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.

Sharesure - I take your point entirely but as we both know the market does strange things and I have a number of holdings that looked good, once!

A lot of people seem to have agreed with me with over 3mill shares sold today against 800,000 buys, but the price rose slightly, exactly the opposite of what happened yesterday, so who knows what's going on. I will buy back if the price falls to 21/22 as I agree with you the potential is definitely there.

SS

Have to say I agree with you regarding a hold.
I have seen plenty of shares go from where we are to 2+, and if you keep selling half every time it doubles you will have lost out on a lot of money by the time it gets there albeit have made a nice profit. All to try and get an extra 10/20% of shares, plenty of people have tried to trade them the last 3 months and come unstuck unless your timing is perfect or you buy into another stock that has doubled, no easy thing to do.
One has to ask the question why are the inst's so keen to keep buying at these prices as they know what the potential is.

Harry6-there are rules and..knowing when to make exception to those rules, I am with SS all the way on this one, not long to wait now.

Evermore - I completely agree with SS about this one, but I can't help remembering how many times in the past I have not taken profits on what looked to be very strong situations, only to watch my profit and most of my investment disappear.

As is the case with RCG where I could have taken a great profit at over a quid but didn't and watched it fall to 18p, which, funnily enough, is where I reinvested and have seen a big rise there, up 18% this morning as I write.

Not clever, just a bit lucky and as I said, I will get back into Amer on any weakness.

And just to prove the uncertaintity and instability of the whole thing RCG announce they have no explanation as to the share price rise and back it goes to the opening. Durr.

harry6

it all depends how much confidence you have in JW, personally i have lots of confidence in him having spoken to him several times and thats why im not selling any at the moment.

Na - again, I completely agree with what you say, the fundamentals are definitely good and as you say, you have confidence. But there's a slight fall in the SP today with 2 1/2 mill sold and very few buys so I'm plainly not alone.

lse "glitches" and stop losses...
http://www.telegraph.co.uk/finance/markets/8329318/LSE-roll-out-dogged-by-teething-troubles.html

Harry Na a nd SS are correct in this instance. I am not a seller in fact I purchased more yesterday. Amer is a once in a lifetime chance to become free of debt. It has taken time as SS says and yes we have all felt the pain along the ride.
However having been to all the AGM's I agree that in Wardle we have a toop man and very well connected. Dont underestimate the importance of Victor V in all of this.

I eagerly await an ops update and final oip reports to the ANH by end March.

As na says too many brokers are putting their insti clients in to this for it to go tits up.

Rex H has an amazing track record of buying low and seeing his investments grow.
The fact that he is still in an still purchasing makes Amer a no brainer for me.

People are talking about a 2 share price.Most ridiculed this. Now SS says 4b market cap which is nearly 4 per share.

The stakes are rising. Stay on board!

OK, OK, back in...

Interesting predictions from SS and Yuff although I have no idea how these figures are arrived at. I guess we will have a clearer picture and can do some number crunching when the reserve figures are released next month.
I have something more modest in mind but it's enough to keep me holding.

There has been a lot of focus on the end of year estimate of 5k bopd from Platanillo but now that time has moved on since that was first published I'm wondering what the plans are for 2012. Maybe we'll get some inkling at the AGM.
Last year JW said that the current drill programme was just the start.

bwd, My calculations are simple - they need to be !!!! $40/barrel of oil in the ground (when oil was at $80/barrel and BP sold its reserves) times half the rumoured figure of 300m barrels of oil in its Colombia fields equals $6.0 billion. With close to 1 billion shares in issue that makes around $6/share or around 4/share. That may be wide of the mark either way - oil folk tend to be optimists who are most times shown to be just that, but are occasionally shown to have been conservative. Anyhow, whatever even with a smaller fraction of the rumoured amounts it still means that there is a lot of headroom for the sp if the company confirms a reasonable amount of recoverable reserves.

I always reckon that Paraguay should be thrown in for nothing since if it was easy as some previous directors had reckoned why is it that that country has no oil industry already?

SS - I see. Thanks.
If a comparison can be made with Rockhopper, then AMER would be worth 10 times its current market cap.
In October Panmure Gordon believed RKH reserves could be around 300mmbbl, similar to AMER, making their assets worth around 2.4b.
http://www.proactiveinvestors.co.uk/companies/news/22493/broker-roundup-rockhopper-desire-petroleum-cairn-energy-valiant-petroleum-22493.html
So either AMER is undervalued or RKH is overvalued. Maybe Panmure can have a look at AMER!
I'll play safe and stick with my (much more) conservative view of things for the time being. In any event, we still need JW to say what they've got and it looks like we will get the inevitable drift until he puts pen to paper.

Dave lots of buys yesterday so mm need stock from somewhere. So why not use current mid east troubles to your advantage and spook some weaker holders in to selling. Very small volumes today as well.

I'd like to think Mid East issues would work to our advantage but there you go... wdik!
Everyone getting thrashed.

bwd, Brent at $110 a barrel, perhaps not sustainable but it all helps-its nice to have a widening gross margin whilst you are (hopefuly) increasing oil production.

great rns... should move the sp north.,.

pigs might fly

so it seems i'll go back in my shell.,.

Company's like this aren't gonna be moving up in this present climate of unknowns in Libya, Egypt, etc. Just sit and wait..