Company overview Amerisur Resources is an oil and gas exploration firm focussed in Columbia and Paraguay. Its key resource is the Platanillo fields in Columbia which at the time of writing is the only productive asset so far.
Under/Over valued? As this is a small oil and gas exploration firm operating in a potentially unstable region, this would represent a very high risk investment. In terms of exploration, the company has made significant progress in recent years turning exploration projects into productive assets. Production only recently began at its Platanillo field in southern Columbia and the last update from the company in December showed that they were producing 4,342 barrels of oil equivalent per day (boepd) and confirmed that they remain on track to produce 5,000 boepd at 2012 year end. There remain several other wells still to be drilled for which updates are expected in Q1 2013 but tests carried out so far are positive. Amerisur have a 100% working interest in the Platanillo blocks and a 100% interest at its other exploration blocks in Columbia and Paraguay. These are all set for more seismic activity and drilling in 2013 and the company remain positive on their prospects.
With production increasing at a rapid rate, the company is expected to build on last year's performance with net margins expected in the region of 45% helped by the fact that the company has no debts on its books.
Risks There are significant risks regarding the exploration, there may be oil wells that turn out to be dry or yield insufficient quantities to make it commercially viable. Given the region that they operate in there are high political risks and the threat of natural disasters is always present.
Facts The last set of published results for the 6 months to 30 June 2012 showed revenues of $6 million, operating profits of $1.2 million with a cash balance of $11.2 million.
i have every confidence in amerisur and their management and directors. people are begining to realise the potential of this company. I would say the true market value of this share is 64p-70p; and with all the potential good news, it could be soon seeing 85-95p price tag!
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