30 Aug 2013 07:00
30 August 2013
Amerisur Resources Plc ("Amerisur" or the "Company")
Operations Update
Amerisur Resources Plc, the oil and gas producer and explorer focused on South America, announces an update to its operations in Colombia.
· Oil produced during July totaled 198,216 BO and up to 18 August a further 121,385 BO was produced from the Platanillo field equivalent to 6,522 BOPD
· Total Oil production to date from the Platanillo field 1,780,658 BO
· Platanillo-2 ST1 sidetrack encountered 68ft gross, 39ft net pay
· Successful in-field water injection tests performed
· Construction of new storage facilities making good progress
· Oil transport contracts signed in Ecuador
· Strikes by protesting farmers affecting the whole country have led Amerisur to temporarily close in the Platanillo wells as of 27 August as a contingent response
· Amerisur understands Government negotiations are well advanced - Company ready to open up wells once strike is resolved
· Current cash position US$57MM
Platanillo-2 ST1
Platanillo-2 ST1 has been drilled to a depth of 9,396ft, entering the reservoir approximately 3,102ft south of Platform A. The well encountered 68ft gross, 39ft net of oil column in good quality U sands. This result further confirms the geological model and was in line with the pre-drill prognosis. The well is currently being prepared for testing and commercial production.
Platanillo Production Facilities
The expansion of the Platanillo field production facilities has made very good progress. Both 10,000 BO tanks in Platform 9S are currently being hydro-tested before entering service in September. The 10,000 BO tank in Platform 5S is currently 45% completed and is expected to enter service in October of this year. The enhanced surface separation and well lifting equipment is also being installed and will be progressively commissioned over the coming weeks. These changes will enhance the efficiency and flexibility of field operations, delivering even lower lifting costs, increased storage capacity and expanded export capability.
Water Disposal Facilities
The well Platanillo-1 ST1 was worked over in order to test the potential for disposal of produced water within the Platanillo field. The productive zones were isolated and a 25ft interval of the Pepino formation, situated approximately 3,200ft above the U reservoir was perforated. Injection tests were performed with excellent results, 4,200 BWPD being injected at relatively low pressures. The well continues on a long term injection test. The success of this programme will lead to a significant reduction of water bearing traffic on the Platanillo road system, freeing up tankers and road space for oil production.
Colombia National Issues
As has been publicised by the international media, during the last 11 days Colombia has experienced a series of strikes by protesting farmers and transport workers who are impeding traffic on the main roads of the country. This has compelled all oil producers in Putumayo and several other producing areas to suspend production. Amerisur reduced production over the past 11 days and closed in the Platanillo wells in a controlled manner 3 days ago as a contingent response. The Colombian Government is in negotiations with the strikers and the Company is prepared to immediately re-establish production as soon as those negotiations are completed.
Ecuador Oil Export Agreements
The Company is pleased to report that it has signed oil transport agreements with Cenit, PetroEcuador and OCP Ltd to facilitate exports of Amerisur crude oil through the Ecuadorian transport system, via the OSO, OSLA and OCP pipelines. These agreements form part of the Company's continuing efforts to create diversified, economically attractive and high volume export options.
Dr. John Wardle, Chief Executive commented:
"Platanillo-2 ST1 is a very good result, confirming yet again the precision of the geological model we have developed. That confidence is very important since it allows us to gauge and control the geological risk and helps us to maintain our 100% success rate in the 11 new reservoir penetrations we have drilled since May 2012. I look forward to the test results from Platanillo 2 ST1 and to incorporating its contribution into our rapidly growing production profile as we continue to develop our significant reserves in the Platanillo field. I am also very pleased with the progress made on our surface facilities. These investments will allow the field to enter the next phase of its development, allowing an integral, coordinated management of the southern lobe of the reservoir, maximizing production uptime, simplifying the production process and also giving us the flexibility to individually monitor and manage wells while massively expanding our storage capacity. These benefits will directly reduce our lifting costs while increasing the volume of oil produced and processed.
A further important event was the initiation of in-field water disposal. The success of the injection test in the Pepino formation means we will enjoy an important reduction in water disposal costs, while increasing the volume of produced water we can handle and also removing a significant number of trucks from the road each day, trucks that will now be available to move crude oil production.
The agreements with Cenit, PetroEcuador and OCP are the first steps in what we feel will be a very important opportunity for Amerisur, with diverse and profitable export options for our high quality crude.
We continue to increase our healthy cash position, and all future activities are fully funded from internal resources.
The programme after the completion of Platanillo-2 ST1 includes new wells from the previously undrilled Platform 3N located in the centre of the block and a further 2 wells from Platform 9S.
We regret the current suspension of production due to the national problems, however it is the correct decision to safeguard our interests, and we are ready to open up once the actions are resolved. I am informed that Government negotiations are well advanced and look forward to a successful conclusion."
ENDS
Competent person: Technical information in this announcement has been reviewed by John Wardle Ph.D., the Company's Chief Executive. John Wardle has 29 years' experience in the industry, having worked for BP, Britoil, Emerald Energy and Pebercan, and is a trained drilling engineer.
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