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.

I would suggest that the current share price does not take into account that AMER is already producing oil which is being exported.

This is not oil that is potentially there. It is coming out of the ground now and being exported now.

The market does not yet know at what rate this oil is flowing, or what the 3 areas - Alea, Platinillo 1 and Platinillo 2 - contains.

Fenix, which is owned 100% by AMER, has oil seeping out of the ground, and if rumour is correct, the locals are enjoying the proceeds of over 100 barrels per day.

Again, this is not oil that is potentially there, it is known to be there.

AMER owns vast areas of Paraguay, an area that is attracting considerable interest, and totally discounted as far as the share price goes.

A couple of days ago TRP (Tower Resources) announced an estimated find of 10 Billion barrels of oil, a massive amount , but estimated, not confirmed.

The share price tripled with the announcement even though production is probably a long way off.

If the long awaited announcement at AMER is as good as we hope then the market will surely send the share price significantly north.

I agree with Stewart, and think something in the region of 18p should be achievable fairly quickly.

mabel

mabel - thanks for your comments. Can you remind me how we know AMER are already producing. When do you imagine we will get to know how much? TIA.

stockdog,

Taken from the Interim Results dated 13.12.07

'The re entry of the Alea 1 well has been successful.
Oil produced is being delivered to the Santana terminal, operated by Gran Tierra Energy Colombia for export.'

I would guess that we will get to know how much on or shortly before the Prelims, which I believe have been pencilled in for 12th June.

mabel

Mabel - many thanks.

Stewart / Mabel

I thank you for your comments.

I have to say that Fenix is an unknown and is treated as such in the City.It has not had an Amer drill bit put in to the ground yet and that is why they are not including Fenix in their valuations,rightly or wrongly.

They have seen the recent plugging of dry wells that Amer had chosen to drill.
Fenix is no different and will have to have subsatntial 3D seismic to ensure that another duster is not a probability.

News is long overdue but there is an awful lot of optimism surrounding the expected RNS.

Volume is the key and one must not lose sight of this.

sivad,

I appreciate your reply perhaps I could add a few comments

Regarding Fenix, I would agree we have not drilled there yet however the comments of oil seeping out of the ground must be positive, I agree even drilling does not guarantee they will hit a reservoir however we own 100% of it and the 3D seismic has been completed I think in December 2007 according to the December RNS, they were due to complete interpretation by the end of the first quarter so they are late in reporting, the RNS was very positive cannot remember exact wording but something like very encouraging.

I assume the recent plugging of wells you refer to is the debacle of Primavera, that is a year ago and whilst I agree that does not help when you have 2 dusters, we now have a new board and different people at the top running it, O & G companies hit dusters you ain't going to get them all correct, Platanillo was a hit there is the counterbalance.

I understood the 3D seismic has been done at Fenix so a little unsure of your comments, see my earlier paragraph.

I am optomistic and it looks very good prior to news and I agree volume must remain high to continue the momentum and most importantly we need that positive RNS soon.

DYOR, IMHO.

Stewart-thankyou

Yes Fenix has been subject to 3D-my point was SUBSTANTIAL 3D needs to be performed unlike the 2D debacle at Primavera which cost a lot of people a lot of money and went some way to being the root cause of where the current share price languishes.

As I have mentioned before my contacts remain upbeat and bullish about the short term prospects of this stock.

SIVAD,
Looks like we may have that 3p increase before news?

mmmmmm bit disappointing, lots of selling today,erased yesterdays gains.
2517

Its all those naughty people taking profits - oh to show the patience that we have (trying to reach a point of breakeven!)

Can't blame them for that, serves us right for having our profit taking price at a higher level eh! Or put another way we should have bought them cheaper than we did.
2517

Posted across the way by Valentine who has done an enormous amount of research into Amer/chaco.


Getting back to solid earth. I won't be posting my holiday snaps here btw. This is worse than horses!

There is a 1yr rule in Colombia for those wishing to attain operator status in a said field. You must have the wherewithal deposited in an account 1yr prior to the grant of status. The date of the placing @ 6p, I am informed, was May 24th 2007. How can I forget eh, andre? How can I forget eh!!????
The next meeting of ANH, according to scribes herewith, is next Thurs 29th May.
To gain operator status you require 55% of the field. Repsol have 35% and we have 25%. 25+35 = 60% minus 5% royalty for Repsol, and nominal payment of maybe $2m, leaves us with, you've guessed it, 55% of Alea.
Gold are going through the same process, exactly, to buy out an 'inactive' partner in their Azar block down the road from us; Rig(Pride-17) supplied by GT. Cost to GOO now $4m, due to recent rise in price of oil. We got ours for maybe $2m plus %..We and 2-3 other currently small 'operators' are ahead of the game in Colombia. We are leaders of the pack. GT had foresight to get in and sign all up co's in Putumayo/Magdelena for rigs way back. I can elaborate further if you wish.
The army built the roads and infrastructure and protect us from kidnappers and farc and whatever..for a fee. This also keeps the environmentalists at bay but that is another story.
DYOR!!!!

The 1yr rule is the reason why we've been a bit quiet of late..expires tomorrow!!

Do not get the chance to look across the way but Valentine has clearly done his homework and is correct in his assumption.
We are looking at news to be released by latest w/c2nd June, which along with other issues clearly tie up with what Valentine has written.
A first class post.

Ticking along quite nicely.
2517

sivad,

We seem to have been expecting news forever here, and I was wondering if you are still expecting news to be released in the time frame w/c 2nd June.

mabel

Mabel, One of the problems we all have with this stock (unless sivad has a new source?) is that the news leaks all seem to come from the same City source and although that source has been correct, other than as far as timing which is understandable given that everything hinges around ANH meetings, the source also has quite an incentive to ensure that this is a winner. The May ANH meeting would have taken place yesterday if the past timetables is anything to go by so if Amer's items were on the Agenda and the meeting sat long enough to include those items, then news should come out early next week. But nothing seems for certain as far as the ANH timetables are concerned.

I personally dont think there will be an update until the prelims in just under two weeks.

Have to agree with you sharesure. I guess it'll happen when it happens.

mabel

I think six months since the notice of discovery may have some relevance here in terms of ANH time limits.

mabel -I am sorry to have to tell you that news will be slightly delayed until the following week w/ c 9th June-but not on 9th.
Purely admin delays.