Amerisur Resources (LSE:AMER) was up 20% in early trading this morning after announcing drilling had reached the targeted Lower Sands (LS3) at the Indico-1 well. Initial analysis indicates that a 283 feet gross, 209 feet net, oil column is present in the LS3 formation with no Oil-Water-Contact (OWC) detected in the wireline logs acquired to date. The company also states the LS3 unit is a high quality sand with some shale intercalations, principally towards the base.
Giles Clarke, Chairman of Amerisur commented:
“This is an excellent result for Amerisur and our partner ONGC Videsh, and underlines the very high potential of this Llanos basin block. I take this opportunity to congratulate ONGC Videsh on this important success and to thank them for their efficient and productive drilling of this key well.”
Indico-1 is located on the CPO-5 block which also contains the successful Mariposa-1 well, drilled in May 2017. Mariposa-1 currently produces 3,200 bopd with production showing to be stable over the past year.
In an interview with ValueTheMarkets two weeks ago, Amerisur’s CFO, Nick Harrison said: “If the Indico-1 well performs anything like that [Mariposa-1] it would point to the fact the CPO-5 block could be very prospective and perhaps larger than we’d hoped for”
Further wireline logging data will continue to be acquired at Indico-1, including pressures and samples across the reservoir. A 7-inch production liner will then be run and cemented followed by short term testing of the well. Amerisur will give further updates on progress as operations develop.
The company owns a 30% interest in the CPO-5 block and once operations are complete at Indico-1, the rig will move to drill the Sol-1 well. The site is 6.5km south of Indico-1 and around 13km southeast of Mariposa-1. Drilling at Sol-1 is to target the same LS3 unit encountered by Indico-1 and Mariposa-1.
John Wardle, CEO of Amerisur said:
“In our view the principal pre-drill risk in this well was the presence of significant sand development in the Une formation. The results of the drilling have significantly exceeded our expectations in this respect and of course the very significant oil column encountered means we will have to review, with our partner ONGC Videsh, the resources associated with the Indico structure. The fact that no OWC was encountered is also very positive for the eventual size of recoverable reserves within the structure. Naturally, given this result, the Company and our partner will be reviewing options for further appraisal wells into the Indico structure in the short term, which will be required to further extend and define the resources encountered.
“Our impression now is that we are developing an important play fairway within the LS3 unit of our large CPO-5 block, which will be further explored with the drilling of Sol-1 post short-term testing of Indico-1.”
Author: Stuart Langelaan
Disclosure: The author owns shares in the company mentioned above