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.

Tabby

i thought you were always on the piste . The restaurant was opened last July , the mango ice creme is very nice.

TFC -
In fairness to JW, he was VP/CEO of Peberco before joining AMER. As you probably know, the Cubans asked him to find oil which he did in significant quantities - and both sides have been handsomely rewarded. I suspect if anyone suggested he reliquish his interest, he would tell them in blunt Yorkshire tones where to get off.

(Is he still involved with Cuba? I thought that relationship had ended but am happy to be corrected).

In any event, he lives in Bogota and, in my opinion, has an intimate knowledge of what's going on with AMER operations in Colombia. I'm not suggesting he has his boots and overalls on every day but I doubt there's much, if anything, which escapes his attention. We are lucky to have him charge.

If he is rubbish at anything, it's his RNSs. They are infrequent and when they do appear, they can be as dull as dishwater. I'm sure that if the market had a fuller picture of what was going on, we would not be floundering around at this level. Unfortunately, I've lost count of the number of times I've said that before but my judgement on where AMER is headed remains unchanged.

Can i ask a big favour... interesting read but bl**dy difficult on a small laptop, as I have to scroll a long way off screen to read end of sentence then back again. Would be so much easier just to scroll down. BB

BWD-its the nomads who write the RNS with input from Nick and John.

Feel free to make contact TFC-discretion is assured.

Yuff - JW has to tell them what's going on in the first place! The announcements are approved and issued in his name. Either way, the AGM RNS was positively anorexic (compared to what we learned in Cardiff during the meeting) - and the market reacted accordingly.
From our point of view, the time and expense involved in having an RBC analyst in Colombia for weeks on end has been wasted. Where is his note? Good grief, what are they waiting for?

bigwavedave, FYG formation damage is most of the time reversable, for example 50% of all N.American wells required some form of fracing (i.e reservoir stimulation).

The most likely out-come would be a LTT on a impaired flow rate, there is also in my view a small possibility of a extreme out-come, either a favourable "whoosh" effect or the formation damage being irreversible.

In this case, although the remedial work is costly, time is on our side, the drilling fluids should eventually disappate, the mud should contract allowing for greater permeability and pore volume for the oil to flow.

Good luck all.

Cheers Evermore for your input- errudite and succinct as always . dare i say it ; but something positive is going on / someone knows something ......... dearth of buys of late in recent trading has been replaced by a sudden influx of buyers ,and by what can only be called chunky buys - one of 100k+ - and going through @ 14p ......

" J" when your back in the uk i will be happy to meet up for lunch , would a sunday suit as i go up to london once a month on that day ?

E,

Or presumably they can just drill another well into the same formation?

That's what i was thinking

but surely while there is the possibility that matrix/ hydraulic fracing could proove successful - and most do - whoooooooosh ;-)) Perhaps lggy has gone Pop .....( awful pun /jest -apologies ) then why drill an expensive new well now if remedial work can rectify and prevent propogation of cracks in hosting rock at lggy 1 caused by original mudweight .

Evermore, thanks. I took a geologist's advice when Iguasa problems were first reported and was told that it was nothing to worry about. I didn't anticipate it would take this long though! At the agm JW talked about intermittent flows; it needed "stirring up" from time to time and then allowed to settle down again. He said that "even the worst behaved child can turn out to be the best."

Blackdown: yes, that is an option. If remedial work is not successful or becomes too costly, that's what they said they can/will do.

Lets face it BWD ,,,,lggy with its 300 feet of hydrocarbon saturation has the potential to be what the sealion discovery is to RKH ..........

you wish!

ITS All relative surely ; and of course i wish or i wouldnt have ferkin said it to start with .And do tell- How much oil / revenues is RKH PRODUCING !? ORGANIC CYCLE FROM DISCOVERY TO ACTUAL PRODUCTION IS SEVERAL YEARS and whose to say RKH will still be around then as big oil has a tendancy to muscle in

TFC RKH hasn't to do much to produce more than 550bopd.

Halifax

No your absolutely right it hasn't got to do much to produce 600bopd but it hasn't got hope in he'll of doing that within the next 18 months whereas amer have a similar net pay zones in iguasa on land and costing about $16bopd to get out, if worst comes to the worst it can drill another well next door for $4.5m rkh can't say the same.

na how much will it cost to drill another well to produce 550bopd?

considering rkh could be bought for 40p as recently as May 2010 ,one could not be blamed for thinking that they , like their buddies at DES , were expected to find nowt .....hindsight a great thing.....but should lggy deliver what many quaters anticipate then its s/p will go crazy ...as i said its all relative.....a land based strike with potentially 300 feet of the sweetest low sulphur 36 o oil is not something to scoff at ........