Colombian oil production soars at Amerisur

Amerisur Resources on Thursday confirmed production from the Platanillo field in Colombia was approximately 7,100 barrels of oil per day (bopd).

Total field production capacity was estimated at 8,500 bopd, following the start-up of production at Platanillo 11 (1,100 bopd) and Alea-IR ST1 (700 bopd).

Amerisur also informed the market that its operations at Platanillo 2 and Platanillo 12 had begun and civil works on road access to northern platforms should commence in June.

Chief executive John Wardle said he was "encouraged" by the results from the field, commenting: "We have now drilled seven new wells and performed two side-tracks of legacy wells with a 100% success rate. This is a very strong endorsement of the geological model and bodes well for the wells to the north.

"With civil works on the northern road to Platform 3N commencing shortly I look forward to seeing further significant growth as we extend our reserves base beyond the strong results of Platanillo-1 side-track."

He concluded: "As we have already demonstrated, logistical issues can and will be addressed gradually to develop Platanillo to its full scale."

Separately, Amerisur confirmed that interpretation of the newly acquired 2D seismic data was continuing on the Fenix Block in Colombia, while a gravity survey had been initiated in the western blocks in Paraguay.

Analyst view

"In 50 days, Amerisur has increased Platanillo production from 'over 4,000' to 7,100 bopd," observed Brian Gallagher, analyst at Investec. "For us, this 77.5% rise in volumes reinforces the operational and logistical performance of the South American-based explorer and producer against a challenging backdrop."

He added: "Moreover, volumes can go higher still", explaining: "With field capacity now at 8,500 bopd and with two further wells drilling, Amerisur could end the summer producing close to 10,000 bopd (logistics dependent)."

Malcolm Graham-Wood, analyst at VSA Capital, struck a more cautious tone. "It's been a great 12 months for the company and while there have been some logistical issues at Platanillo, it seems these are being gradually ironed out."

However, he added: "We've always viewed management and the story positively, but based on current corporate activity in the area we think the stock could be close to a fair value at the present time."