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.

sharesure -
AGM: August 5, Cardiff.
ML has been told it will be at the same venue as last year ie the St Mellons Hotel.
http://www.bestwestern.co.uk/Hotels/Best-Western-St-Mellons-Hotel-83508/Hotel-Info/Default.aspx

BWD, Thanks; I suppose that is when we will get an update on Paraguay - more waiting and patience!

SS - it looks that way. The Paraguay research work is now scheduled to take until August rather than July (March RNS) and we will have to take a view as to whether that is a positive, negative or neutral.

BD - did they say June? I can't see a ref to it.Perhaps I've missed it.
Talking of June, I was expecting a ref in the latest RNS to production restarting at Plat/Alea. Rather disappointed that nothing was said about that. Maybe waiting for the nod from the ANH or Ecopetrol but if that were the case I wish they would just say so.

Bwd, extract from May RNS ......Initial results will be available during early June and final analysis will be completed during July 2009.

no rush to do much with price of oil creeping down

BD, thanks. Was looking at an earlier one. I guess we will have to wait for the final analysis seeing as we have missed the "initial"...

Someone mentioned there's a hint of a company buyback of shares in the agm letter...... Firstly, is this true & secondly, is this not a tad worrying to us investors ?
I will be honest & admit that I haven't read my letter yet, still sitting on breakfast table at mo.

AGM letter? Didn't know there was one. If Aug 5 is now official why haven't they posted the date on the webshite? Incredible.

BWD, I think it's a proxy voting form in case you can't attend the AGM. I received it yesterday in the post. I take it you've not received your yet then. Once you've read it, let me know your views please

Tud: I'm not on the register. All held in nominee accs so I doubt I will see the letter unless they post the contents on the website or I get someone to email it to me. I think they have done that in the past. I am considering attending AGM so will try to get it obviously.

Tud: I don't profess to fully understand all the jargon... but it looks like they simply want to delete a now irrelevant clause relating to whether the company can or cannot buy its own shares. I can see nothing of consequence there.

ML, dont they have to notify shareholders at the latest 21 days in advance of AGM? I'm not that up to speed these days with the regs and they change so often anyway....

Beau

Cheers BWD, likewise no fully conversant with the jargon, but was initially worried that this would mean the carpet could be pulled from beneath us & be left with nothing. Let's hope the directors aren't that conniving, considering how long some of us have waited for this to make significant progress, not that it has at present.

Correct Beau, 21 days is a requirement.

Well, good luck ML. I was planning a trip to visit the old man in Glamorgan over the AGM period, but work committments makes this difficult now. Was going to face all the serial rampers and change the tone of the meeting and challenge the all smiling Gilesey and his spin that has so often mesmerised the back slapping followers and almost always eluded full achievement as the sp testifies and as so many refuse to concede because its such a long term investment. I had a quick look in at the threads on the cess side and note that BWD, all present again after a long spell in the wildnerness, is lauding up the ironman on the quality of his thread. Not sure if I've ever laughed so much in all my life, I almost wet myself and it made me want to return. But alas, we move on, you know my email address, so drop me a line from time to time, I may give you a call after the AGM to get a feel of the levels of a*s licking at the AGM which will allow me to gauge the chance of all the usual empty promises happening this next 4 quarters and to see if it will at long last demonstrate to shareholders the status of producer, that has been lauded for yonks but has not quite happened yet.

I'll pop by occasionally to read the bollocks, have a good laugh, and will probably post over on iii as its the easiest password to remember.

Beau

Oil And Natural Gas In Paraguay
Sunday, July 19, 2009

Why Is There No Production?
Many people have asked the question; Why is there no oil or gas production in Paraguay? They reason that there should be as there is production of both in Bolivia immediately to the west and at Palmar Largo in Argentina, a few kilometers south of Paraguay. The reasons are a combination of technical and financial factors. The oil companies that conducted the exploration in years past did not continue with their exploration efforts because:
i) they did not satisfy the parameters of the geologic model of large producing wells which they were pursuing;
ii) they lacked the computer technology to interpret their exploration results as can be done today;
iii) they had other interests to pursue in the Gulf of Mexico, the North Slope in Alaska and the North Sea in Europe;
iv) the price of oil in the period 1971 mid 1973 was in the range of $2.00 - $3.00 per barrel rendering questionable economics;
v) there were no markets for gas which was trading for $0.15-0.25/mcf;
vi) there was limited infrastructure in the Chaco, and
vii) Paraguayan politics at that time were not encouraging for investment by foreign corporations.

Comparison to Bolivia & Argentina
Bolivia and Argentina both produce from the same geological formations as exist in Paraguay. For over 70 years Bolivia has produced oil and natural gas from the same geological formations that underlie the Paraguayan Chaco Basin. Oil is being produced in the Palmar Largo field of Argentina 3 km south of the border with Paraguay. Given the similar geological settings, and the fact that the bulk of the Paraguayan Chaco Basin is unexplored, the potential for large hydrocarbon reserves as exist in the neighboring countries would appear to be an excellent possibility.

History
The first exploration well drilled for oil in Paraguay was in 1947 and the latest in 2005. In the intervening 58 years an additional 47 wells were drilled by several international oil companies who carried out preliminary seismic and exploration drilling and two private Paraguayan companies. During that same period 12,085 km of 2-D seismic data acquisition was conducted. A recent survey acquired an additional 950km of 2-D data.

The Potential of Paraguay
The Chaco Basin is a large sedimentary basin located predominantly in northwestern Paraguay and southeastern Bolivia. The Paraguayan Chaco Basin(1) remains one of the worlds last minimally explored onshore hydrocarbon areas. Reprocessed seismic data since 2001, recent concepts in seismic stratigraphy and the analysis and interpretation of multiple data bases from several previous operators allowed for positive revisions to the geological model and hydrocarbon assessment of the Paraguayan Chaco Basin. The revisions confirmed that five important aspects which are indicators of potential commercial hydrocarbons are present in the Paraguayan Chaco Basin. They are:
i.) adequate hydrocarbon sources,;
ii.) reservoirs;
iii) seals;
iv) trapping mechanisms, and;
v) migration timing.

The recoverable potential in that area of the Paraguayan Chaco Basin located east of the current production in the Bolivian Chaco Basin2 has been estimated at more than 4 BBOE3 (billion barrels of oil equivalent). a consequent reduction in hard currency purchases from abroad. Additional refining capacity would be needed to meet the countrys need for products, provided any oil reserves discovered are large enough to produce oil and feed a new refinery for a sustained period of time. It will take time and considerable high risk expenditures to reach the point to justify the substantial added investment.

Several factors render the Paraguayan Chaco Basin attractive for hydrocarbon exploration and development. These include larger and growing markets for hydrocarbon products both domestic and for export to countries such as Brazil, Argentina, Chile and Uruguay, significantly increased oil and gas prices since the early 70s, improved infrastructure in the Chaco and decades of exploration success and production from the Bolivian Chaco Basin which is regionally down dip of the Paraguayan Chaco Basin and a positive change in the political climate. Additionally, new production techniques in the US Permian Basin, the Canadian Montney area in Alberta and British Columbia and elsewhere demonstrate that formations having similar properties to those found in the Paraguayan Chaco Basin are commercially viable. Paraguay also has a favorable hydrocarbon law wherein concessions are granted and guaranteed by Congress. Tax laws for investment by foreigners offer benefits conducive to the high risk nature of oil and natural gas exploration and development.

It is hoped that with drilling exploration wells for natural gas by any of the active exploration companies, commercial quantities of natural gas will be discovered to develop a natural gas industry. If such were to happen it could be possible to develop the gas fields and construct the pipelines needed to export gas to Argentina, Brazil, Chile and Uruguay as well as produce natural gas for domestic use and downstream products.

The Significance For Paraguay
The Hydrocarbon Law 779/95 is an excellent law to attract the substantial amounts of high risk foreign investment required to explore and if commercial reserves of oil and/or natural gas are discovered to develop these hydrocarbons and build a vibrant industry. It is important to encourage the foreign investors to continue to invest in the country.

Outlook
A number of external factors have come together at this time to provide many opportunities for growth for the fledging hydrocarbon industry in Paraguay. These include higher gas prices regionally coupled with increasing demand, particularly in Argentina, Brazil and Chile, all of which are planning to import LNG at world prices and at great capital costs.

In order to develop the industry many Paraguayan workers will be required. They will need training in various sectors of the industry such as drilling, building and maintaining production facilities and pipelines and gas transmission infrastructure. It will also be necessary to educate and train geologists, engineers, technicians, computer programmers, accountants and many specialists in the specific needs and skills of the oil and gas industry. This means long term and well paid jobs for workers as well as an increase in taxes and royalties for the government. Close cooperation and open dialog between the government and the industry can assure that the employment opportunities for those who choose to develop a career in this new frontier will be filled by Paraguayans.

Paraguay consumes the equivalent of ~30,000 barrels of oil per day as refined products such as gasoil, gasoline, lubricants, airplane fuel, etc., all of which are imported from abroad. It is hoped that with proposed drilling by CDS Energy in 2009 there will be success in finding oil in commercial quantities that can be produced for refining at the Petropar refinery at Villa Elisa, near Asuncion. This would result in a reduction of refined oil imports and

(1) That portion of the Chaco Basin located in Paraguay.
(2) That portion of the Chaco Basin located in Bolivia.
(3) Estimate made by Earth View Associates of Houston, TX and USGS reserves estimates from: U.S. Geological Survey World Petroleum Assessment 2000, copied from a public presentation with permission from the Vice Ministry of Mines and Energy of the Government of Paraguay.

This article has been prepared by Quincy Energy S.A., a Paraguayan oil & natural gas exploration company with properties in the Paraguayan Chaco Basin. For information contact info@quincyog.com

http://www.oilvoice.com/n/Oil_And_Natural_Gas_In_Paraguay/c0479550.aspx

i see that emerald energy have been very successfull over the past few years and are now rumoured to be subject of a cash offer. can anyone explain what JW did at EEN and if he contributed to there success? also why did he leave EEN?

I have heard that good things will be revealed at the forthcoming AGM on 5th August.

I hope you're right.