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Amerisur Resources (AMER)

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Wednesday 21 November, 2018

Amerisur Resources

Corporate and Operational Update

RNS Number : 9672H
Amerisur Resources PLC
21 November 2018
 

21 November 2018

 

Amerisur Resources Plc ("Amerisur" or the "Company")

 

Corporate and Operational Update

 

Acquisition of Working Interest - Mecaya Block

Indico-1 Update

Chiritza Pumping Station Update

 

Amerisur Resources Plc, the oil and gas producer and explorer focused on South America, is pleased to present an update on Corporate and Operational activities in Colombia and Ecuador.

 

Mecaya Transaction:

The Company announces the acquisition of the outstanding working interest in the Mecaya contract in the Caguan-Putumayo basin, bringing the Company to 100% working interest holder and Operator from 15% interest (58% effective economic interest).  The Mecaya block lies adjacent to Putumayo-9 covering approximately 74,128 acres and has a faulted zone with potential traps similar to those in the Platanillo field. The Mecaya-1 well, drilled in 1989 produced 682 bopd of 27 degree API oil with 0% water on test from the M2 reservoir. An early objective of the programme within the Mecaya block is to place Mecaya-1 on long term test.

 

Amerisur has been relieved of its obligation to carry capital expenditure of approximately $8.6m and in exchange the Company will make the following payments:

 

Mecaya Oil and Gas Ltd will cede a 55% working interest in exchange for:

 

i.          A cash payment of US$400,000 over a three-year period.

ii.      The payment of US$1.2mm from 50% of Amerisur production in the Mecaya block, payable only when the block is in production.

iii.       Once the production payment has been completed, a royalty payment equal to 4% of production revenue post Government royalties.

 

Petex Offshore Inc. will cede a 30% working interest in exchange for:

 

i.          A cash payment on completion of US$150,000.

ii.      The payment of US$600,000 from 10% of Amerisur production in the Mecaya block, payable only when the block is in production.

iii.        A royalty payment equal to 2.2% of production revenue post Government royalties.

 

Completion of this transaction is conditional on approval from the Agencia Nacional de Hidrocarburos ("ANH").

 

Indico-1 Update

The Operator has informed the Company that Indico-1 drilling is proceeding satisfactorily to plan and budget. The well is currently at approximately 6,500 feet in the 12.1/4" hole section.  Total depth for the well is estimated at 10,780 feet. The Operator estimates a gross P50 recoverable resource at Indico-1 of 10.3 MMBO.

 

Chiritza Update

The Chiritza station has now been commissioned on time and budget and hence Amerisur capacity right has increased to 9,000 barrels of oil per day ("bopd") through its OBA pipeline. The Company is now recovering its capex of US$3.9m through a period where the US$1.09 per barrel Lago Agrio tariff is not paid on the first 5,000 bopd evacuated through the system until the total capex is re-paid.  The Company is currently reviewing options to utilise that capacity through the purchase of local crude oil as an interim measure until Company production increases.

 

John Wardle, CEO of Amerisur said:

"I am very pleased to have consolidated our position in the Mecaya block under these attractive terms. The payments due to the previous partners are now, in the main, dependent upon successful production from the block, as opposed to the carry requirement we inherited by way of our original acquisition. Importantly, the increase of our working interest to 100% offers us significantly increased materiality together with wider strategic options.

 

"I am also pleased at the progress achieved by our partner in the CPO-5 block, where we look forward to entering the potential reservoir in this exciting prospect."

 

ENDS

Enquiries:

 

Nick Harrison, CFO

Amerisur Resources Plc

Tel: +44 (0)330 333 8246

 

 

Billy Clegg / Georgia Edmonds / Kimberley Taylor

Tel: +44 (0)203 757 4980

Camarco

 

Callum Stewart / Nicholas Rhodes / Ashton Clanfield

Stifel Nicolaus Europe Limited

Tel: +44 (0)20 7710 7600

 

 

Chris Sim / Alexander Ruffman

Tel: +44 (0)207 597 4000

Investec

 

 

 

Paul Shackleton / Dan Gee-Summons

Tel: +44 (0)20 7614 5900

Arden Partners plc

 

 

Notes to editors

 

About Amerisur Resources

Amerisur Resources is an independent full-cycle oil and gas company focused on South America, with assets in Colombia and Paraguay and production from two fields in Colombia. In 2016 Amerisur successfully built and is 100% owner of the strategic OBA oil transfer line into Ecuador.

 

In Colombia, the Company is operator and has a 100% working interest in the Platanillo block which includes the Platanillo producing field in the Putumayo basin, and holds a 30% non-operated working interest in the CPO-5 block containing the Mariposa-1 producing field in the Llanos basin.

 

Amerisur has a strong position in the Putumayo basin and has a cluster of near term activity assets around the OBA export line.

 

These assessments are made in accordance with the standard defined in the SPE/WPC Petroleum Resources Management System (2007).

 

Competent person: Technical information in this announcement has been reviewed by John Wardle Ph.D., the Company's Chief Executive. John Wardle has 32 years' experience in the industry, having worked for BP, Britoil, Emerald Energy and Pebercan, and is a trained drilling engineer.

 

This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Company's obligations under Article 17 of that Regulation.

 

www.amerisurresources.com 

 

Glossary

 

API

American Petroleum Institute

BOPD

barrels of oil per day

MMBO

million barrels of oil

P50

Probability resource estimate such that 50% of estimates exceed the P50 estimate

 


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