This morning saw Amerisur Resources (LSE:AMER) edge up 1.9pc to 14.9p after announcing further production progress at its key Platanillo block in Columbia. The South America-focused explorer reported that it has spudded a well calledPintadillo-1, which will be the first of up to three targeting the N Sand anomaly at Platanillo, as identified on 3D seismic. Pintadillo-1 will be a slightly deviated well, with a planned total measured depth of 8,448ft.
The N Sand anomaly is one of four identified by Amerisur in the central part of the Platanillo block and is estimated to hold P50 resources of 11.44MMbo. John Wardle, chief executive of Amerisur, said: ‘We are delighted to have commenced the drilling of Pintadillo-1, in the central part of the Platanillo block, the first of up to three fully-funded wells targeting the N Sand anomaly and estimated to hold P50 resources of 11.44mmbo. TThis is an exciting time for the company and I look forward to updating shareholders in due course on the results.’
The news comes just weeks after the firm said it had successfully carried out a cement squeeze operation to recover its Platanilo-22 well, where a severe degradation of the cement sheath was holding back production. It has now finished a full recompletion of the well and partially perforated it earlier this month, bringing current output to circa 360bopd at a low pump rate as water levels continue to decline steadily. The well will soon be fully perforated, and a pump increase will be performed to increase production. As a result of work at Platanillo-22, production in July was hit slight, reaching 150,911bbls, equating to 4,868bopd, with peak daily production of 5,119bbls.
Further to its updates on Platanillo, Amerisur said that its Chiritza re-pumping station project continues to advance, ahead of schedule. It is currently installing booster pumps and control systems at the station and expects to commission it in September 2018, on budget and ahead of schedule. Once completed Amerisur will have access to a minimum daily carrying capacity of 9,000 bopd through the RODA system.
We highlighted Amerisur as a potential buy when it bounced off all-time lows of 13.4p earlier this month. As well as the possible double-bottom set-up, the price action has been forming an enormous Falling Wedge pattern over the past three years. The oil sector has recovered significantly, andAmerisur is now stepping-up production again, lending fundamental reasons for a break in the downward trend of its share price.
Falling Wedge patterns usually result in a bullish move, and as a rule, the subsequent stepcan be as significantas the height of the pattern. If this plays out with Amerisur, the potential upside indicated is almost 200% from today’s price.
Author: Daniel Flynn
Disclosure: The Author does not hold a position in the stock mentioned in this piece