Amerisur Resources – Monthly Production Update

Go back 6 months and you would find Amerisur pumping out 5000bopd. Mariposa-1 LTT months away from first oil and PoO trading at $42pb. AMER Share price at the time… 27p.

Today, AMER updated the market on production levels topping 7200bopd. Almost 50% higher than back in June. Mariposa-1 LTT is underway and quickly rising to 3000bopd (approx 1000bopd net to AMER). PoO trading at $58pb, 40% higher than 6 months ago. With Mariposa-1 expected to continue rising to levels near 4500bopd, AMER should be adding a further 500bopd to totals in January subject to well performance and social issues of course. Share Price today… 18.5p. Yep, you heard that right. AMER would need to rise 50%+ just to get back to levels at 27p last seen when the company was doing 50% less production and with PoO almost 40% lower. The mind boggles. It’s certainly a puzzle. Sooner or later the disconnect between AMER’s share price performance and the business performance should close. I suspect when the market has evidence of increased cash flows it may well rerate back to 27p levels within a couple a days. The market has a habit of trading irrationally for months and months only to correct its poor valuations in a matter of days. 2018 looks a great year ahead for AMER as the company heads towards 10kbopd assuming future well successes. Mariposa-1 and the CPO-5 licence really is a game changer for the company.

At 18.5p, it looks a gift.

AMER is not part of the sharehub top ten for 2017 but has been covered via the ‘heads up’ category designed to alert investors to value/growth opportunities in stocks. Usual Risks apply. See the risk section for more information.

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Amerisur Resources PLC Monthly Production, OBA and Operational Update
04/12/2017 7:00am / UK Regulatory (RNS & others)

Monthly Production, OBA Throughput and Operational Update

Amerisur Resources Plc, the oil and gas producer and explorer focused on South America, is pleased to provide unaudited production from the Company’s two producing fields, the Platanillo Field, and the Mariposa-1 Long Term Test (LTT), and provide OBA throughput data for the month of November 2017 (the “Period”). Mariposa-1 commenced production on 17 November 2017, with stable production post a Pressure Build Up Test commencing 24 November 2017.

Production

— Total production was 181,537 barrels of oil (“BO”) during the Period.

— Average production per calendar day was 6,051 barrels of oil per day (“bopd”) during the Period.

— Average production per operational day was 7,037 bopd since the initiation of the Mariposa-1 LTT.

— Peak daily production was 7,217 bopd during the Period.

— Mariposa-1 LTT production has increased from a controlled rate of 1,487 bopd to a controlled rate of approximately 3,100 bopd.

— Company expects further increases in production from Mariposa-1 LTT.
— Current Amerisur production before royalties is approximately 7,051 bopd.

OBA Export

— Total export volume was 173,055 BO during the Period.
— Average throughput per calendar day was 5,768 BO during the Period.
— Average throughput per operational day was 6,310 BO.
— Peak daily throughput was 7,066 BO during the Period.

The company is expecting a sustainable year end exit rate of production in excess of 7,000 bopd and average production for 2017 of slightly below 5,000 bopd on a calendar day basis due to peace process related social issues, and above 5,000 bopd on an operational basis.

Platanillo-25 has been produced at a controlled rate since early November and has stabilised at 180 bopd with low water cut.

John Wardle, CEO commented:

“I am pleased current production is over 7,000 bopd. Platanillo production was affected due to a short period of regional social issues in the early part of November which have now been resolved by central Government. Platanillo-27 on Pad 2N is drilling ahead on time and budget and we expect results from this well in December. I was pleased to report the commencement of the Mariposa-1 LTT, which is adding further material production to Amerisur, with, we believe, more to come from this well as the LTT process develops.”

Hummingbird Resources – Tipped in Financial Mail

Not surprising to see Hummingbird beginning to hit the newswires. It can’t be long before first gold pour commences and the cash starts rolling in.

Please view the article at source via the safe link below to give Joanne Hart the clicks she deserves.

http://www.dailymail.co.uk/money/investing/article-5139621/MIDAS-SHARE-TIPS-UPDATE-Gold-producer-aims-coin-in.html

MIDAS SHARE TIPS UPDATE: Gold producer that survived near meltdown now aims to coin it in

History: Dan Betts’ family has nine generations in gold

Gold is in the Betts family blood. Betts Metals is the oldest independent gold refinery in the country, founded in 1760 and now run by Charlie Betts, the ninth generation member of the business clan.

This genetic predisposition to gold has no doubt stood brother Dan Betts in good stead at Hummingbird Resources, the exploration firm that he founded in 2005.

Hummingbird floated on Aim in 2010 at 167p, when operations were based in the middle of the Liberian jungle, with an estimated 800,000 ounces of gold to its name. Estimates rose steadily but the gold price fell and with it Hummingbird’s share price.

Midas recommended the stock in March 2011, when it was 143½p. By September 2016, the price was just 22½p, following a tumultuous five years, during which the group almost collapsed and Betts shifted the focus from Liberia to Mali.

The performance was hugely disappointing, even though it primarily reflected difficult market conditions. Midas suggested that existing investors should stick with the business and that 22½p could turn out to be a bargain price for new investors. Today, Hummingbird shares are 38¾p and the group is just days away from pouring its first gold at Yanfolila in southern Mali.

Ore has been mined for three months, stocks are building up, the processing plant is undergoing final tests and activity should kick off in earnest next week. The Mali site is expected to produce 130,000 ounces of gold annually from next year so Hummingbird will finally become a commercial producer, seven years after listing and nearly 12 years after it was founded.

Coining it in: The company also intends to produce a collection of decorative, one-ounce Hummingbird gold coins

Coining it in: The company also intends to produce a collection of decorative, one-ounce Hummingbird gold coins

Brokers expect revenues of around $120 million (£90 million) for 2018, rising to $157 million in 2019. No revenue is forecast for this year and there will be losses of around $6.5 million but in 2018, the group is forecast to make almost $16 million of profit, rising to over $60 million the year after.

The company also intends to produce a collection of decorative, one-ounce Hummingbird gold coins, available to shareholders, using gold mined at Yanfolila and refined by Betts Metals in Birmingham.

Midas verdict: Shareholders saw their investments dwindle almost to nothing before Hummingbird staged the beginnings of a recovery over the past year. But the company has survived, testimony to Betts’ perseverance. The future should be smoother – and the group still has a vast asset in Liberia, which could yet deliver value in the years to come. At 38¾p, the shares are a strong hold and new investors could benefit from snapping up a few – and even purchasing a commemorative coin.

Tullow, Premier and Enquest – Things beginning to look up again

You wouldn’t know it looking at the respective share prices of TLW, PMO and ENQ but all companies have thus far managed their debt piles, completed or part completed, large development projects, grown production levels and are now on the verge of reducing sizable chunks of debt. Tullow have already begun lowering debt and Premier (via asset sales) are following closely behind. These 3 companies are all trading at levels last seen when PoO was in the $30’s. Today, PoO has virtually doubled.

Today’s news from Enquest confirms that covenants have been relaxed which is another sign that debt holders believe recovery is around the corner. Earlier in the week, Tullow secured a new RBL further endorsing confidence in the business. It’s been a tough 2 to 3 years, but it looks like all 3 companies will survive and should indeed begin to flourish again with PoO in the $60’s. The latter is of course unpredictable but all companies hedge portions of production to ensure downside risks are protected – to some degree. PoO will always be unpredictable but with Saudi’s seeking an Aramco IPO next year, it’s highly likely that PoO will be higher in 2018 than it was in 2017.

News emerged yesterday that OPEC and NON OPEC (Russian’s) are expected to agree a further 9 month extension to the production levels set this time last year. That’s positive for PoO but still requires a decent level of compliance. Wild cards like Iraq and Iran recently said that they agreed to the 9 month extension but figures show that neither are keeping to their agreed quotas. Iraq should hang their heads in shame. They have systematically gone about raising production higher and higher and their compliance levels were at just 52% according to some sources. The recent spate with the KRG has seen production fall over the last couple of months which is ironically the only reason why their compliance has risen.  I would expect today’s OPEC meeting to focus firmly on ‘compliance’ as without it, the production deal is weak.

The MENA region has been in conflict for decades now and recent stirring by the Saudi’s is not helping relations. Whether it’s Qatar, UAE, Yemen, Lebanon, Israel or Iran… the Saudi’s seem intent on throwing their weight around. Markets in general have been watching supply and demand closely via US data but have paid little attention to production levels dropping across the globe. Venezuela is in deep trouble. Investment in African producing regions has fallen due to increased or unpredictable tax regimes and corruption. Investors no longer look at Nigeria as an investment in the same way as before. The North Sea is becoming more attractive due to Government tax policies but also due to the stability and quality of the licences. It’s hard to tell where the new supplies are going to come from but a year or two at $60pb or better should certainly allow the industry to test the impact of US shale recovery. Hence, it’s going to require constant monitoring by investors and that includes EV’s and other technologies that seek to move demand away from traditional energy resources.

The next few years will be interesting to watch and assuming PoO settles in the $60’s or better, Tullow, Premier Oil and Enquest should all recover well. Finally, watch out for M&A. Historically, it tends to kick off when the green shoots are past the frosty period and looking stable. Still vulnerable, many ‘recovery’ companies in the sector may get picked off in 2018.

TLW, PMO and ENQ are part of thesharehub top ten picks for 2017.

Russia-OPEC Agree on Framework to Extend Oil Cuts – Bloomberg

All eyes and ears turn to next weeks Nov 30th OPEC meeting. An extension through to Dec 2018 really would be bullish for Crude. OPEC do meet twice yearly so one would think an extension to June 30th looks a shoe-in. The current deal expires on March 31st 2018. Hence, an additional 3 months would be welcome, but 6 months would be something the market (quite frankly) is not expecting. Hedge funds increased shorts on WTi last week and are ready and poised for some downside should OPEC disappoint. It’s likely that more news will be drip fed into the markets over the next few days – but lets be clear here, it’s just ‘chatter’. OPEC will decide ‘officially’ what to do on Nov 30th and history shows us that the Saudi’s have not been shy from walking away and leaving things as they are if other members do not maintain their share of cuts. Compliance in late 2017 and early 2018 is key. Thus far it’s been pretty good. Long may it continue.

Bloomberg article below:

Russia-OPEC Agree on Framework to Extend Oil Cuts

  • Kremlin said to be willing to announce end-2018 deal on Nov 30
  • Various options still on the table, says Energy Minister Novak
Photographer: Andrey Rudakov/Bloomberg

OPEC and Russia have crafted the outline of a deal to extend their oil production cuts to the end of next year, although both sides are still hammering out crucial details, according to people involved in the conversations.

The Organisation of Petroleum Exporting Countries and several non-OPEC nations led by Russia will meet next week in Vienna to discuss prolonging their output curbs. Moscow had been hesitating over the need for an extension now because the current deal doesn’t expire until the end of March.

After days of talks, Moscow and Riyadh now agree they should announce an additional period of cuts at the Nov. 30 meeting, the people said, asking not to be named because the conversations are private. Russia wants the extension deal to include new language that would link the size of the curbs to the health of the oil market, they said.

“The goal to re-balance the market hasn’t been met in full yet, so everyone is in favor of extensions to reach final goals, Russia also supports these proposals,” Energy Minister Alexander Novak said in an interview with RBC television on Friday. “Different options are considered now, we will discuss details at the Nov. 30 meeting.”

The deal isn’t finalized as Russia and Saudi Arabia haven’t yet agreed on the new language, the people said. Oil ministers are due to start arriving in Vienna for the talks early next week.

West Texas Intermediate crude, the U.S. benchmark, extended gains to the highest level since July 2015. Futures for January delivery rose as much as 1.6 percent to $58.92 a barrel in New York.

OPEC and non-OPEC countries are discussing several formulas to accommodate the Russian demands, including linking the cuts to the supply-demand balance on the global oil market, or the level of fuel inventories in industrialized countries, the people said. Another option is making a clear reference to the fact that the deal could be reviewed again early next year, including the possibility of calling another meeting.

Russian President Vladimir Putin talked on the phone with Saudi King Salman bin Abdulaziz on Nov. 21, during which they “emphasized importance of further coordination between Russia and Saudi Arabia in the global hydrocarbon markets,” according to a Kremlin statement.

— With assistance by Dina Khrennikova, and Angelina Rascouet

Petrofac – Predators circling

News late out last night on predators circling Petrofac. It’s not surprising as the company has been halved in price due to an SFO investigation that is yet to show any proof of wrong doing.

Petrofac is a big player with plenty of rolling contracts and some projects worth billions. Any predator will know the industry well and know the real value of those contracts. The only thing the potential buyer is unsure about is of course the outcome of the SFO enquiry. That said, if previous industry reports and fines are to be understood, then any fine is likely to be minor when compared to the hefty slice already incurred on the companies market cap.

PFC was trading at 490p prior to the commodity bounce which occurred several weeks ago. PoO has since increased by over 25%. Yet PFC’s sp is some 70p below those previous highs.

Not for the faint hearted. There is significant risk here. But after the market cap being sliced in two, it’s certaily offering decent risk vs rewards odds with or without a potential bidding war.

US oilfield services giants Schlumberger and Halliburton are understood to be among the firms circling scandal-hit Petrofac and are bolstering their attack teams to capitalise on the FTSE 250 firm’s vulnerable share price.

Just days after The Sunday Telegraph revealed that Petrofac has beefed up its defences in preparation of a takeover siege from some of the biggest names in the oilfield services industry, City sources have confirmed that the two US firms and an undisclosed Middle Eastern bidder have parachuted in advisors to look at an opportunistic bid for the company.

Petrofac has been left vulnerable to a swoop after its share price fell by half following a Serious Fraud Office probe into the firm’s alleged involvement in the Unaoil corruption scandal.

The Daily Telegraph understands that no party is ready to pull the trigger imminently but City chatter has suggested a bid of around 600p per share is being considered by the interested bidders.

That would represent a hefty premium on its current 406.9p share price but a bargain compared to the 946p-per-share valuation it peaked at earlier this year before the SFO investigation.

It is thought that top shareholder and chief executive Ayman Asfari will be resistant to a takeover but a spate of consolidation deals in the oil services sector – including Wood Group’s merger with Amec Foster Wheeler – has upped the pressure on firms languishing with lowly valuations.

Premier Oil – Trading Update

Premier Oil issued a trading update this morning. Key points below. Nothing nasty in there and all on track. That said, there’s nothing stunningly great in there either! One thing is clear. Without the EoN deal which brought in 13kboepd+ (approx) the numbers would not look so pretty. Progress is steady and as per expectations. Symptomatic of a business that has come back from near death. Investors will raise an eyebrow at the silence on Sealion. Premier have given this project some lip service in the past but on this occasion it doesn’t even get a mention. Not surprising really. Premier have enough on their plate with Catcher and sustaining current production and there is no way on this earth that they will be allowed to stretch the capex to Sealion anytime soon. The positive notes in the update come from Catcher which is on track and below budget. First oil is cited for Dec but as Enquest investors will know all too well by now, first oil is a big event yet small commercial milestone in real terms. Getting Catcher up to full speed is the key calendar date for PMO investors. The cash flows are much needed. Looking at the numbers, slippage can be seen across some divisions of the business and natural production declines are to be expected. Solan is still knocking out sub commercial rates which will barely cover the interest payments on the £1.2bln+ debt incurred. Had Solan never happened, PMO would be in fine shape today. Hindsight is a wonderful thing! It’s now vital that Catcher delivers and delivers fast. Any issues like that of Solan and it would potentially be the end of PMO. Catcher must deliver – end of.

Premier Oil is part of TheShareHub top ten picks for 2017.

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PREMIER OIL PLC
Trading and Operations Update
16 November 2017

Premier provides a Trading and Operations Update for the period 1 January to 31 October 2017.

Highlights

·   Production averaged 76.6 kboepd year-to-date with planned 3Q maintenance completed; on track to meet previously increased full year guidance of 75-80 kboepd

·    Catcher on schedule for first oil during December; FPSO swivel and buoy successfully mated with the final rotation test imminent and final topsides system commissioning proceeding well

·     Heads of Terms signed for FPSO lease extension on Huntington field, extending the life of the field

·     Government agreement signed for the sale of Tuna field gas in Indonesia to Vietnam

·   Zama appraisal: pre-unitisation discussions with Pemex underway; likely 4 well appraisal programme commencing late 2018

·     Disposal programme ongoing including sale of Wytch Farm field for $200 million; shareholder circular to be issued imminently

·     Forecast 2017 operating costs of c$16/bbl and gross G&A of $150 million, below budget and in line with previous guidance

·    Forecast 2017 development, exploration and abandonment expenditure expected to be $300-310 million, down from previous guidance of $325 million

·    Net debt of $2.8 billion at 30 September; debt reduction forecast at year end, including effects of ongoing planned disposals

Tony Durrant, Chief Executive, commented:

“Through strong production, cost control and disposal activity, cash generation is ahead of plan. The excellent progress on the Catcher project, combined with the recovering oil price, will accelerate debt reduction through 2018. The agreement to export Tuna gas to Vietnam, signed last week, adds to Premier’s significant backlog of future growth opportunities.”