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.)

b>



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.

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..

t,

I am sure you are right but that's a bit tough on AMER, which operates in a completely different political and economic environment.

I know, but they all seem to get tarred with the same brush wherever they're based sadly

Tudwick

More importantly amer won't move up until rbc have got some cheap shares for their Canadian clients!!!!!
1-1.5p spread most of the day when we normally have a 0.25p spread.
Looks like they are very happy to buy the shares but not so keen to sell them!!!!!
Previously rbc had been very happy to keep on taking shares not thu/fri any sells dropped the price after initial rise on the upbeat rns, big question is how many nervous holders are out there pre drilling!!!!!!

Typical sods law with this company, in that it's taken what seems like ages to finally start achieving their aims, albeit slowly, then we have numerous upheavals in other oil producing countries that immediately puts a dampner on our news.....

I agree, the spread was a much larger margin than usual.

I'm quite happy to just keep holding and see how it goes.... been in far too long to do otherwise.

tudwick

whilst agreeing with you the rns was put out on a poor day in the markets, i assume JW had been booked for presentation in Canada for a while so they had no choice but to release it.
However recent turbulence only increases Amer's cashflow with the rise in oil, so if/when this upheaval sorts itself out then amer will return to a higher valuation.

Totally agree, as the saying goes, `timing's everything' and on this particular occasion, it was timed extremely badly

AMER

Why another 5% down today?

Any insight appreciated.

Thanks

tomps

my thoughts are rbc would like more shares for their clients following recent presentation in canada last week and as they have been doing all the buying recently they have taken their foot off the gas to enable them to get those shares cheaper at the moment, once they have got a few shares they will sell those shares on to their clients at higher prices.
those are my views on current sp action, spread is normally 0.25 or has been for last 4 months since rns it has widened to generally a 1p which completely deters trading but if youve got to sell you havent got a choice

Thanks na sdaq

I have no need to sell, but bought at recent top, and nursing a 16% loss so far. Just wanted to keep a tab on what's going on, and whether riding the loss is worth it.

Any view to a target or stop on this?

Much appreciated

tomps

i wont be selling before they have completed this years drilling programme which if successful will see the sp at multiples of todays price providing oil stays around $70-80pb

tomps2-I agree with na.

Whatever you do hold on to these shares. many people have 10 bagged them even at this price.

Far far more to come.

You just have to have patience with this one.