Amerisur Resources plc, the oil and gas explorer and developer focussed on South America, announces its unaudited results for the six months ended 30 September 2007.
Highlights
• The Company raised £15m before expenses through the placing of 250m shares at 6p per share and remains very well capitalised
• Re-entry to Alea 1 successful, long term testing continues with current flow rates of 130 barrels of oil per day through a 16/64'' choke
• Both Platanillo 1 and 2 drilled on time and within budget, Platanillo 1 has helped define the limits of the field and results from testing two separate intervals in Platanillo 2 will be available shortly
• Decision on next phase of Platanillo block expected in January 2008
• Completion of the 3D seismic survey on the Fenix block ahead of schedule, initial analysis very encouraging
• Increased our working interest in the Fenix block to 100%, giving greater flexibility to maximise overall value
Giles Clarke, Chairman of Amerisur Resources said:
'Your Company is in better shape than it has ever been. It is focused on delivering value to shareholders through its access to superb prospects in Colombia. We have a professional team in place, production testing is underway and some exciting exploration and development assets are being de-risked for the benefit of shareholders. Our work in Paraguay has also progressed, and we will be performing an exciting programme of data acquisition there during 2008.’
Operations
The new management is now focused on prioritising the Company's most prospective regions with the discovery at Platanillo and excellent exploration prospects in the new Fenix block. The Company has also reviewed a wide selection of new projects within Colombia, seeking new, near term opportunities. Although several of those were attractive, when compared to the potential within our current interests it was decided to concentrate on our existing acreage for the moment. However, we remain on the look out for exciting new portfolio additions.
The Company has made progress with its Platanillo block, in which it holds a 25% working interest under the Platanillo E&P Contract with the Colombian National Hydrocarbons Agency (ANH). Repsol YPF holds 35% and Ecopetrol S.A. (40%) is the operator. The Platanillo block comprises an area of 14,204 hectares located in the Putumayo basin of Colombia.
The re-entry of the Alea-1 well has been successful, and the flow rate has been tested with various choke sizes and is currently producing at 130 barrels of oil per day through a 16/64'' choke. Oil produced is being delivered to the Santana terminal, operated by Gran Tierra Energy Colombia for export.
Platanillo-1, the first new well in a 2 well programme, was drilled to a total depth of 8,390ft. The reservoir section was encountered 55ft deeper at the Platanillo-1 location which is located approximately 2,200m from Alea-1 and analysis of electric logs indicated that the well might be close to the transition zone between the oil and water columns of the field. Platanillo-1 remains a potential candidate for a subsequent re-entry and sidetrack to evaluate reserves up-dip of the current reservoir entry point.
Platanillo-2, the second new well in the current phase of the Platanillo contract has also been drilled to a total depth of 8,578ft. The Lower U sand, which is productive in Alea-1 was encountered approximately 20ft higher than in Alea-1 and 75ft higher than in Platanillo-1. Good shows of oil were observed at that horizon and at several other zones within the reservoir. The condition of the wellbore in this directional well prevented full access of electric logs, however the indications during drilling and the fact that the productive interval was encountered higher indicated that the well should be tested. Accordingly, the well has been secured with 7' casing, which was run to total depth and cemented successfully. The rig Pride-17 was released and has been demobilised. The work over rig Pride-6 has been moved to Platanillo-2 and is currently beginning the testing of this well. The Electric logs acquired through casing confirmed the presence of an oil saturation in the Lower U sand, as at Alea-1, and also a potentially productive zone at a deeper point within the B limestone. The B zone will be tested in the next few days, followed immediately by the Lower U Sand.
We look forward to updating the market on the test results from Platanillo 2. In addition, we expect to agree the next phase for the Platanillo block with our partners in January 2008. The Directors are encouraged with the results of the work programme to date.
Following the initial seismic studies in the Fenix block, Amerisur has, through its subsidiary companies, secured 100% control and benefit of this area. In addition, the Company has identified several positive exploration opportunities. The Fenix block is an area of 24,117 hectares located in the Middle Magdalena Basin of Colombia.
At the end of November, we acquired the entire issued share capital of Fenix Oil and Gas S.A. for a total consideration of US$4.3m satisfied in cash from existing resources to give us a further 35% working interest in this area, increasing our interest in the block to 83.75%. In addition, we acquired from Petex Offshore Inc the remaining 16.25% working interest, giving us, via our subsidiary companies, 100% interest in the block. The total consideration for the transaction with Petex Offshore Inc was 18,240,000 new ordinary shares of 0.1p each in Amerisur. Finally, as part of the transaction, the Company has successfully removed a profit share agreement on the Platanillo block. The completion of the transaction with Petex Offshore Inc has been announced today.
We are busy interpreting the 103km2 of 3D seismic data acquired in this block during the period. This work will be completed during Q1 2008. However, an initial study focused on the southern part of the survey, which adjoins the Bonanza field operated by Ecopetrol and which contains the La Tigra wells has indicated some interesting opportunities. As an example among these is the well La Tigra-10, drilled by Sinclair-BP in 1969, where 30.1 API degree oil was produced from a formation at approximately 4,750ft. Our initial analysis indicates that the structure tested by that well may have a significant closure above the level at which the original well penetrated the reservoir. In addition, the target reservoir within the Lisama sands was not reached by the
well. This analysis indicates that reserves potential within the area studied (approximately 16km2) may be in excess of 8 MMBO. Other exploration leads exist within the block, which will be matured during the current interpretation process. Those leads may carry higher risk than the La Tigra area, but their reserves potential is also significantly higher. Given the range and quality of these opportunities, the Company, now with full control of the block can enter into advantageous partnering scenarios, which will simultaneously increase and accelerate the work programme in the block, while minimising cash requirements for the Company.
Drilling at Primavera was unsuccessful and the block was subsequently relinquished.
We are in advanced negotiations in Paraguay to undertake 2D seismic acquisition on San Pedro & Alto Parana and to acquire aeromagnetometry and aerogravimetry data in the Curupayty block through our Paraguayan subsidiary, Bohemia S.A. Our acreage position in Paraguay is strong, and located in areas which we believe to be very interesting from an exploration viewpoint. The Company has excellent opportunities in Paraguay, where we continue to expand our acreage position ahead of the current surge of international interest. We look forward to making some exciting progress during 2008, when shareholders will be updated.
Corporate
In May, the Company announced a fund raising of £15 million before expenses, by way of the placing with institutional and other investors, arranged by Blue Oar Securities Plc. 250 million new ordinary shares of 0.1 pence each in the capital of the Company were placed at 6 pence per new ordinary share.
In addition, during the period the Company changed its name from Chaco Resources plc to Amerisur Resources plc.
Financials
The headline loss for the period was £1,025,000, which includes operating costs of £644,000 and the (non cash) cost of issuing share options of £1,408,000 and the write back of a provision against future costs of Primavera of £785,000 and income from interest of £245,000.
At the period end, the Company had cash in the bank of £15m and remains very well capitalised.
Outlook
We look forward to updating shareholders shortly with the test results from Platanillo 2 and determining with our partners how the contract is progressed in January 2008.
On the Fenix block, interpretation of the 3D seismic has been encouraging and completion is expected during Q1 2008. In addition, having 100% of the block gives us the flexibility to maximise value.
We also look forward to updating shareholders on progress in Paraguay and continue to analyse potential new projects for the Company.
