Established South America-focused oil and gas firm Amerisur Resources (LSE:AMER) edged up today after telling investors its planned exploration drilling work in Columbia is progressing steadily. Shares were up 1.9pc, or 0.3p, to 16.2p in morning trading after chief executive John Wardle said Amerisur is gearing up for a busy period of exploration drilling, targeting 26MMbo of gross resources over three wells.
It said it had made good progress on the civil works and construction work at its Platanillo block, where the company is gearing up for a three-well drilling programme. Despite adverse weather conditions and the discovery of unconsolidated zones on the route that will require additional work, construction is expected to complete in June. After this, a rig will be mobilised to drill the first of up to three wells targeting the N Sand anomaly at the site, a process that is expected to take less than a month.
The firm added that work at the Putumayo-8 block, where it is planning a two-well drilling programme, has been slightly delayed. A well, called Miraparriba-1, is now expected to be drilled next month. Finally, the firm said preparations for the spudding of well Indico-1 at its CPO-5 licence have continued to advance despite also experiencing harsh weather conditions. A rig is now expected to mobilise in late June 2018.
After a difficult start to the year, Amerisur has enjoyed a jump in recent weeks, spurred on by the release of its final results for 2017 in mid-April. The business reported a 96pc year-on-year increase in revenues to $92.5m and full-year EBITDA of $19.8m, up from $0.4m in 2016. It also said that net cash from operating activities over the year increased to $30m from $3.3m, giving it a strong cash position at year-end of $41.3m with zero debt. Since the year ended, the company has further strengthened its financial position by entering into a $35m working capital facility with Shell Western Supply and Trading Limited.
ValueTheMarkets.com has highlighted Amerisur as a possible buying opportunity several times, most recently in March when we asked if the company was on the verge of a turnaround, with shares sitting at around 16p. With Amerisur releasing strong results since then and with plenty of newsflow on the horizon from its drilling activities, could a catalyst be on the cards to give its share price a much-needed full post-oil-crash recovery?