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.

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.

I think that they are being very cautious with what they spend their cash on and their view of the oil price. My view is that once OPEC consider that they have killed off sources of exploration funds for non-conventional oil then they will engineer a higher oil price to recoup revenue lost during this price war. After that, any suspicion of confidence returning to the unconventional oil plays will be quickly snuffed out by another rapid oil price reduction, this being repeated until they have killed off permanently any availability of exploration funds for oil shale plays.

Anyone any idea why the share price has fallen 27% today please?

I think it's all pretty much in the following release today:

StockMarketWire.com
Amerisur Resources has described a new independent evaluation of reserves at Platanillo as 'conservative'.

The report by Petrotech Engineering Ltd, using the standards set by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers, certified 1P (proven) gross field reserves of 16.2 million barrels of oil (2013: 19.8 MMBO) after production of 2.278 MMBO during 2014 and 2P (proven and probable) gross field reserves were 24.55 MMBO (2013: 32.8 MMBO).

The company says: "Production during 2014 was 2.278 MMBO; hence current 1P reserves represent an effective 6% reduction from year end 2013. This technical reduction of the Expected Ultimate Recovery ("EUR") (a forward looking model which assumes a decline factor and projects the volume of oil which will ultimately be recovered) for current producing wells and for all future planned wells is a conservative view based upon several factors, including the relatively poor initial production result of wells Platanillo-15 and Platanillo-16, which served to reset the future average expected initial production rates.

"Additionally, the shut-ins of producing wells due to social and export issues during the year resulted in lower average production rates which also caused an increase in the future projected decline rate, resulting in lower overall volumes being recovered in the model through time. Reserves have also been impacted by the Board's responsible decision to reduce drilling activity in order to ensure capex at Amerisur is matched by cash flows in the current lower oil price environment, since some planned wells will not be delivered within the previous timeframe."

Chief executive John Wardle said: "The Board considers the independent evaluation of the reserves in Platanillo to be a conservative view, which we believe would improve once the field can be brought to its full production potential. Additionally, the SCAL analysis, including definitive porosity and permeability measurement of the core samples from Platanillo-20 and the eventual commercial production from the T and N sands, plus our future drilling in the northern structures of Platanillo will have a positive impact on reserves next year."