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.

This looks to be coming together at last. Key comment I think is the reference to increasing the Platinillo block still further. That was rumoured some while ago but I suspect that that had been put on the back burner pending getting Ecopetrel's 40% agreed first. Maybe the market (and me!) might start giving this mgt more credit for being shrewd!

All credit to John W. Worked a real blinder here. Like the bit from GC about improved cash flow-very important in these times. Also believe future oil flow = greater revenues and eventually more drilling rigs being placed. Paraguay to look forward to. By the time we spud early October we may well be in to double figures

Taken from another thread yesterday. With thanks to the author. I'm sure he won't mind me reproducing it here. Interesting stuff.

"By way of introduction I have posted news from AGMs in a positive fashion. The appraisal 2008 AGM could be summarised by saying that most of the planned action would be happening in Q2 2009 but it was worth holding. As we know Q2 2009 became Q3 2009 but, with the exception of Plat 3 it is now happening.

Positive AGM posters have come in for some criticism for having rosy eyed spectacles or being short term rampers. I have been in this since 1998 and no I didnt sell at 17p either. AMER is my biggest holding so Im in for real. I appreciate Beaus posts and there is clarity in the facts as he sees them. Nevertheless I have previously said I see value and that remains my view.

I think the strategy of gaining 100% of Alea is likely to prove to be an impressive negotiation. The AGM statement included We have established up to 900,000 bbl of recoverable reserves from the two existing wells within the lower U sand only. I think the recoverable reserves will turn out to be a lot more due robust well management now that Ecopetrol are out of it, due to the Upper Sands (which have been off the radar but are believed to be oil bearing), and due to production from the other Alea well that may not be just a home for unwanted water.

I would like to think that Plat 3, which is near the access road, will be progressed now that Ecopetrol are off the scene as well.

Turning to Fenix, I discussed with Doug Ellenor what oil might be produced from Fenix if the drill did not hit the trapped reservoir that was the main target. The well that was drilled straight down many years ago produced oil from about 3 levels, I believe, without hitting the reserve that is now being targeted. I am not a technically able, and these are my words rather than Doug Ellenors, however even if the drilling does not hit the main target it may produce enough to cover the cost of drilling by releasing oil from lesser areas found on the way down and therefore reduce the risk of Fenix.

As has been said by others, including the directors, Paraguay has major potential. At the AGM it was clear that the knowledge of the structures had moved on in a big way. To sell before this is joint ventured is not in my plans.

I dont think it is a matter of, Is it worth 6p, 7p 9p, 12p? There must be a price at which it would be wise to reduce a holding prior to the results of Fenix being known but for me it isnt anywhere around a single digit price. I increased my holding by 20% after the AGM so these are genuinely held views.

Best regards to all the regular posters.

Xscream179"

back up quickly after pullback. Unusual

blanchAMER always surprises-was not expecting this after yesterday but then again was not expecting yesterdys fall on the news flow to come-especially spudding of fenix.

Good to see amer holding on to its recent gains and small tick back up from 5.25 back to 5.75,and a nice 800k buy for a little confidence.

Any of you guys in PELE (Petrolatina)? Just looking at other companies active in Colombia.
They will be producing around 5,000bpd in the near future and are valued at 50% less than AMER after their recent discovery.

Interesting company. Six wells drilled this year all six wells successful with more planned for 2009 and into 2010.
Waiting on report that confirms significant upgrades in production and proven reserves.

Worth reading their last two RNS's.

I'll drink to that.

Moving back up nicely now with spudding news due on Fenix block. Also, Platanillo enviro licence paperwork being processed prior to production go-ahead a bit further down the line.

Bwd,

The env licence seems to be taking a long time, given that it was reported at the AGM that it was due imminently.

Yes, bd. Fully agree. But I believe it is not a straigtforward case of rubber-stamping, much as we would like that. JW's most recent prediction of "production before year end" is more realistic but if he can get the nod before then, all the better (obviously).

Let's put it this way: he's paid the fee.

I thought that the Fenix drill was due to start on 1/10? It seems odd that we haven't heard anything, given that we are now some way past this date.

It was hoped to start this around 20/9; The depth around there would suggest a drill time of around 10 days, followed by analsis which the company said would mean results from it would be due towards the end of October. I don't think that the Board would need to say what has happened in the interim unless they had hit a delay or a problem. So really from the end of next week an update could be expected.

Has anyone on this thread got an up to date analysis of oil companies showing their market capitalisation, number of shares in issue, proven reserves and barrels/day production? That could be a useful rough guide to what the sp may do here, particularly since any oil is on land, at a shallower depth than is true for many modern fields and the politics of the area are relatively more stable than in other countries.

Plus the oil is light rather than heavy?

SS, BD - I believe they said the ground work would be completed by Sept 20 but spudding was not expected to start until the first week of October. Would take circa 30 days to reach td.
If it has started I would have liked to have seen an RNS to confirm. But, as you suggest, they probably do not see the need as it has been flagged up once already.
They are using technology which will provide instant results so we might get news of early oil shows as the drilling progresses. One can hope, anyway.
Meanwhile, I'm not anticipating any problems with the Platanillo production licence but we may still have to wait a while for the green light from the officials.

Ooh, a little rise and just when we had all dozed off.

Rip Van Winkle would have time for a nap waiting for this :-)

Wake up Rip, drilling has started.

Hope they keep the noise down wouldn't want the nap disturbed until they hit oil!