Amerisur operational update

 

Amerisur Resources is an independent full-cycle oil and gas company focused on South America, with assets in Colombia and Paraguay. I have a holding in my growth portfolio (epic code: AMER)

Amerisur announced an operational update today.  The Platanillo-11 well produced 1,500 barrels of oil per day (BOPD) over a controlled choke and has now been placed on production at approximately 1,100  BOPD and Alea-1R ST1 sidetrack is producing 700 BOPD under controlled production. Platanillo-2 ST1 sidetrack has commenced and Platanillo-12 has been spudded and a 500 point gravity survey is underway in Paraguay.

Logistical issues continue to constrain field production, back as recent as April production was being constrained to 4,000 BOPD, due to export capacity. However the Company's efforts to develop alternative options are proving successful and the net impact of the constraint has been significantly reduced. Current field production is approximately 7,100 BOPD against a calculated production potential of 8,500 BOPD.

Amerisur is in the early stages as an oil & gas producer.  As recently as 2009 their turnover was just $2.8m, last year ended 31 December their sales were $42.2m with earnings of $12.8m and forecasts are for them to achieve sales of $230m this year with earnings of just over $100m.  Operations in South America though do come with substantial execution risk, the current export constraint highlighting just one, hence the forward P/E for this year is just 6.5.  They are though a profitable oil & gas exploration company, that broadly delivers on expectations in an extremely tough environment. 

The company raised $42m back in October and had $47m net cash on the balance sheet at year-end, this in addition to their current level of profitability, indicates that they can self fund their exploration plans.  In March they announced results of an independent reserves report stating that field reserves (proven and probable) as at December 2012 had more than tripled from 7.7 million barrels of oil (MMBO) last year to 29.9 MMBO.

Amerisur are active in the following areas of South America:

Click on map to enlarge