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.

Here here (or is it hear hear!) to all you say. Trading today also confuses me as buys are equalling sells although SP is nearly 12% down I am climbing back on my yacht until it blows over and sitting on my hands - no sell out for me. This stock is still a good bet.

AMER's descent mirroring a lot of AIM oilers. Shame about the drop but this is one of the better ones of it's sort, no debt, profit producing and fully funded for more exploration. If you believe that the markets tend to over-react to bad news, then this really is a bargain.

PPC's announcement this morning re Paraguay supports Amerisur's optimism about the country's oil prospects.
As for the prospects on Amerisur's acreage, one of the original Amerisur directors commented when they first acquired their leases that in his view Amerisur had secured 80% of Paraguay's most prospective hydrocarbon areas. He was also right on Platinillo, and before that on the North Sea's prospects for his previous employer at a time when no one had found any oil there at all.
Looks good for when Amerisur eventually drill - but when is that?

Thanks for up date - I so wish I could stop reading the Beano and Dandy.

Tried to delete but no joy

Nice bit of joy his morning though |

I would really like someone from the company to tell us where the chairman's great contacts in South America are; waiting to 2 years for an Environmental Licence suggests the Board has no clout at all when it comes to dealing with the Colombian government. No wonder the sp is getting trashed disproportionately more than other oilers.

Knocking a hole in the grandchildrens Christmas present fund! Now on separate "to buy" watch list.

Approx £2m of shares sold knocks £50m off company value!!

Are we now ripe for a take-over bid ?

Hope not. Possibly unlikely anyway until a few issues are settled. In the medium term I would have thought the Middle East is more likely to get increasingly turbulent and oil production from there may get disrupted. That would suggest oil will go higher at some point although timing that move accurately is impossible. Best to sit tight and wait in my view.

With the price of oil weakening over recent weeks the cost of getting it out of the ground will weigh on some companies more than others, does anyone know how much it costs AMER per barrel?
2517

It would be nice to see some positive reaction to RBC note.

Grateful you explain

Https://www.rbcinsight.com/CM/Share/ResearchViewer/?SSS_DB4B7987DEFA2723307443C7C8990F1E

Thanks - looks like someone took a quick glance at the RBC today !

Finally got back in again this afternoon.
2517

Only 9.0 am and my head is spinning - what a start to the day 18% down to 7% up in 45 minutes.

When I saw the drop first thing this morning I thought, impeccable timing again george, having read the rns it makes sense to do what AMER is doing.
2517

I do agree but I had to wait until I was less dizzy to read it in full.