LONDON (Alliance News) - Amerisur Resources PLC shares fell on Friday after it said electric log analysis at the Loto-2 well in Colombia has indicated there is oil in the well, but further tests will be needed to evaluate whether or not the amount of oil is economically viable to develop.
Amerisur shares were down 10% to 25.44 pence per share on Friday morning.
Amerisur said the well has been drilled to 10,320 feet measured depth, testing two zones within the Mirador formation, L1 and L3. Electric log analysis on those two targets has indicated there is a 54.0 net pay.
However, Chief Executive Jon Wardle said: "Initial analysis of the Loto-2 well indicates there may be an issue with the mobility of the oil in place, coupled with the usual strong Llanos aquifer, and together with our partner ONGC Videsh we intend to further study the detailed test results with the objective of defining whether this accumulation can produce economically through the use of advanced techniques."
The well has been temporarily suspended whilst the company carries out that evaluation.
The total cost of the Loto-2 well was just under USD4.0 million, of which Amerisur contributed USD1.2 million with a further USD690,000 being paid by the company for testing costs. Amerisur said the well was drilled for over 30% less than originally expected, and on schedule.
"It is very encouraging that we have been able to develop the drilling operations in such an efficient and cost effective way. This benefit will enable comprehensive exploration within CPO-5 at very reasonable cost," said Wardle.
The rig used to drill the Loto-2 well has now been demobilsed whilst the company evaluates data and decides on where to drill further wells on the Loto structure. Amerisur expects to define its next targets "in the next few weeks".
Amerisur, with its partner, said they are considering a further test on the Loto-1 well.
The Loto structure is on the CPO-5 contract area in Colombia, where Amerisur holds a 30% non-operated working interest with its partner ONGC Videsh Ltd operating the area with the other 70% stake.
"The company and ONGC Videsh are currently reviewing a number of exciting drilling opportunities within CPO-5 and expect to formalise the future drilling plans before year end," said Amerisur.
"The presence of heavy oil in the Llanos basin is wide spread, given the diversity of sourcing and migration mechanisms, which are the basis of the basin's prodigious potential. The block is on trend with a number of important Llanos light and medium oil discoveries and we remain convinced of the high potential within the structures already identified and the wider exploration opportunities held within the contract," said Wardle.
Amerisur acquired its 30% stake in the area through its USD6.0 million acquisition of Petro Dorado South America SA, which was a subsidiary of Petro Dorado Energy Ltd.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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