Amerisur Resources (LSE:AMER) announced the completion of the Putumayo acquisition on Monday. The company has received approval from the Agencia Nacional de Hidrocarburos (ANH) for the assignment of 100% operated working interest in the Putumayo-14 block in Colombia, to its affiliate Amerisur Exploracion Colombia Limitada. The approval enables the completion of the farm-in agreement with Gulfsands Petroleum, signed in July 2018.
The Putumayo-14 block covers 46,361 hectares in the Caguan-Putumayo basin and is located contiguously to the south of Amerisur’s operated Terecay block. Gulfsands has transferred US$750k to Amerisur plus an additional amount to be transferred in Colombia, which corresponds to the balance of the initial agreed contribution of US$1,250,000 from Gulfsands for the operational expenditure and costs of performing a previous consultation (consulta previa) during Phase 0.
Additionally, Gulfsands has transferred US$1,702,208, the guarantee for the Phase 1 work programme, which will commence three years from the end of Phase 0. Phase 1 will include the acquisition of 98km of 2D seismic data and the drilling of one exploration well.
Amerisur has been very active in Colombia in recent months with the drilling of Indico-1 on its 30% owned CPO-5 block commencing in November, resulting in an oil discovery in December. The block is home to the very successful Mariposa well which has been producing at a stable rate of 3,200 barrels of oil per day (bopd) for over a year. Next on the agenda on CPO-5 is the drilling of the Sol-1 well 6.5km south of Indico-1.
Also in November 2018, Amerisur farmed out 50% of its 100% interest in Terecay to Occidental Andina to accelerate its work programme and reduce future capex requirements. Occidental Andina is to fully fund five exploration wells at an estimated cost of $38m and will pay 85% of the total costs for the acquisition of 878km of 2D seismic – estimated at $55.25m
A steady stream of positive developments has seen the Amerisur share price recover strongly from recent lows of 9/10p, with consolidation appearing to be underway around 15p. The board seemed very confident that the share price was not a true refelction of the real value of the company, with several director share purchases in November. 500,000 shares were purchased by chairman Giles Clarke, 150,000 shares bought by non-executive director Chris Jenkins, and a large purchase worth nearly £1m was made by Tracarta Ltd, a company in which Amerisur CEO John Wardle has an interest.
John Wardle, CEO of Amerisur commented:
“We are very pleased to have closed this attractive deal for the Company, further consolidating our strategic position in the Putumayo and adding additional prospective acreage to our Terecay-Tacacho play fairway, where we and our partner Oxy Andina see significant potential in multi-layered reservoirs, proven in our existing operations, in legacy wells and within Ecuador. The block has further strategic importance in that it extends south towards the Putumayo river and Ecuadorian border. This brings benefits in terms of accessibility for operations and eventual evacuation of produced crude by providing a pathway to access the pipeline systems of Ecuador, in a similar way to the existing OBA system in our Platanillo field.”
Author: Stuart Langelaan
Disclosure: The author owns shares in the company mentioned above