaged.

The biggest failure is via ONGC who clearly had a vested interest in NOT DRILLING. There up to 6 wells were envisaged.

The real stitch up might appear to be Geopark and ONGC and Occi. and I believe we will see that after any bid.