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.

Hi guys


My take on the situation is positive, although they are further
behind the curve than I thought. As for Fenix and Iguasa in particular
the well has been cleaned up and will perform in due course. At the moment its on a restricted choke and oil production is erratic but nevertheless it is producing
circa 100bopd. This will improve as time goes on, but no targets are really in place as it will take time to complete its testing. Isabella is now in LTT and has had a problem with a failed pump which has now been replaced and production
is again being wound up from its current 150bopd or so.

I think its accurate to say that Alea/Plat has emerged as a cash cow.
The extra acerage, 1000 hectacres, to the Ecuador border has been granted and 3d seismic
is about to start in the next few days. This will enable the Co to pinpoint the next drills this year and their target is 2 this year at 1000bopd from each. I did suggest to JW that he drills at a 45 deg deviation into Ecuador, this got some laughter from the floor, but as he said "its everyman for himself" there and that will more than liekly be done!
The first 4 new wells in Plat will achieve 1000bopd each and the subsequent ones circa 500 bopd as the fiels is exploited. A total of circa 38 Wells will be frilled in the Puntomayo basin/field by ourselves, this could well give a SP of around 60p with a PE of 10.

Reserves of P1, P2 and P3 will be submitted by an independant to ANH by next March, this figure will be confidential for the time being but will be in line with our production of 5000bopd from Alea by end of 2011. Capex will be around $80mil for Alea over 18 Months and will be funded from current capital and production. With net revenues of $60 a barrel the company funding is assured.

As an asside the VHR field in Ecuador is located in a level of sands just 10 feet thick. These same sands on our side of the border is some 20 feet thick so the potential here is bodering on enormous.

All in all I am pleased and will be looking to add to my position as and when funds become available. Our Broker has been over there for the last 2 weeks and a note will follow shortly.

M

Moneylender

Did you go to the AGM ? TFC said he would be there to grill Giles Clarke but he as been missing from this thread for about 3 weeks now [ he has a slight french accent i should imagine ]

Aldwick, I was there for drinks last night with the board until 1.30am and again at AGM
today. I cannot be certain as I dont know TFC but i do not think he attended, he certainly did not grill anyone! This year was well attended prob around 50 people there, some were obviously old aquaintences that I have met and some new investors, all in all
a good turn out.

Moneylender

ok , thanks

http://www.amerisurresources.com/Amerisur_AGM_Presentation_040810.pdf

M/L Thank you for the update. Did GC explain why the target of 6500 b/d by 3rd qtr 2011 given at the presentation to Brokers at the time of the last Placing had been scaled back and moved out a qtr or two?

I agree that the message is still good although hearing more confirmed news on total potential reserves would have been helpful. Brokers seem to have been given that some time ago.

http://www.amerisurresources.com/Amerisur_AGM_Presentation_040810.pdf

from iii bb

Date/Time Subject Author VotesAll1+2+3+4+5+10+20+
15:41 AGM Report & Interpretation Kelly





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It was good to meet old friends and make some new ones at the AGM today. I'm just sorry that you all could not attend and listen for yourselves, ask questions and form your opinions.

ML has given a good summary and I'll just add a few points:
- two senior technical managers are being recruited to manage Planatillo and Fenix in order to cope with growth and speed things up
- the two existing Planatillo wells should produce 700 bopd after chemical treatments have worked

Over all, I was disappointed with the press release and with the situation with Iguasa 1. But on reflection, I think we all know that not all actions in business work out perfectly first time. I now understand better the complexity of the well and what why management were concerned to contain the pressures within it, which were described as being similar to the pressures in the BP well. Once the well settles down management has further treatments planned, if necessary.

Turning to Planatillo, you all know I like to use figures to get some hold on what the potential might be.

ML repeated management's comment that 38 wells could be drilled on Planatillo. Management said each well would represent 2.5m to 3m bls of recoverable oil resource. What does all this mean in terms of value?

38 wells, with a recoverable oil resource of 2.5m bls (the conservative, lower end) amounts to 95 million bls. A figure mentioned by management.

If the buyers of BP's assets in Colombia were to buy Planatillo (once a reserve statement has been prepared by independent experts following further new wells) then what would they pay?

Applying the price that BP got for its oil in the ground of $32 (let's be conservative and say $30), this gives a valuation for Planatillo of $2850 million (95 m bls times 30) or (at the $ exchange rate of 1.59) 1792 million.

With 830m shares in issue, let's be conservative and say 850m, this gives a value per share of Planatillo alone of 210p per share.

Even if only a price of $15 per barrel were achieved it gives a value per share of 105p.

Will someone please check this? !!!

Before the critics kick-in, please note that none of the above figures are mine, except that I have conservatively reduced public domain figures.

KJ
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SS, I think Alea was always 5000bopd, but I agree it has slipped a quarter or so!

M/L So in your view is Fenix in addition to that 5,000 b/d, assuming that they can suceessfully sort out the mud issues (which looks likely)

SS, page 8 of todays presentation is only referring to Plat. Also
page 11 the blue sector is Plat with Fenix (grey) tagged ontop
of bar chart a conservative 500 bopd.

The chart doesn't really update fenix until end 2011 as they are not sure on flow rates from either well due to recent problems, once they are both on ltt I'm surevthey will update it but currently only allowing approx 500 bopd

I'm guessing the City didn't like what it heard yesterday.............

AGM statement less than exciting, 500 bopd peanuts, future potential uncertain.

Short term the disappointment on Iguasa 1 needs to be corrected, by higher BOPD, 1000 BOPD in total for example is a number i think the market would like, and a regular not irregular flow, for some confidence in the share price to be restored.
Aim stocks are RNS driven and have to surprise on the upside to keep moving forward.
This is not easy as the Oil business is full of pitfalls as well as potential rewards-that is why the big money is made in the long term.
Plenty to go for but this is the reality short term.

I don't know, on track for 5000 bopd seems fairly confident in the rns

I don't mean to detract from the bullish long term story but could someone explain why the well head pressure was off the scale at Total Depth, like the Gulf of Mexico level at Iguasa 1 yet at the same time, due to high formation damage, i.e mud in the rock pores, and a high skin factor, we could not get the oil to flow naturally, how can we have both events occouring at the same time?

The oil did flow naturally intitially, but they then did (without meaning to) what BP are now doing, i.e - a heavy mud 'kill'.

Bit of a cock up, no doubt about that, but at least they're managing to fix it without a multibillion dollar clearup.

Evermore

To prevent an explosion from the pressure they used heavier mud to contain the pressure.
This mud is what has taken 6 months to clean up and with all the various chemicals used is impairing the flow rates currently but it is improving daily as the pressure is bringing the sludge to the surface along with the oil

The mud came first as I understand it from the RNS, it's drilling mud containing Barite, which had affected the porosity of the rock, and was needed to drill to a total depth of 6,000 ft-so where has all this exponential pressure gone?