Amerisur provided the following update on its reserve base and operations.
Amerisur announced a certified reserves update of the Platanillo acreage following receipt of an independent reserves report as at December 31, 2010 undertaken by Petrotech Engineering Ltd using the standards set by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers. Certified 2P reserves have increased by 350% to 3.6 MMBO. The structural model used in this analysis was that existing at December 31, 2010. These 2P reserves have been evaluated by Petrotech as representing a Net Present Value ("NPV") of US $200m undiscounted and a 10% discounted NPV of $115m. The company also informs that the lifting cost at Platanillo has been further reduced and stood at US$9.94 per barrel of oil in January, resulting in netback to the company of approximately US $67 per barrel of oil at current prices. During that same month a new high monthly cash flow of US $1.73m was achieved. These further efficiencies were not used in the Petrotech economic evaluation, which, as a result of the strict standards applied in the evaluation is conservative in nature, and employs cost data from a wide basket of operating fields.
The acquisition of the Platanillo 125km2 3D3C seismic survey was completed on December 23, 2010, slightly later than planned due to the climatic conditions already reported. During January the Company has completed some important stages in the processing of the data, resulting in an improved structural model. The information received to date is of significantly higher quality than the previous 2D seismic data in terms of density, resolution and frequency content. The previous ambiguity regarding the presence and degree of throw of the bounding fault at some points along the structure has now been resolved, with confirmation of continuity towards the north, and importantly towards the south, into the extended commercial area. In addition, the structure observed to the south of the existing Alea-1R and Platanillo-2 wells is significantly more developed than previously supposed. The 3D3C structure map and petrophysical data were analysed in a Monte Carlo simulation and indicated the following prospective resources within the Platanillo Field:
Furthermore the enhanced potential in the southern part of the structure has led the Company to redesign the drilling program. The first wells will now be located in the southern sector, within the extended Commercial Area. Environmental licensing processes are well advanced and the Company expects the drilling program will commence during Q2 2011 and the 6 planned wells are targeting 35 MMBO of 2P reserves and production to 5,000 BOPD by the year end.
Amerisur has signed a Letter of Intent (LOI) with Calmena Energy Services for the use of the Calmena Rig 836. Calmena is an experienced drilling contractor that currently operates one rig in Colombia. Rig 836 has been previously working on wells up to 10,000ft for Pemex in Mexico, and will be mobilized to Colombia over the next weeks.
Isabel-1 continues on Long Term Test (LTT) with production levels steady at approximately 20 BOPD. Iguasa-1 has received no further treatment since the previous update, and continues to produce intermittently at low rates. The Fronterra study has been delivered and the Company is currently reviewing the conclusions. An additional geological study of the block has also defined a previously undetected structure in the back limb of the block which is under review.
The Company has received a number of offers for participation in the Fenix Block, which are being evaluated. An update will be provided to shareholders when appropriate.
Amerisur has commissioned a 12,800 line km Aeromagnetic survey over its San Pedro block and the Parana basin up to the border with Brazil. This survey is designed to map the general development of the sedimentary series in the basin, and give detailed data within the San Pedro block, which will allow the Company to refine the structural forms and confirm the sourcing pathways to the block which were indicated by our previous Geochemical work. The selected contractor for this survey is Fugro Geophysical, and a contract is expected to be signed shortly. The Company plans to mobilize the survey during April 2011, with completion during July.
John Wardle, CEO said, "The results from the Platanillo 3D3C work are extremely exciting and we have optimized our plans to develop this important opportunity. Our team and I look forward to working with Calmena to deliver our objectives this year. The new work in Fenix is also encouraging, and we see a number of interesting possibilities going forward. The program in San Pedro is also a good step forward, with excellent technical characteristics and will form an important part of our strategy in that transformational area."
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