what came out of the agm

The AGM was well worthwhile attending, and you can tell from the bit of buying afterward that it must have gone well.

Importantly:

1. The MD discussed his frustration with the share price, and said they are in motion to see the company more fairly valued. Most importantly, it sounds as though the link with RBC (Canadian Bank) is a strong step in that direction (more on this below) [Clients of RBC own shares in AMU] The opportunities with RBC are to either list in the US, a merger, or an acquisition.

2. There was a presentation by Dwayne Travelstead, who runs TNT Engineering, the company which operates all the 669 wells which AMU owns or part owns. Clearly, this is in good hands. They have been doing it a long time. He mentioned, very interestingly, that AMU's share of net operating income is now running at $2.3mUS/month and growing. He valued AMU's operations in the US at $264mUS (after repaying the $75m of debt, which has recently reduced to about $65m). I think it was either he or the MD who said that our market does not understand the value of the assets in the US. [I believe that $264mUS equates to a share price of $1.60....but there's more !! see below]

3. Bill Drury ( I think that was his surname) gave the final presentation. This was the really exciting part. He is in charge of the wildcat drilling...the big stuff. The MD earlier explained that having been in existence for 11 years, AMU was now at the point when it was ready and prepared to invest heavily in serious exploration, drilling prospects which would make a meaningful difference to the company. Bill said he had been in the game 31 years, and this was the most excited he had ever been. Moreover he expressed dismay at the recent share price of AMU and was buying shares.

He explained that advances in technology and 3D seismic surveying now allowed for much lower risk in wildcat drilling. They have 14 wells planned over the next 14 months. He thought every one of them would be a winner, but said that even if they achieved only a 25% hit rate ( their recent success rate is 30%), it would add 40cUS/annum net cashflow to AMU, and therefore argues it would add $4US to the value of AMU (using a price multiplier of 10, which is probably fair enough), hence his belief that the current share price is ridiculous. [Hopefully the company will post his slides as an announcement, because he had a schedule of the various wells and the estimated production and cash flow and worth for each prospect]

Bill also stated that the cost of drilling had come down quite a lot in the last year....something like 30%.

4. Gross tete South is being spudded right now someone said....they thought it may have been last night our time.

5. Initially, RBC thought AMU was too small to be of interest to them, however after understanding the potential and obviously doing their homework, the MD says they are keen to now get involved. Clearly this arises from the potential of the exploration programme now in train.

So, I think what I took from this was that their ongoing cash flow of $2.5m/month is pretty well assured. The exploration programme over the next 12 to 18 months is very very exciting, and they are really on the front foot in terms of releasing shareholder value via the link-up with RBC Capital. I took on board Dwayne Travelstead's interpretation of the value of the existing US assets, and I think the audience was very impressed by what Bill Drury had to say and sensed the excitement.

You will note the appointment of Peter lehle as a Director in early October. He is an American and also spoke. He is AMU's man on the ground in the US, and is also very excited by the near term prospects.