Amerisur Resources has kicked off a six well drilling campaign on the Platanillo block in Colombia that could mean a big increase in reserves for the South American oil explorer. The Platanillo-3 well is already over 3,000 feet down – almost half-way to target depth -– and test results could be out by the end of the month. Success here will be warmly received and puts the explorer firmly on course to hit its production target of 5,000 barrels of oil a day by the end of 2012.
Analysts at RBC Capital Markets put the well’s chance of success at 30 per cent, but that’s “conservative” and a strike could be worth as much as 7p a share. The omens are good. Last month, an independent report more than doubled proven and probable (2P) reserves at Platanillo to 7.7m barrels of oil, giving a net present value of $401m (£252m), or $204m using a 10 per cent discount rate. Results for the first three wells should be in by the end of July.
Potential for 'unconventional' oil at Amerisur’s Fenix block is early stage, but interesting. Paraguay is, too, and international oil companies are circling. Amerisur has already started work on newly-awarded prospecting permits for over 5m hectares and multiple farm-outs on each block are likely, says chief executive John Wardle.
Analysts at RBC expect current year pre-tax profit of $32m and EPS of 2¢.
AMERISUR RESOURCES (AMER) | ||||
|---|---|---|---|---|
| ORD PRICE: | 24.5p | MARKET VALUE: | £224m | |
| TOUCH: | 24-24.5p | 12-MONTH HIGH: | 30p | LOW: 9p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE*: | 7¢ | NET CASH: | $17.2m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 0.10 | -0.92 | -0.12 | nil |
| 2009 | 0.35 | 0.05 | nil | nil |
| 2010 | 1.73 | -1.23 | 0.06 | nil |
| ($m) | ($m) | (¢) | (¢) | |
| 2010† | 9.01 | 2.26 | 0.13 | nil |
| 2011 | 14.19 | 3.51 | 0.19 | nil |
| % change** | +18 | +17 | +10 | - |
*Includes intangible assets of $47m, or 5¢ a share †Nine-month figures **Annualised change £1=$1.59 | ||||
