A disappointing update from Amerisur on operations and reserves. All are heading lower and that’s after spending roughly $50m+ in capex drilling wells. From May onwards, the drill bit starts spinning on more targets which if successul will save some blushes across the management team. The latter have over promised and under delivered. If Amerisur was a premier league football team, then you can bet your last easter egg they would have been sacked long ago. Mariposa-1 and CPO-5 (as a whole) is the jewel in the crown and thankfully that it is in the hands of ONGC’s management team which look ten times more experienced and capable than AMER. A large HNWI seller adds further woes to the share price and based on today’s RNS’s, he’s been bang on the money when it comes to selling AMER. The stock is down from 2017 highs of 26p to 13p levels this am. AMER was added to the ShareHub 2018 hotlist based on the Mariposa-1 and CPO-5 potential. Progress on this asset looks on track and the next drill target (if successful) has the potential to move resources up considerably. That asset alone is potentially worth Amerisur’s current market cap. It’s been a tough few years for investors and should a predator come forward and offer to end the misery – it might be accepted with ease. AMER has plenty to offer in a region that is seeing renewed interest of late. But management needs to change as progress is slow and cash burn is high.
News catalysts such as drilling results in June/July should at the very least see some speculators return to the stock. But a change in senior management might see much needed larger investors return. Amerisur’s AGM is normally held in May so not long for shareholders to voice their concerns as well as put pen to paper.
Today’s RNS’s can be found on the Amerisur website here