Last year AMER made a profit on oil price average $50 per barrel.
Current oil price stands substantially above $50. At an average daily
production of 6,500 barrels, every extra Dollar per barrel amounts
to $2.3 million extra profit, assuming operating costs per barrel
remain much the same. I reckon to see AMER's profit for the
current year to be above $20 million. And hopefully an increase
in reserves through intensive exploration.
As of 15th March per Aim rule 26 information, Rex Harbour had reduced down to 4.35% ( 52,806,804 million).
Given the opportunity offered by the recent volumes, if he is still selling, I would have expected quite a reduction in that and probably a notification by the company registrar that he had gone below the 4%.
It is possible that he, like everyone else, might recognise the the upside which the near term drilling campaign might achieve and take a break from selling until the SP reflects that value?
Not sure about the whole RH thing or the reasons why he's selling but he had less than 5% as of 12/2 with 57m .. 6/3 holdings rns gives Canaccord over the 5% at 1.2b so have been a buyer .. RH could easily have sold the rest if that's his intention .. back to 20p and then some good news will see this go to a much higher level .. whilst those who've been here a long time are rightly frustrated I think now is the right time to invest ..jmo and my money !
I would have thought historical accounts are not much to go on .. as a company that is expanding year on year now the profit margin will vary dramatically! The latest accounts said £40m in the bank and that is going to pay for this years drilling campaign .. so no dilution to the shareholder .. Current production continues at around 6500+ bopd and seems shell are happy to take everything we can produce so the cash just keeps rolling in .. a lot of discussion has been had over reserves but all it needs is one decent strike and that will be forgotten .. past history is just that .. but amer will not be 15p this time next year imho
I looked back at the previous end-of-year profit levels and the corresponding sp. Back in 2011 AMER made a small post-tax profit and the sp reached about 20p, much like we have at the moment.
I think the fundamentals today are better than back in the earlier part of this decade so we need to see an actual profit level >$10m to get in the 30-50p sp range. We will have to wait another six months for official figures to be available.
Once we have actual drill test results on the new wells, and some upgraded production data showing significant higher production levels, then we could see a re-rating in the sp to >30p.
At the moment I would be happy to get above 22p, the peak level since June 2017.
I think I have been saying for quite a long time that reserves seem very low and need to rise for the SP to rise significantly. So I agree with Hub. The drilling campaign needs to be successful and that all will take time and then more time to get official reserve numbers. So not sure about 50p by year end. Hope I am wrong cos I am still invested.
We'll probable see some profit taking today, but on the
whole the share price is bound to go up, up and up.
Output is rising, oil price is holding firm above $65 per
barrel, production and transport costs for AMER now
below $40 per barrel. And more oil being found as we
go along. What is there not to like!
It's hard to believe that 14 drills planed this year, will turn out, to be, 14 dusters. Yes, anything is possible but that is really far fetched. Therefore I have no problem with present or future reserves and in my view, with 14 new drills, reserves will go up. Only question is, by how much. Just cannot see, the black picture, Hub is trying to present about AMER.
it can go a lot lower than 25p too Eggbaconandbubble.. as witnessed a lot, not least again extremely recently.. I grant you IF poo stays around these levels thru the rest of 2018 then 25p might well be a low number.... of course poo may fall back towards $60 too...and my guess is Amerisur would fall back at least somewhat in sympathy too if that were to happen.. and 25p could be a large premium then..
ps: also lots of capital expenditure required for current drilling plans and success is of course not guaranteed...
With no debt, lots of cash in the bank and 14 drills in 2018 they have lots of value to add before an approach is likely/would be welcomed.
Someone would need to amass 30% of the c ompany (c360m shares) to make an offer for takeover)...in that time the SP would indeed be a lot higher. It is only £72m in reality but still unlikely in the short term IMO. I believe this will go above 60p in the next 12 months should we get success with the drill bit...
AMER's share price will almost certainly rise above 25p of its
own accord without any predators sniffing about. So anyone
wanting to see a take-over at 25p plus, can just sell their
shares at 25 plus when they reach that level, and that may
be sooner than you think.
I would urge you not to expect profits at all and then you might be less disappointed. AMER have already stated that they have a very active drill plan in 2018 along with heavy capex with regards to pipeline / pumpstation works in Q3/Q4.
It's likey to be a 'spend the cash' period rather than 'book profits and dish out a divi'.
That said, if they have some success with the drill bit over the next 7 months, then that's a good return on cash spend. Grow reserves and boost production while the sun is shining.
They had similar ops last year and apart from CPO-5 delivered investors virtually zero for the cash spend. In fact, the bulk of cash spend was actually piled into workovers and just keeping the flagging wells from declining too much. The last 6months+ has been about maintaining and sustaining the current production levels and they've not done very well there to date. Since exiting 2017 with a slightly artificial 7000bopd level, they have been month by month struggling to get anywhere near that number again.
As per usual with AMER, it seems to be a case of next year rodney... next year...
With a bit of luck, ONGC might bring this sorry saga to an end. But just bear in mind... AMER was trading at mid 30's pre pipeline and lower costs, so at 18.5p, it's easy to see just how much damage the board have done in terms of credibility over the last 2 to 3 years.
I'm firmly with Hub on Amerisur management performance.... being generous, I'd say average to poor performance by management in last 3 years here...
If oil stays in $65 -$75 range thru this year many many oilers will print money this year, so Amerisur not special in that respect.. the strangest thing imho is how slow the Institutional Money is to switch back into the sector.. once bitten twice shy, I guess ...so many O&G'ers still cheap - or very cheap in some cases - imho...
Generally, as previously stated, I'm all for Amerisur being bought out asap for anything over 25p.. and 30p + might readily be achievable soon imho...
Hub - Let us agree to disagree. I remain of the opinion that
management is doing a good job, arranging and laying pipelines
for low cost pipeline transport, expanding exploration areas,
searching for and discovering new reserves - and all of that
at lowest possible cost.
With the oil price now well above $60 per barrel, I anticipate
2018 pre-tax profits to come in at $25m-plus, a dramatic
change from $0.6m in the year 2017.
ONGC would appear to be the obvious predator for AMER. I get the feeling that this will go on the cheap! 30-50p range, but not until next year once AMER have done all the hard work! There are other operators in the area that could be interested to drive up the price (Canadians).
I can see this rising to 23-25p range in the next few weeks/months, but as HUB alludes increasing reserves will be the main driver for medium term growth.
I think you're missing a decade from your numbers eg 2016 and not 2006 but get the crux of your argument.
Unfortunately we'll have to beg to differ. Based on facts alone, this management team have been good at one thing and one thing only. And that's 'over promising' and 'under delivering' while rewarding themselves handsomely via bonus shares or optons.
The last 3 years+ has been a mess and that's why the share price ended up near 13p not long ago.
The bounce back to 18.5p is welcome but do not assume for one moment that the leopard has changed spots.
The sooner AMER is sold to ONGC or another the better as current management team are woeful and that's me being kind.
Hub - I do not fully approve of your criticism on management.
They are a hard working bunch in a harsh environment. And,
most to the point, they turned a loss of $29m in 2006 to a
profit of $0.6m in 2007, and . And that at an average price of $50
per barrel. Current price is well above $60 per barrel. The future
looks bright, very bright indeed.
I think many expected 2017 to show profits after poO jumped by 50% and production doubled from 2016 levels. Yet, in the usual AMER manner, the directors managed to leak cash via less than transparent methods such as admin costs etc etc.
The reality is, AMER were unable to profit from increased production and increased PoO.
Disappointing to say the least. That said, assuming they have some success with the upcoming drill plans, the share price should recover. Replacing reserves is the key to delivering a higher share price and the company has done the opposite over the last 2 years+. So that is the key focus from here on.
Mariposa-1 and CPO-5 still the jewel in the crown and capable of delivering significant increases in production levels once ONGC decide on development (FDP).
Once seller is cleared, the stock should perform much better and that's the point which doesn't take a genuis to understand.
If you click "analysis" and then trades, you can see the list.
There appears to have been some recording error with the end of day UT, which repeats multiple times in the list (each time it tries to match rather than just the single final transaction at 16.35)
Including NEX the total volume was about 24 million, which is comfortably greater than any recent days: the closest I can find is April 2017.
Today, I assume that it is short closing: at the end of March the SOL figure was still standing just above 12 million: it would be interesting to know if the trades were ex RH stock or 10% flippers, but either way, it is a really great clear out of surplus stock/lows.
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