AMER.L Regulatory News (AMER)

22 January 2019

Amerisur Resources Plc ("Amerisur" or the "Company")

Reserves, Operational and Production Update

Initial independent assessment of Indico 2P reserves - 22.7 MMBO

Indico-1X current choked natural flow production of 5,130 BOPD

Four well CPO-5 drilling programme - targeting resources of 49.3 MMBO

Amerisur Resources Plc, the oil and gas producer and explorer focused on South America, is pleased to provide a reserves, operational and production update, for its two core regions of Colombia: CPO-5 in the Llanos basin with ONGC Videsh; and the Putumayo basin with Occidental Andina and other partners.

Highlights:

· Preliminary results of independent reserves report (assuming conservative production parameters) on CPO-5 (Amerisur 30%) indicates gross 2P reserves of 22.7 MMBO at Indico-1X and 2.9 MMBO at Mariposa as at 17 January 2019 Reserves report attributes mean gross prospective resources of 49.3 MMBO to the LS3 play around the Indico and Mariposa discoveries which are the targets of a new upcoming drilling programme

· Indico-1X currently producing under choked natural flow at approximately 5,130 BOPD

· Mariposa-1 continues to produce in natural flow at approximately 3,150 BOPD, with the field development plan under preparation by the operator

· 2019 work programme targeting:

o 49.3 MMBO from a minimum of four additional wells from the Indico pad to determine the prospectivity of the area within the LS3 play

o Drilling of the first of up to six wells on Coendu structure (Put 9 and Put 12) is expected to begin in Q3 2019

o Miraparriba-1 expected to spud in H1 2019 on Put-8

· Group average daily production in Q4 2018 was 4,602 BOPD, with peak daily production 5,405 BOPD. Production was impacted by completion issues in Platanillo 22 and 8. Current production rate is 5,426 BOPD

· Ministry of Mines and Energy of Colombia approval to begin the purchase and shipping of third party crude via the OBA expected in H1 2019

CPO-5 (Amerisur 30%, ONGC Videsh 70% and operator)

Indico-1X Update

Indico-1X is currently producing under an extension of the short term test (STT) programme granted by ANH, while the application for Long Term Test (LTT) is processed. The well is currently producing in natural flow at approximately 5,130 BOPD with 0.19% water cut over a 46/64" choke.

Mariposa-1

Mariposa-1 continues to produce in natural flow in a stable manner at approximately 3,150 BOPD with 0.4% water cut over a 28/64" choke. The well has produced approximately 1,300,000 BO since the beginning of the LTT. The Mariposa structure has now been declared a commercial discovery by ANH and the field development plan is under preparation by the operator.

Reserves

The Company commissioned a preliminary study of the Indico-1X discovery and an update of the Mariposa structure analysis by McDaniel and Associates Consultants Ltd (McDaniel) of Calgary. Based upon initial data, McDaniel has calculated the following gross technical recoverable volumes within the Mariposa and Indico structures to date:

It is important to note that these data are preliminary in the sense that the 1P and 2P volumes assume conservative production parameters and also assumes that at Indico the Oil Water Contact ("OWC") of the structure exactly coincides with the Lowest Known Oil ("LKO") defined by logs and in-situ sampling and pressure tests in Indico-1X. The 3P number is similarly conservative, and assumes that the OWC is located approximately 40 feet deeper than the LKO already established in the well, i.e. an additional 13.6% of effective oil column. The Company expects these estimates to be refined as appraisal and development activities are performed at the Indico discovery. Given the size of the proven oil column, the extent and geometry of the Indico structure, the Company believes that the appraisal and development programme could lead to an increase in the reserves volumes. The values calculated by McDaniel are currently technical volumes, since the full field economic parameters are as yet undefined. However, the Company believes in light of the low operating costs and high price realizations for the light crude produced that economic reserves will be of similar values. According to McDaniel´s estimates the Indico-1X well alone may recover approximately 5.8 MMBO.

CPR Resources

McDaniel was also commissioned to review the local structures associated with the LS3 play in the area of Indico and Mariposa at CPO-5, which are the targets of upcoming drilling. This review was performed on a simple structural basis only and the results are shown below:

Future drilling

As previously reported, the Company and partner ONGC Videsh, are planning a minimum of four additional wells on the basis of the Indico discovery. The current programme is:

Calao-1, targeting a structure alongside Indico to the southwest, towards the Aguila structure which is expected to spud before the end of January 2019. On a simple structural basis, McDaniel estimates prospective resources at Calao of between 2 and 9.8 MMBO.

Pavo Real-1, targeting a similar structure adjoining Indico to the northeast. Structural evaluation by McDaniel estimates prospective resources of 4 to 45 MMBO in the combined Indico-Pavo prospect area.

Given the potential for combination trapping, the Company believes potential resources may be significantly higher at both Calao-1 and Pavo Real-1.

Following these wells, a further two appraisal wells will be drilled within the Indico discovery from the Indico pad, with the objective of building production and refining resources and reserves estimates.

Sol-1 is drill-ready and the Company is considering with its partner whether to drill this well following the above programme or to take up the option for a second drilling rig in the short term.

In addition, the partners are evaluating a further increase in drilling activity for 2019, targeting an accelerated appraisal/development of the Indico field, the NE structures and other prospects associated with Indico down-dip and Mariposa offsets. This may involve the contracting of a third drilling rig.

Putumayo region

PUT-8 (Amerisur 50%, Vetra Exploration 50% and operator)

The Company and operator Vetra continue to pursue the approval of Ecopetrol in order to drill the Miraparriba-1 well from the Cohembi-2 pad. The well will target a light oil U and T sand structure defined by 3D seismic. This approval is expected in the first quarter. The environmental studies required to drill the Bienparado structure, to the west of Platanillo field are now underway. Additionally, it is planned to acquire a total of 112km2 of 3D seismic data over the Nyctybius prospect in the central part of the block.

PUT-9 (Amerisur 50% and operator, Occidental 50%) / PUT-12 (Amerisur 60% and operator, Pluspetrol 40%)

Environmental studies have been completed for the construction of a 10.2km road from the Platanillo field to the Coendu prospect in the PUT-9/12 blocks. The civil works on this access road are expected to commence within six weeks and drilling of the first of up to six wells on Coendu is expected to begin in Q3 2019.

In PUT-12, the Company has begun a second 2D seismic acquisition programme of 73km in the south-eastern part of the block.

Tacacho and Terecay (Amerisur 50% and operator, Occidental 50%) / PUT-30 and PUT-14 (Amerisur 100% and operator)

The Company is currently updating the local permits and socializing the activities shortly to commence in these blocks. The initial programme envisages the acquisition of approximately 200km in Tacacho and 470km in Terecay of 2D seismic data in H1 2019.

At PUT-30, Amerisur is completing the final phase of the Prior Consultation (Consulta Previa) with an indigenous community within the block as a necessary step before seismic data acquisition during 2019.

The acquisition of PUT-14 by Amerisur has now been approved by ANH and the funds associated with the transaction have been received by the Company. Amerisur is continuing the Prior Consultation with local communities before initiating the seismic programme during 2019.

Q4 Production and OBA throughput

Total production in the fourth quarter from the Platanillo and the Mariposa fields was 423,386 BO, with an average daily production of 4,602 BOPD. Platanillo production was impacted by completion issues in Platanillo 22 and 8, which occurred during interventions. These wells have now been evaluated and are currently being treated to return them to production. Further well interventions are planned on 24, 21, 25ST1, 17 and 7 as part of the normal maintenance and optimization operations in the Platanillo field. Current group production is 5,426 BOPD which includes the Company's share of the production from Indico-1X.

OBA throughput in Q4 was 236,833 BO with average daily throughput of 2,574 BOPD. This was lower during the fourth quarter owing to the phasing of 2019 Government royalty barrels ("Royalty Barrels"). Royalty Barrels are collected at the Platanillo wellhead and transported by road. The Government elected to take delivery of its 2019 Royalty Barrels disproportionally in Q4, leading to lower utilisation of the OBA in Q4.

As a result of lower oil prices in the fourth quarter, the Company decided not to make sales from Platanillo in the month of December, and instead chose to store produced barrels for sale at higher oil prices in the first quarter of 2019.

The Company is awaiting the approval of the Ministry of Mines and Energy in order to begin purchase and shipping of third party crude via OBA. That approval is expected in H1 2019.

John Wardle, CEO of Amerisur Resources, said:

"Our strategy continues to be to create shareholder value through exposure to material upside in our portfolio, where we continue to deliver by way of our active programme with the drill bit in two core areas of Colombia. Our forward activities are all fully funded from internal resources and positive cash flow from our producing assets, and we remain debt-free.

"We are extremely encouraged by the progress made across our portfolio during 2018. In particular, the excellent results at Indico, where we have added immediate material reserves with very large future upside. McDaniel have a long history and detailed understanding of the Llanos basin in Colombia and the attribution of substantial reserves at this very early stage is a reflection of the quality of our LS3 play.

"The activity we plan in CPO-5 and in our acreage in the Putumayo basin during 2019 has the potential to transform Amerisur - I have never been more excited by, or optimistic about the Company's future."

ENDS

Enquiries:

Notes to editors

About Amerisur Resources

Amerisur Resources is an experienced Colombian Operator with an extensive, strategic acreage position in the underexplored Putumayo in partnership with Occidental Petroleum ("Oxy") and a strategic acreage position in Llanos in CPO-5 with partner ONGC. Amerisur is the 100% owner and operator of the OBA pipeline, a key piece of strategic, cross-border export infrastructure delivering oil from the Putumayo in Colombia into Ecuador. Amerisur produces from three fields, Platanillo in the Putumayo which generates cash flow to fund its work programme and Mariposa-1 and Indico-1X in the Llanos basin. Amerisur has recently announced a potentially transformational result at Indico-1, which significantly exceeded expectations - 283 feet gross, 209 feet net oil column.

Amerisur has a robust financial position with cash generation and balance sheet to fund its work programme.

These assessments are made in accordance with the standard defined in the SPE/WPC Petroleum Resources Management System (2007).

Competent person: Technical information in this announcement has been reviewed by John Wardle Ph.D., the Company's Chief Executive. John Wardle has 32 years' experience in the industry, having worked for BP, Britoil, Emerald Energy and Pebercan, and is a trained drilling engineer.

This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Company's obligations under Article 17 of that Regulation.

www.amerisurresources.com 

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