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.

We still need the Platinillo resumption of production and flow rates - that must be available soon?

My layman's summary of today's announcement.
* JW is talking about 17 sands in total: nine in the lower levels, eight in the upper.
* These offer around 350ft of sands in total.
* Some oil has already flowed to the surface under natural pressure.
* the Rio Cachira prospect maybe be overlapping La Tigra - so they could be getting two for the price of one.

If I've got this wrong please say.

BWD Don't they need to drill the spill point to prove that or is that what they have already done in order to make the comments they have made today? Surprised there isn't a bigger rally on this RNS.

/

Sharesure,thanks again,i always hoped this would come good,its been one hell of a wait.

Capetown, Agreed, it has taken a very long time to get to this position. Primavera set the company back nearly 3 years.From now on it should just be a matter of letting the reserves calculations and then production march the sp up over the next 3-6 months. I won't be selling for some time yet, particularly if M&A activity also gets going on some of the smaller cos in this sector.

Interesting post there ML! Am I correct about the number of intervals? I have re-read the RNS and still not 100 per cent sure. Maybe we should say lat least nine (or multiple?) Either way, a huge improvement on three which was the original estimate before La Tigra was spudded (and would have been good anyway).

Sharesure: I can't answer your question, I'm afraid. I'm not up to speed on the technicalities. But I look forward to whatever they say next in this respect. I am delighted with the progress they have made. I may not be able to completely understand the full implications of today's announcement but it is certainly impressive.

PS: The Guardian does a quick follow-up on its brief mention on Tuesday: "Amerisur Resources rose 1.125p to 10.75p after a positive update on its operations in Colombia."

Nice little mention in today's Times.

Have not seen The Times but The FT still keeping a keen eye on progress. From today's paper:

"Amerisur , which is chaired by Giles Clarke of the England & Wales Cricket Board, added 11.7 per cent to 10p on the back of a positive drilling update from its Iguasa-1 well in Colombia.

"Amerisur's 100 per cent interest in Iguasa-1 provides maximum leverage to drilling success and results from the well have been highly encouraging,"said Astaire Securities."

BWD, I thought you were wrong at first so I rang my man!
He said its 17 but either way its 355 ft of potential
Hydrocarbons!!
Now in my book thats one helluva lot of Oil, how much will
prove to be ecnomic to produce remains to be seen.
I am hearing whispers of "multiples " of original expectatuions,
now they were 6-30mmbo, put your own answer in there!!!!!

M

I enjoy monitoring and having the occasional punt on The Times "Tidler to watch"

Guess what it is to-day - You got it Amerisur !!! And we won the cricket series !!

Thanks ML. You cannot beat a phone call, even in this electronic age.
I am very happy, whatever the figure.
I have been guilty of over-enthusiasm in the past but the picture is a lot clearer now. This is a first class result, by anyone's standards.

8m sell, is this one of the previous team?

No - its an 8 m buy from last week

SS,

Maybe time to update the header?

B/D will do; I would have liked some production figures and reserve figures to make the update more useful to new comers. Time we had that for Platinillo.

Agreed

expect we will get an update before Xmas

Not much I get right these days but happy with my actions on this!

Been holding/watching for 2/3 years at 11p when Chaco and seen my investment plummet. The continual push-up in the sp over the past months gave me the opportunity to get my investment back over the last few days. The MM's have tried to make it look that this is going to keep rising but any analysis of the chart says all the good news is priced in and the sp is heading southwards.

Good luck to those that hold but I'm more than glad to be out for now and shall reassess when market conditions for these tiddler AIM stocks improve.