Amerisur Resources is exploring for oil and gas in South America, currently in Colombia and later it plans to exploit its licences in Paraguay. It has a new Board of Directors and following a recent Placing at 6p (250m shares) sufficient cash to see through its current drilling plans and carry out some further corporate asset improvement opportunities.

Valuation of Amerisur Resources : 'Rule of Thumb' based on c.800m shares and using 10% DCF on oil at $70/barrel is 0.75p on the sp for every 1m barrels (CHP's share) that is proved in the ground.

Amerisur (formerly Chaco Resources) now has two exploration blocks in Colombia which it is currently evaluating and preparing to drill, one of these in the last quarter of 2007. It has also applied for further blocks in Colombia which are also believed to offer near term production. It also has three substantial areas in Paraguay and is awaiting news on a fourth. The next six months (May-November 2008) should see a steady news flow as it establishes the companys transformation from being an exploration company to becoming a significant oil production company. Set out below are some of the milestones which should produce announcements and have a positive effect on the share price. Any potential reserves are quoted in recoverable oil assets.



Platinillo, Colombia :

100% interest in a field currently assessed at holding 38.1m barrels of light sweet crude oil. Previously this a well flowed at 533 b/d before it was capped.Modern extraction methods may achieve up to double this output/well. Drilling completed for assessment and details of reserve figures and resumption of production daily figures awaited at Dec.2009. (Some guessestimates suggest the field might contain as much as 70m-100m barrels.)

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Tigra/Fenix block

100%% Further 3D seismic is completed; previous drilling has resulted in 30,000 barrels of oil from this block. Other blocks nearby in the Magdalena basin have also produced well. Drilled 11/2009; optimistic RNS (17 leads to follow)but reserve figures awaited

RNS :Expect further news on this block imminently and maybe a JV or other arrangement to speed up the timescale to production



Additional blocks to be announced

New local management team, in particular the CEO, is reputed to have some excellent contacts which will bring some high quality blocks to Amerisur in the coming months.

Curupayty Block, Paraguay :

1.39m hectares in north, close to Bolivia. Two wells previously drilled and both showed oil.

RNS : Expect JV with larger producer.



San Pedro Block, Paraguay :

1m hectares in south-east. Previous drilling showed oil.

RNS : Expect JV with larger producer.



Parana Basin, Paraguay :

Canindeyu block covering 1,789,000 hectares. Bordering Brazil. Oil field on Brazilian side already drilled. Chaco also expect to find oil and, at a deeper level, considerable quantities of gas. Chaco has obtained valuable historic seismic for re-evaluation.

RNS : Presidential Decree received 2/11/06.. Petrobras has announced its intention to increase substantially its effort to exploit Paraguay's hydrocarbons and has announced a farm-in on CDS's adjacent block. Possibility that they or another major will do likewise with Amerisur



Corporate Activity : The new Chairman is believed to have been brought on board to prove some or all of the existing Colombian assets and get these oil producing, arrange a JV on the Paraguayan assets before negotiating a sale of the company as consolidation of explorers in the region continues. An exit sp north of 1.00 over the next 12 months might be a reasonable target provided the drilling programme lives up to expectations, the price of oil remains at/above current levels and an approach is made for the company.

It appears as though the Repsol deal is being kept on the QT while they negotiate the Ecopetrol share. Repsol is 100% in the bag and no one 'close' will rebut that but so far the company refuses to put out as an official RNS. Logically to me that means they are after the ECO slice as well and that explains the unnannocunced cessation of testing back in February that was 'not considered price sensitive'
The latter fact has hurt many small shareholders and the company needs to know this. The missing of an update giving the rise to approx 600 bopd x 2 also hurts as it would help underwrite the '100m barrels' statement in the brokers note.

I believe confirmation of the deals is not far away. I suspectthey are waiting for the pumps to be installed and active before they reveal anything further about their success.
Simply they want to freeze out the margin trades and extended small holders.
In that regard they are doing a very good job.

Holding on and taking the pain will pay off in that not too distant future. They have a very clean and clear game plan now.
As with Fenix and their 100% untouchable holding there they also want 100% untouchability in Alea/Platanillo! GC and JW want to be unassailable when they reveal what it is they have found.
and that is a very great deal of oil!

Very well summised UOTL.

summarised or surmised?

The news we wanted?

Of course. They've had to sit on it for four months thanks to the bureaucrats at the ANH. Now that the deal has finally been approved it's unfortunate to say that least that it comes out when the markets are in meltdown. Shame it wasn't rubber stamped back in June when the sp was up to 9p but what can you do? At least they are doing what they said they would. More of the same to come... in better times, I hope.

How unlucky can a mgt be in terms of timing an RNS? - although Tanfield managed to buck the trend, but having announced a loss! At least Amer didn't waste any 'news' on reserves and flow rates. 60% 0f what they are rumoured to have - with the possibility of Ecopetrel's 40% as well should cause a stir when it gets confirmed. (same source that said they had the Repsol stake)

I most certainly hope they get the ECO share.
I would like to see the 100m barrels confirmed first but if they are in negotiations with ECO then we may have to wait.
60% of 100m barrels is quite a tidy sum in itself.
ECO have to pay us for their share of expenses for Plat-3 or we will go it alone and have 100% of that. Cost there is $6 if I recall correctly. Well within our capability now, especially if we get funding upfront from the Fenix JV partner.
So we may have to forego 40% of Alea-1 and Plat2, maybe? I can live with that. They have up to 14kms in a wall of oil going north from Plat-3. That could be a very great deal of oil if it proves to be correct.
The story is positive and will continue to be so, getting better and better as time passes.
Meantime we need to get successfully past Thursday, with the DOW, in order to improve short term

A disappointing day today, I myself expected a small rise on this news but the general market has dampened things somewhat!

whats next on the horizon?

In my mind we have 3 areas where things can improve.
Firstly a JV partner at Fenix, this will no doubt have a pos effect.
Secondly, increased flows from testing. I dont think we will get any numbers until testing is complete, and reserves confirmed, but we live in hope. Finally there has been talk of new licences, IJ has made several references to our new operator status and how
this will stand us in good stead come the October Auctions. On this point I must refer back to the AGM when JW more or less said they are content with what they have, so its a bit of an unknown factor for me.

All on all the way ahead is much clearer now, but there remains downside risk
in the short term, this risk being exaggerated by the overall marketplace.

M

Not really the sea of blue one would expect!

If you have confidence in the management of this company, then surely this latest announcement is good news?

Has anyone else got a screen of 5 mln sells today? If so, any news as to why?

not all sells ches.

Some shorting going on here; or is this just symptomatic of a very soggy market?

more likely just reflecting the true quality of the company

It's OK, we know your views. My comment was aimed at the more objective observer.

mine is very objective ..... i had the sense to bail out about a year ago

UpontheLD,

Still confident?

Absolutely!
Flow tests will be with us soon.
Maybe more about Fenix JV.

And possibly a decision about Platanillo 3 for early 09.

Sounds good.