Amerisur Resources Live Discussion

fynne 15 Sep 2018

Irritating H1 2018 average production increased 33% to 5,959 BOPD, with an average realised price per barrel of $64.2 (compared to $47.2 in H1 2017) I call that a damn good profit per barrel ? It’s in the last rns… you should read it … lol

The_Marin 15 Sep 2018

Irritating High extraction costs, a bit like Amerisur. Why do you think Afren had high extraction costs? Maybe it was because they were an honest company. I suspect they will have to pay a lot of corruption money to the locals to be allowed to drill in these remote area’s. The more they make the more they have to give. Bowman’s started to see the light but fynne’s getting worried.

Bowman 15 Sep 2018

Irritating There is absolutely no similarity between AFREN and AMER. A brief look at AFREN’s results shows they were mired in debt and needed continuous capital injections to continue their exploration, which is not the situation for AMER. Whilst I agree that some speculators look at shares such as AMER with “rose-tinted glasses”, especially judging by comments I used to read here before the site change and what I see when I foolishly look at the LSE chat site, very few Companies who do not produce what certain investors are expecting are actively involved in fraud or corrupt activities. AMER is not an old established Company (it was formed in 2007), but this does not mean it is a “fly-by-night” entity. The governments involved will always ensure that as much money as possible will be used for the benefit of the Country but this is balanced by the need to attract investment from outside of the Country. I believe that AMER has achieved a reasonable balance, which was shown by the very prudent decision to scale-back production when the oil price dropped; production that is slowly being brought back as the price rises. Obviously this was not appreciated by the more speculative investors hence the associated drop in the sp at the time. The performance of the sp will depend on the success or otherwise of the drilling campaign, but it might be some time before any real improvement occurs so investors should be prepared to wait for a return. This is not the right share for the more speculative type of investor who should really look elsewhere for their “kicks”. All the above is obviously my personal take. My small holding has been bought at various stages since 2014 and only accounts for <1% of my portfolio, so I am happy to continue holding at the moment.

fynne 15 Sep 2018

Irritating Afren had something like a billion dollars of debt with high extraction costs … just about the time the oil price collapsed… as I remember it?

fynne 15 Sep 2018

Irritating AFREN !!! in your dreams lol Clearly looking to short … think you’ve picked the wrong one personally but it’s your money The point Bowman was making is just how much a company even like “shell” has to spend each year and a small explorer like Amer if it wants to grow needs to do the same … nothing odd about that??? Is the whole of South America corrupt… I have no doubt whatsoever Is Croatia, Kazakhstan, Georgia, Greece or Italy ? and many more I could mention ?? Your reasoning and argument against Amer is very simplistic imo

The_Marin 14 Sep 2018

Irritating Afren would be a good comparison with this company but Shell no. I think PI’s should stop looking at this companies through rose tinted glasses and start to be a bit more suspicious about how it spends it’s revenue.

Bowman 14 Sep 2018

Irritating Maybe The_Marin would like AMER to be more like, let us say, Shell. Shell’s last annual report showed that they had revenue of $305bn, which they managed to turn into $13bn profit attributable to shareholders (i.e. 4.3% of revenue), and they added $1.2bn to their cash reserves. They also paid a dividend of $10.9bn, so if this is added to the cash (since it would have gone in the Bank if it had not been paid out to shareholders) makes $12.1bn, or 4% of revenue. This is obviously much better then AMER who only managed to increase shareholders funds by 19.3% of revenue, and only added $8m cash to the bank balance, or 11.8% of revenue. MONKEYSO: long period of poorish delivery of targets. I think that their poor record on delivery of promises is one of the main reasons that the sp is so low, since any potentially positive news of developments and exploration is viewed as being potentially over-hyped. I also believe that Rex Harbour’s continued disposals has suppressed sentiment since they appear to run counter to the positive spin being put out by the Company.

fynne 14 Sep 2018

Irritating I don’t understand why you want them to “bank profits” ?? Surely the best thing at this time is to re-invest as much as possible. “If” you hold shares in AMER are you not happy that the drilling program that’s just kicked off and with a possible 14 more next year will be paid for without share price dilution or borrowing?? Will the revenue stream be a lot higher this time next year … I’d say there a pretty good chance … along with the share price btw. There will be a time (hopefully) when they simply can’t spend fast enough and will have to bank more but they’re not there yet. If you’re looking for a divi I’d try BP … if you’re looking to short I’d think their are some far riskier stocks with absolutely no income whatsoever… jimo

The_Marin 14 Sep 2018

Irritating They can disguise the figures any way they want (cooking the books) but the big picture is they have banked very little money after generating around $160m in revenue and this is likely to continue in the near future at least. By the time they get any new finds producing it will probably just make up for already declining resources at best, treading water. The next set of results will see no money added to the bank. These types of countries will not allow share holders to make huge profits from there resources and they will take a large slice of any profit one way or another.

MONKEYSO 14 Sep 2018

Irritating Thanks for your considered analysis Bowman. I am inclined to agree that the bias is to the upside here,despite a long period of poorish delivery of targets.

Bowman 14 Sep 2018

Irritating Revenue was $68m, a $33m increase on the previous interims, however, “Cost of sales” increased by $18m over the same period, so “Gross Profit” only increased by $18m. This is what produces any change in cash positions. The profit attributable to shareholders after other charges are taken into account (including a $1m increase in taxation) moved from a $2.3m loss to a $10.8m profit, a change of $13.1m, which does not seem to be that bad. "The increase [in cost of sales] is principally due to higher production costs in line with increased activity, higher high price tariff charges and maintenance and workover costs." Exploration costs are filly funded and being borne by cash reserves, and the increase in cash shows that exporation is not burning through these reserves (unlike other exploration Companies). It seems to me that currently the potential for increased production from new wells is not factored into the sp, so although bad drilling results might have a negative effect I do not expect the sp to “tank”. Conversely any positive drilling results are more likely to result in an up-lift (hopefully quite substantial) of the sp.

The_Marin 14 Sep 2018

Irritating Of the $160mm revenue they generated in the last 18 months they have banked 10 of it. They have said it costs them around $20bbl to produce, around $40bbl profit but that does not equate to cash in the bank, not by a long shot. The share price tells me the market does not trust this company either. This share will tank on any poor drilling results. Columbia is known for its corruption and cocaine, it’s not gone away and the figures are suspect.

fynne 14 Sep 2018

Irritating They have spent a lot on infrastructure, pipeline, pumping station … never mind drilling and reworking wells etc etc They are involved with local projects also (please read the full chairs statement) which I’m sure is helping get the required acceptance from the people. Drilling 14 wells next year won’t be cheap either so I’m not expecting a dividend!! … what happens by 2020 when revenue could easily be double today’s figures or more. There is no debt nor constant placings to cover this as with many I could mention? I try and avoid those explorers with no income… constant dilution and always the fear the wells are not commercial… great for the shorter? and I’m sure the accounts are inspected occasionally… the image of a massive steel safe stuffed full of cash and cocaine with a big sweaty man smoking a giant cigar is amusing however I’m happy to sit on what I have through next year …

The_Marin 13 Sep 2018

Irritating I’m highly suspicious of this company, cooking the books comes to mind. They have managed to bank $9mm on $64mm revenue so that’s costing around $50bbl to maintain this level of producing revenue. Its going to get even worse next half with additional drilling costs. Better than last set of result where they only managed to bank $1mm on $94mm revenue, no idea where all that money went but probably some corrupt official or bandido.

fynne 13 Sep 2018

Irritating … just re read the rns and are they possibly 14 wells next year? 8- 12 exploration 2- 6 appraisal ? Assuming they’re planning 14 but haven’t decided on the split ?