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.

The thing is why wait for the share price to recover when there are so many other investment's to put your money in with a better chance of success within a shorter time frame.

Such as?

TFC thanks.

How sure are you about your comment below??
This is very important.

They then excaserbated their lack of due dilligence with a 15 kilopascal mudweight which i initially presumed to be due to the tremendous specific gravity pressure in the well bore to which they reffered to in a later RNS addressing damage to the well. And now it turns out it was to keep the well from utterly collapsing . Yet rather than come clean they chose to play for time and keep everyone - except insts-in the dark .

Blackdown

For me it was PAL and BEM

Tfc
Jw's comment at agm"iguasa had greater pressure than macondo well in gulf of Mexico"

Someone made the interesting observation on another board that Amer " can only produce what they can handle" ie. storage capacity (which is being expanded as we speak) is limited, and there may be logistical constraints on the amounts that can be transported by tanker. Would it be reasonable to conclude that flow rates therefore are purposely being restricted at present at Plat. in line with storage capacity ?

Also, I think it would have been only possible to analyse the permeability problem after the formation damage had been cleared up.
The puzzle is why there was no problem in the first place with permeability when the pressure at TD was off the scale.
Pressure and permeability are closely linked.
I wonder if they had a experienced Mud engineer or Drilling Fluids Technician 24 hours on site with Iggy, althought the high Skin Factor was cleaned up I cant help but be concerned that the remedial action has in some way inadvertently made things worse, as the oil production seemed to drop off as Iggy was being worked on, I have read about "stranded oil" problems with oil in place but dont know if that issue applies here?
Even if the reservoir is tightly compacted, leading to low permeability, this may vary greatly within a field, so a few hundred feet away you could have a great producing zone if the type of reservoir rock changed.

Yuff ...Either that or they overeamed the well ... after Amerisur announced via RNS postponement of drilling at lggy, Astaire quickly issued a reassuring note on April 10th saying " the reason for suspension of testing was the neccassary use of a mudweight which led to formation damage ( effecting wellbore permeability ) ........" But why did they use a 15 kiliopascal m/w when the API lays down in its code that 7.5 is the norm and 10 the maximum .....lggy could have a real gem of a well -..but reading between the lines and now knowing the highly dangerous hydrostatic pressure, (specifiv gravity) in the wellbore it would seem the instruction was given to use the mudweight whose weight ( amongst other things ) protects the casing and open hole be used to trap the gas at all costs even at the expense of damaging the integrity of the well characteristics. .With pressure in the wellbore off the guage was lggy a potential blowout scenario ?? ...lt has all the hallmarks..l think Weatherfords and Sclumberger initial remit was to make the well SAFE above all other variables such as establishing production -..but from whatever vantage point you look at lggy the company itself kept people believing what with a little tinkering all would turn out okay...................lncidentally if you believe in the concept of actualism in that the past and present provide the key to the future you will see that ALL the big oil /gas fields in Columbia are to be found in the North with its numerous 6,000 to 30,000 bbloe strikes and NOT the in the south which is well known for its average strike of a mere 600 to 800 bbloe p/d wells ...Evermore -... i fully concur with your saying more wells being sunk on Fenix block - during early North sea " drilling BP only missed the enormous isolated "Beryl" field by less than 500 metres .it was only its second drilling that revealed the mega billion bbloe oil find .....Fenix definately has the potential geology for the truly big finds ....,,,,,,,,,,,,,,,,,,,,,,,,,,,,.interestingly, however both RBC and Astaire desk notes accord COS at Fenix at 10% and Nil value yet give two of the plat drills a 100% COS with a TP of 29p.... ....

TFC, thank you for your post.

Reservoir permeability within a field can vary enormously, and I think I read that Frontera would be examining surface geology in and around Iggy so maybe another well is possible financed by surplus free cash flow from Plat 3 and Plat 4 late in 2011.
Poor permeability in one area of the field does not mean the entire field.

I suspect the COS would have to be high for another Fenix drill, 50% plus and include new geological data so far unknown to avoid another $5m Iggy 1 disappointment.

Are most of those sell trades at 13.50 buy's ?

Frankly : I don't know why you lot bother with the south american oilies...apart from EEN,...I have never been able to make a profit...much better elsewhere....(FI stocks apart)....

RF

You have just been unlucky ..... try West Africa , afren , Cove and DPL

In AFR and COV....

Just sold all mine @11.50 for a 28% lost , but had been banking profit up to around 18 to 19. put most of the proceeds into Afren and Cove.

Ald,

I don't blame you at all. I am thinking the same thing after 6 long years...

You know what's going to happen now , a RNS that will see these rocket

There is always that chance, maybe I'll keep a few just in case.

I wouldn't hold your breath!

I would-this share still has an awful lot to offer-what with a planned back to back drill programme in Q1 at Plat.

If Iggy cannot be resolved a new Iggy 2 will be drilled alongside once Fronterra release their findings.

Yuff - re the Fronterra report: I got the impression from the rns that it won't be until next year but I guess from what you say that something is due before then...?