From the Top Idea article: AMER.L versus PTA.V pipsqueak,
Here is another answer as quoted from VD's "Top Idea" article that I saved in my records when it was out in late August:
" My Takeaway
When it comes to investing in Colombia, my track record speaks volumes. So I assure you that Petroamerica is a diamond in the rough. Or to say it differently, Petroamerica is a "Parex Resources in the making".
Pro forma the deal with Suroco, Petroamerica is one of the fittest publicly-traded oil and gas companies. This strategic acquisition provides added scale and diversity to the Petroamerica portfolio, material exposure to an exciting new play in the Putumayo basin (the prolific N-Sand exploration fairway), and a production and reserves base that complements Petroamerica's with the ability to add significant future growth.
The new Petroamerica, since the acquisition of Suroco, holds interests in twelve exploration and production contracts in the Llanos and Putumayo Basins of Colombia , covering more than one million gross (over 500 thousand net) acres focused on high netback light and medium oil. This portfolio includes a substantial inventory of exploration prospects and leads that will be pursued to support future production and reserves growth for the Company.
Through that deal, Petroamerica also added operatorship, given that Suroco was qualified as a restricted operator in the 2010 bid round. Suroco got the operatorship for the PUT-7 Block that was acquired from Petro Caribbean Resources a few months ago. On top of that, the combined company intends to apply to become an unrestricted operator over the next months.
Petroamerica expects to be able to fully fund internally its operations for the year through the combination of free cash flow and cash-on-hand, while continuing to pursue select new business opportunities that will enhance the existing portfolio and provide additional future growth in its two core areas.
I must also point out the tremendous valuation gap between Petroamerica and Amerisur Resources. First, Amerisur Resources has nothing more than one producing property (Platanillo Block) which translates into zero diversification. Second, Amerisur's Platanillo Block is right next to Suroco's (now Petroamerica's) Suroriente Block which is a gold mine, given that both the Cohembi and the Quinde oilfields are there. Third, Amerisur and Petroamerica have negative Net Debt.
In other words, there is nothing that makes Amerisur better than Petroamerica, and their tremendous valuation gap is beyond any understanding and completely unjustified. The inefficient market is here. The only reason behind this huge gap is the fact that Amerisur's primary listing is on the London stock exchange (ticker: AMER.L), and Amerisur's buyers (mostly European investors) do not have the opportunity to compare Amerisur to Petroamerica and realize the big picture.
If Petroamerica had Amerisur's key metrics (EV/Production, EV/2P reserves, EV/EBITDA), Petroamerica should trade now between C$1.5 and C$2 per share.
After all and as the story gets out, the bargain seekers will not afford to overlook Petroamerica at the current price of C$0.39. The stock has nowhere to go but up, given that Petroamerica's fair price compared to the peer group is C$0.85 per share, while the company's NAV is estimated at C$0.76 per share (low estimate). "