Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Worried About Oilers in the Middle East and Ukraine? – Try South America.

By Malcolm Stacey

20 June 2014 08:03

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Hello Share Paddlers: There’s a plucky oil company called Amerisur Resources (AMER). I found the tip on this punchy website and put some money into it. It’s since put on another 33% But I don’t think the fun is over yet.

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Comments

Steve

20 June 2014, 09:02

“Yes, Amerisur’s price-to-earnings ratio is a bit scary at a 61. But p/e ratios don’t take account of a rosy future – and this company may just have one.”

Price to earnings ratio is about 20 based upon 2013 released financials and based upon production in first half of 2014 will fall to about 12.

Pipeline to Ecuador is key which will allow production to be increased by about 60% as it is currently constrained due to export capacity and not field production capacity at which point PE falls to around 8 or possibly lower due to increased operational efficiencies. The pipeline is expected to be operational in H2 2014.

Additionally high impact exploration will kick off in Paraguay towards the end of this year and in Colombia in the block adjacent to current production which could add multiples to the current reserves base and allow further significant production increases in coming years.
Malcolm Stacey

20 June 2014, 10:13

Thanks, Steve. My p/e ratio is out of date, though I checked on a few broker websites. A lot of these sites produce old data, I fear. With the p/e worry out of the way now, it makes me want to invest a bit more now. Thanks again