Amerisur Resources plc

“Amerisur Resources is an independent full-cycle oil and gas company focused on South America, with assets in Colombia and Paraguay. Amerisur’s strategy is to acquire, explore and develop large acreage positions in major underexplored basins located in South America. The Company is listed on the AIM Market of the London Stock Exchange.”

Key Facts:

  • Share price 50.50p
  • Market Cap £535m
  • Net Assets £89m
  • Shares in issue 1,056,668,831
  • % Free float 97.13%
  • 30 day avg vol 2,749,000 (Note – illiquid)
  • Rex Harbour largest shareholder 12.35%

Broker Views:

  • Goldman Sachs, 4th June 2013, NEUTRAL, Target Price 82p
  • Investec, 14th January 2014, BUY, Target Price 75p

AMER’s share price rose from around 20p at the start of 2012 to over 40p by the end of 2012. 2013 saw its share price range from 40p to 60p and ended the year with a strong rise to a high of 65p. The share price has recently retraced from this high to its current price of around 50p. We think this provides an excellent buying opportunity.

Fundamentally, it has a book value of roughly £90m (depending on FX rate) and the market values the company currently at £535m. This equates to a price to book value of around 6. In our view this seems quite expensive but looking at AMER’s results over the last few years, it is more about the revenue and earnings growth and we believe the share price will continue much higher on this assumption.

In the FY 2012, revenues came out at USD42.19m and pre-tax profit of USD20.14m. In the first six months of trading in 2013, revenues came out at USD64.4m and pre-tax profit of USD29.1m. So they have already surpassed 2012’s results in the first six months of FY 2013. They are forecasted to earn around USD160m in revenues for FY 2013 and pre-tax profit of around USD90m. Very encouraging and they are set to continue this growth into FY 2014 and FY 2015 which can be seen in the forecasts below in GBP terms. On its current valuation the Price to earnings ratio is expected to be around 13.7 based on FY 2013 results. This isn’t too bad and is set to come down based on forecasted figures. We would conclude that the share price will rise should AMER be able to fulfil its broker forecasts.

Amerisur Resources Fundamentals

Year Ending Revenue ($m) Pre-tax ($m) EPS P/E PEG EPSGrth.
31-Mar-09 0.50 0.07 0.01¢ 272.8 n/a n/a
31-Mar-10 2.75 (1.96) 0.10¢ 259.1 0.4 +598%
31-Dec-10 9.01 2.26 0.17¢ 176.4 2.5 +72%
31-Dec-11 14.19 3.51 0.19¢ 145.1 14.5 +10%
31-Dec-12 42.19 20.14 1.35¢ 57.0 0.1 +610%

Amerisur Resources Forecasts

Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPSGrth.
31-Dec-13 99.42 56.45 3.62p 13.7 0.0 +343%
31-Dec-14 154.34 92.54 5.86p 8.5 0.1 +62%
31-Dec-15 228.08 145.33 8.83p 5.6 0.1 +51%

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