Amerisur Resources (LSE:AMER) rose 1.6pc to 18.7p on Tuesday after releasing a robust operational update that saw it present a highly bullish outlook for oil prices.
Towards the end of the update, the firm said it opted not to sell oil produced from its Platanillo block in Colombia in December because of lower oil prices in Q4 2018. Instead, it chose to store its barrels for sale at higher oil prices in the first quarter of 2019.
Oil prices were suppressed considerably towards the end of last year as a result of concerns over the US/China trade war, swelling US crude stockpiles, and fears around slowing global growth. However, things have got off to a much better start in 2019, with Brent prices rising from $50.47/bbl to $62/bbl over the last month, according to BBC figures.
Prices have been supported by a more robust backdrop for financial markets, growing demand in China, the prospect of slower crude production growth, and OPEC production cuts. Amerisur’s plans here suggest it is confident that this bull-run can continue.
Elsewhere in today’s update, the business revealed the preliminary results of an independent reserves report at its 30pc owned CPO-5 field in Colombia. The work has indicated gross 2P reserves of 22.7MMbo at the site’s Indico-1X well and 2.9MMb at its Mariposa well. Meanwhile, the reserves report attributed mean gross prospective resources of 49.3MMbo to the LS3 play around the Indico and Mariposa discoveries.
The firm said Indico-1X is currently producing under choked natural flow at c.5,130bopc. Meanwhile, Mariposa-1 is continuing to contribute in natural flow at a rate of around 3,150bopd. Group average daily production in Q4 2018 came in at 4,602bopd, with peak daily production of 5,405bopd. Since the New Year, production has risen to hit its current rate of 5,426bopd.
Elsewhere, Amerisur lay down its plans for the next stage of its 2019 work programme. This will see it target 49.3MMbo from a minimum of four additional wells at the Indico pad on CPO-5. It also aims to determine the prospectivity of the area within the LS3 play.
Following this, the firm plans to drill the first of up to six wells on the Coendu structure beneath its Put-9 and Put-12 fields in Q3 2019. It also expects to spud a well called Miraparriba-1 on its Put-8 field in the first half of the year.
John Wardle, chief executive 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.’