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.

One scenario that squares the circle is the persistent sellers being the ones who are also creating the rumours - let's hope not, or we'll all have been taken for mugs.

SD
All the rumours seem to be confirming things that are in progress and should have happened already. We need the management to get on and confirm everything ASAP.

stosckdog, that idea has occured to me as well. Not everything
fits as well as it should here!!

M

bodeng - in my experience rumours don't confirm things, facts confirm rumours!

Things are coming together. Fact.

Fact is - there are not a lot of facts to give the market confidence. Only when we get an RNS stating flow volumes etal will anyone but speculators listen

bhunt, dont expect flow volumes much before Xmas mate.

M

SS - sometimes I do question BC's judgement here. Was the appointment of a non-exec chairman (part-time) the right thing to do? Very frustrated after 3 years holding that I am down considerably on paper, yet I cant deny the fact that we have obvious potential and have made decent progress since when I initially bought CHP.

ML - as operator of Plat, I would hope we will get regular operational updates from here on in, what exactly have they been doing in the last 6 months since discovery?

Robbie, I suspect that BC knows this company inside out but has just got over-optimistic on timing (hopefully that is in the past now as I believe the company assurances for updates in July will not be allowed to drift). I am sure that BC, like us, will not have thought much of the stupid RNS concerning director's share options, particularly at the current sp. Where was the incentive to make them do better?
If Amerisur turns rumour into fact, on the current oil/barrel price the sp should be capable of multi-bagging fairly quickly from here once figures are released in an RNS. Anyone else think that for each 1,000 barrels production the sp should rise by 14p? As for rserves in the ground, these should be worth about 1p on the sp/1 mb even with a heavy discount for quality and risks?

Sharesure, why would the sp rise by 14p per 1,000 barrels production? That kind of sp rise would add around 120 million to the mcap, wouldn't it?

LR2 1000 b/d times 365 times 30/b profit = 11m pa profit at 12 yp = 120m
Does that sound ambitious or conservative to you? Has anyone else done any calculations they want to share?

Yet another exciting week with AMER!

cmp - you mean next week? Think you may be right if it all comes together for what they are trying to do.

The run up to 9p was on speculation rather than fact, so it isn't surprising that sp is down to c6p.

It doesn't change the fundamentals of this stock. On the contrary, now could represent an excellent buying opportunity.

The only comfort is that this drop in sp is on low volume. It would as easily rise if the market sentiment was at all different/positive. It certainly makes no sense to be back down at the placing price of a year ago when the oil price is now much higher, we are nearer production, plus amer now has 100% of Fenix.

It will only move up when there is real evidence of asset backing.

Some of today's drop could have been caused by margin calls on those in IPL - it has apparently caused FRR to drop as well since all 3 are good oil punts with probably the same investors. The drop here makes no sense otherwise since from what I can gather nothing has changed for the worse at Amerisur

The only thing that changed, and dropped the price, was that some felt the flow-test would be continuous from January when they first alerted us to it. They appear to have ceased the flow testing somewhere in Feb, ergo the assumed 'profit' never transpired. Whether they stopped because it would alert Repsol to matters they would rather keep under wraps, or because of Farc, or other infrastructure problems we shall have to wait until the AGM to find out exactly what caused the cessation.
Bureaucracy is at least partially responsible and they may need the operator status to continue over a certain barrelage.
Questions will be asked.
They intend going back into Alea shortly and restarting production. Needless to say probably after the AGM now and after the Repsol deal is completed, and possibly the the Ecopetrol share.. They are keeping all close to chest but I have no doubt all those questions will be answered on AGM day. Hearing beforehand depends on the speed of the Colombian red-tape process and that is not fast!
I look forward to the AGM.

Today's fall was incipient fear that went through the markets worldwide. Some claim the uncertainty is not over yet!
A Mid-July announcement may now be somewhat optimistic.

Thanks Uotld- Clear to the point post reassuring and much appreciated