TIDMAMER
RNS Number : 8836J
Amerisur Resources PLC
15 September 2016
15(th) September 2016
Amerisur Resources Plc ("Amerisur", "the Company" or "the
Group")
Interim Results
"OBA pipeline complete and undergoing final commissioning,
operational in the days ahead reducing OPEX per barrel to $15,
drilling at Platanillo"
Amerisur Resources Plc, the oil and gas producer and explorer
focused on South America, is pleased to announce its interim
results for the six months ended 30(th) June 2016 (the
"Period").
Highlights:
Production
-- Oleoducto Binacional Amerisur ("OBA") interconnector pipeline
is now completed and undergoing final checks with exports set to
commence in the next few days - scheduled to reduce cost per barrel
produced from $26 to $15
-- H1 2016 average production of 2,642 barrels of oil per day
("BOPD"), average realised price of US$35.7 per barrel
-- Currently producing at approximately 4,500 BOPD
-- Platanillo-8 spudded and successfully completed in July 2016
- currently producing from the T sand at 410 BOPD
-- Platanillo-20 re-completed in the U sand and is producing 775
BOPD in natural flow through a 32/64" choke
-- 2016 targeted production exit rate of 7,200 BOPD
Exploration and Appraisal
-- Jaguareté-1 well, on the San Pedro Block in Paraguay, drilled
on budget and safely encountered hydrocarbons in uncommercial
reservoirs
-- Loto-1 in CPO-5 re-entered to test Mirador L4 zone, with results undergoing analysis
Corporate
-- OBA cluster area (Platanillo, PUT-8 and PUT-12) strengthened
through acquisition of Platino Energy for a total consideration of
$7.6m
-- A minimum of three fully funded wells planned in the OBA cluster area in the next 12 months
-- Board strengthened with the appointment of Chris Jenkins as
an Independent Non-Executive Director
Financial
-- Successfully raised net proceeds of approximately $35 million
through a share placing to fund growth
-- As a result of the lower oil price environment and the planned reduction in production:
o Revenue of US$24.4 million (H1 2015: US$40.3 million)
o Operating cash flow for the period of -US$0.4 million (H1
2015: US$8.1 million)
o Non-cash amortisation charge reduced to $4.4 million caused by
a technical increase in reserves
o Operating loss of US$7.2 million (H1 2015: Loss of US$6.5
million)
o Loss before tax US$6.8 million (H1 2015: Loss of US$5.8
million)
-- Cash position at period end is US$56.1 million with no debt
Giles Clarke, Chairman of Amerisur said:
"We have made great strides in the first half, further
diversifying our portfolio within the Putumayo region of Colombia,
with activity levels across many blocks increasing as we deploy the
capital raised in March. I am particularly pleased the OBA pipeline
is now fully completed and undergoing final commissioning checks
before entering operation within days and as a result we are once
again drilling wells on the Platanillo field to increase reserves
and production and leverage the significantly reduced opex per
barrel using the pipeline for oil evacuation. We would like to
thank shareholders for their patience in what has been an
exceptionally complex undertaking.
"Amerisur now has a cluster of assets around the OBA pipeline
including the Platanillo field, Put-8 to the West of Platanillo and
Put-12 to the East. Following our successful placing of
approximately $35 million in March, we have the capital to invest
in drilling new wells at Platanillo, to increase both reserves and
production and to move forward our acreage elsewhere in the
portfolio such that Amerisur anticipates producing commercially
from more than one oil field during 2017. Production in the second
half is expected to ramp up (whilst preserving the integrity of the
reservoir) and we are targeting a 2016 exit rate of 7,200 BOPD.
"We are prepared for an exciting second half and beyond. The
Board looks to the future with confidence."
Enquiries:
Billy Clegg/Georgia Tel: +44 (0)203 757 4980
Mann
Camarco
Callum Stewart/Ashton Tel: +44 (0)20 7710 7600
Clanfield
Stifel Nicolaus Europe
Limited
Chris Sim/George Price Tel: +44 (0)207 597 4000
Investec
Darrell Uden/Daniel Tel: +44 (0)207 653 4000
Conti
RBC Capital Markets
Notes to editors
Amerisur Resources is an independent full-cycle oil and gas
company focused on South America, with assets in Colombia and
Paraguay and production from the Platanillo field in southern
Colombia. In 2016 Amerisur successfully built and is 100% owner of
the strategic OBA pipeline into Ecuador. Amerisur's strategy is to
acquire, explore and develop large acreage positions in major under
explored basins located in South America.
In Colombia, the Company is operator and has a 100% working
interest in the Platanillo block which includes the Platanillo
field, which produced an average of 4,437 BOPD during 2015. The
11,341 hectare block is located in the Putumayo Basin. Amerisur has
a 50% working interest in the PUT-8 Block adjacent to the West of
Platanillo, a 100% working interest and operatorship in the Coati
Evaluation Area (Temblon Field) within the Coati Block (Amerisur
60% and operator) located in the South West of the Putumayo basin
and a 100% working interest and operatorship in the Andaquies Block
located in the north east of the Putumayo basin.
Amerisur has a 60% working interest and operatorship in block
Put-12, a 55,000 hectare block which is adjacent to Platanillo and
shares its geology and a 50% working interest in Put-30 a 38,514
hectare block, approximately 55 kilometres to the north of the
Company's 100% owned Platanillo field. In addition, the Company has
a 30% working interest in the CPO-5 contract, located in the Llanos
basin and a 49.5% working interest in the Tacacho contract, located
in the Caguan-Putumayo basin.
In Paraguay, Amerisur is the largest acreage holder in the
country, with approximately 4.8 million hectares covering four 100%
owned oil and gas permits in the Paraguayan part of the Chaco and
Parana Basins.
www.amerisurresources.com
In accordance with the AIM Rules - Note for Mining and Oil &
Gas Companies - June 2009, the technical information in this
announcement has been reviewed by John Wardle Ph.D., the Company's
Chief Executive. John Wardle has 31 years' experience in the
industry, having worked for BP, Britoil, Emerald Energy and
Pebercan, and is a trained drilling engineer.
Estimates of reserves and resources contained in this
announcement were prepared in accordance with the Petroleum
Resource Management System guidelines endorsed by the Society of
Petroleum Engineers, World Petroleum Congress, American Association
of Petroleum Geologists and Society of Petroleum Evaluation
Engineers.
Chairman's Statement
Introduction
We have made great strides in the first half, further
diversifying our portfolio within the Putumayo region of Colombia,
with activity levels across many blocks increasing as we deploy the
capital raised in March. I am particularly pleased the OBA pipeline
has been completed and will be operational in the next few days and
as a result we are once again drilling wells on the Platanillo
field to increase reserves and production and leverage the
significantly reduced opex per barrel using the pipeline for oil
evacuation.
Post period end on 24(th) August 2016 a peace deal between the
Colombian Government and FARC was announced, following four years
of formal negotiations. FARC rebels are to disarm and demobilise
and their leaders will be given a role in politics. The Board
anticipates this will lead to better security of infrastructure and
an improved operating environment. The final shape of the deal will
be subject to a referendum if approved by Congress. As a reminder,
Colombia has a strong democratic tradition, winning independence in
1819 and is a significant oil producer, producing an average of
1,005,400 BOPD in 2015.
In January, we acquired for $7.6 million Platino Energy which
bought two key Putumayo blocks into the portfolio, the Put-8 block,
which lies directly to the West of the Platanillo block and the
Coati block which has a discovery on it and some very interesting
exploration acreage. The acquisition brought with it significant
tax losses and minimal work commitments, while also consolidating
our position in the Putumayo basin. The acquisition was in line
with our strategy to expand the Company's asset base taking
advantage of the low oil price environment (the Brent oil price was
$27 per barrel at the time) to buy assets with significant resource
potential at attractive valuations, while expanding our portfolio
of opportunities, thus creating greater flexibility and diversity
in our production base and forward planning.
Since then, we have farmed out some of the Coati exploration
acreage to Canacol and I congratulate the executive for securing a
farm out with a carry worth $10.75million, considerably more than
the $7.6million we paid for the whole of Platino Energy.
During the first half, we drilled the Jaguareté-1 well on the
San Pedro Block in Paraguay which has enabled us to retain all our
acreage in country. Whilst not a commercial discovery at this stage
due to encountering a tight reservoir, it is the first ever
confirmation of oil presence in the Parana basin in Paraguay, which
could become a significant new oil province. The challenge now is
to define the geology encountered in order to further understand
the characteristics of the reservoirs, since a higher quality of
rock is usually required in order to produce economically. While
those studies are underway, which may take up to 18 months to
complete, the Company will restrict investment in Paraguay and
concentrate on operations within our core area of Colombia.
Capital raise
Amerisur now has a cluster of assets around the OBA pipeline
including the Platanillo field, Put-8 to the West of Platanillo and
Put-12 to the East of Platanillo. In order to maximise reserves in
and production from the OBA cluster, in March a placing of new
ordinary shares was undertaken to raise net proceeds of
approximately $35 million. The Placing Shares issued represented
approximately 9.6 per cent. of the Company's existing issued
ordinary share capital. The new funds have enabled the execution of
an active drilling programme at significantly lower costs due to
the oil price climate such that we can increase reserves and
production whilst maintaining our capital discipline and
flexibility. These activities will support production growth in the
near as well as longer term and enable the Company to maximise the
utilisation of its new, lower cost OBA export route.
Reserves
Reserves as at 31 December 2015 held up well, and after
adjusting for 2015 production showed a slight increase. Certified
1P (Proven) gross field reserves were 15.2 million barrels of oil
("MMBO") (2014: 16.2 MMBO) after production of 1.62 MMBO during
2015 and 2P (Proven and Probable) gross field reserves were 23.7
MMBO (2014: 24.55 MMBO).
Board, Corporate Governance and People
I was pleased to welcome Chris Jenkins to the Board, as an
Independent Non-executive Director. Chris is a Fellow of the
Institute of Chartered Accountants in England and Wales, and was a
partner for more than 20 years in KPMG's London office, during a 30
year career with the firm. He was lead audit partner for six
FTSE-100 companies. At KPMG he fulfilled various leadership roles
in the global Energy and Natural Resources ("ENR") practice
including UK Head of ENR and, in the global ENR team, initially
head of audit, and then EMA regional chairman.
Chris Jenkins continues to work with KPMG as a consultant. Chris
has been appointed Chair of the Audit Committee, taking over from
Nigel Luson. I would like to thank Nigel for the energy he put into
his role of chairing the Audit Committee.
The direction of travel on improving corporate governance at
Amerisur is positive. As part of that, at the AGM in May, for the
first time, we put the Remuneration Report to a vote at the meeting
and I was pleased to note that the resolution was passed with an
overwhelming majority.
I would like to thank every one of our staff in Colombia for the
magnificent achievement of getting the OBA pipeline built. It is a
remarkable achievement and positions Amerisur particularly well for
the future.
Outlook
The outlook for Amerisur is strong. Oil prices have rebounded
from their lows to stabilize at around $45 to $50 per barrel. At
the same time, we are reducing opex per barrel for our production
significantly from $26 per barrel to $15, which makes the
production much more profitable and cash generative. This has of
course been enabled by the construction of the OBA pipeline, which
after some weather related delays will shortly be operational and
transporting our crude from the Platanillo field.
We have the capital to invest in drilling new wells at
Platanillo, to increase both reserves and production and to move
forward our acreage elsewhere in the portfolio such that Amerisur
anticipates producing commercially from more than one oil field
during 2017. Production in the second half is expected to ramp up
(whilst preserving the integrity of the reservoir) and we are
targeting a 2016 exit rate of 7,200 BOPD.
We are prepared for an exciting second half and beyond. The
Board looks to the future with confidence.
Giles Clarke
Chairman
14(th) September 2016
Chief Executive's Statement
With the strategic and operational decisions and actions taken
in the first half, I believe Amerisur is better placed now for the
future than it has ever been. We have an export pipeline which will
reduce opex per barrel significantly, we have a broader portfolio
of assets in Colombia, a strong balance sheet which we are
deploying to increase reserves and production to leverage the OBA
pipeline from a cluster of blocks geographically close to the
pipeline. Whilst production in the first half was lower, we used
the downtime to improve the functioning of the Platanillo field,
with technical improvements such as power generation with produced
gas and more efficient water handling. We are anticipating a ramp
up of production such that we exit 2016 producing something in the
region of 7,200 BOPD. In Colombia, we now have a more diverse and
enriched portfolio of assets including:
-- 100% of Platanillo - OBA cluster
-- 50% Put-8 - OBA cluster
-- 100% of Coati block evaluation area
-- 60% of Coati block exploration area
-- 60% Put-12 - OBA cluster
-- 50% Put-30 - Potential future tie back to OBA
-- 30% CPO-5
-- 100% Andaquies
-- 49.5% Tacacho - Potential future tie back to OBA
It bears mentioning that the portfolio reflects our
concentration on the Putumayo basin, with interests in seven blocks
where we have significant technical understanding, established
assets and operational capabilities which are first class. The
Putumayo, previously the area hardest hit by the activities of
guerrilla groups, is the area likely to benefit most from the peace
process in Colombia. In technical terms it also offers an area
which is very lightly explored, but whose potential is confirmed by
our success to date and the developments seen over the river in
Ecuador. I am very pleased, in advance of the final peace accord
with the Putumayo position which we have built at low cost, with
producing assets, excellent offset exploration opportunities and
the export infrastructure to render those assets highly profitable.
This is a unique and powerful position within the basin.
Production
First half production averaged 2,642 BOPD, rather lower than
last year as we have preserved reserves for the time when the OBA
pipeline becomes operational, which means we make an additional $11
per barrel of profit. We are currently producing approximately
4,500 BOPD and will ramp up in the second half as we bring some of
our shut-in wells into production and as new in-fill wells come on
stream. Additionally, on success in the northern step out well, we
will create a new production centre in Platanillo with an impact on
both reserves and production.
Colombia Ecuador OBA Interconnector Pipeline System
After some delay due to unseasonably wet weather in the
Putumayo, which resulted in severe flooding, I was pleased that the
OBA pipeline was completed and accepted by the regulatory
authorities in both Colombia and Ecuador in September. We are now
completing instrumentation checks, communication trials while
awaiting receipt of the decree permitting operation from the
Hydrocarbon Secretariat in Ecuador (SHE). The export point
certification from the Colombian Tax and Customs Authority (DIAN)
was received on 14(th) September 2016. Both these documents are
formalisations of previous inspections whose results were positive.
Assuming that the instrumentation and communication system checks
are acceptable to us, we expect operations to commence, with first
oil through the line in the days ahead. Initial transport rates
will be limited to approximately 1,500 BOPD, in order to allow
precise measurement of tanked volumes and adjustment of the dynamic
measurement systems, followed by ramp up to 5,000 BOPD in a matter
of days or weeks.
Platanillo Drilling
Drilling has again commenced on the Platanillo field for the
first time in over a year. We commenced drilling operations on well
Platanillo-8 on Pad 5 in the Platanillo field in June. Platanillo-8
was drilled using the Serinco D-10 rig. Platanillo-8 encountered
the reservoirs as per prognosis, and is currently producing from
the T sand, at 410 BOPD with a jet pump and a water cut of 3.0%. 27
feet of net pay was also logged in the U sand formation in this
well. The drilling, testing and completion of this infill well cost
approximately $4 million.
The Serinco D-10 rig is currently being moved to Pad 2N to drill
Platanillo-22 well. This well is a step out well to the north of
established production.
At the same time, the workover rig Serinco D-6 was rigged up on
Pad-5 in order to perform a recompletion of Platanillo-20. This
operation is a continuation of the work programme developed through
the various field studies performed over the last 18 months,
including the Schlumberger study and will look to enhance
production from the Platanillo license, for transport through the
OBA pipeline system. In Platanillo-20 the T sand, whose production
had dropped post a close in period in March, caused in part by
minor social unrest in the region, was isolated and the well
re-completed in the U sand. A short interval of 10 feet was
perforated with a very good result, and is producing 775 BOPD in
natural flow through a 32/64"choke with 0.5% water cut.
A re-perforation of the U sand reservoir in Platanillo-10 ST1
was performed independently of the rig, adding 156 BOPD from this
well.
Platanillo Exploration
The seismic inversion processing has now been completed and
confirms a strong development of the N sand within the Platanillo
contract area. The Company is currently designing an appraisal and
development plan for that reservoir, already proven and tested in
two Platanillo wells. The analysis of the seismic inversion data
indicates a large N sand potential within the Platanillo block
which will be appraised over the next years and should add
significant value.
Additionally, further understanding of the U and T sand horizons
has been achieved from the data, which offers additional future
drilling and reserves potential.
We look forward to the outcome of Platanillo-22 which we expect
in November, which will inform us of further exploration potential
within the block.
Acquisition
In January we announced the acquisition of Platino Energy
(Barbados) Ltd ("Platino"), a private company, from COG Energy
("COG") for a total consideration of $7.6million paid in Amerisur
stock. At the time, we replaced $1.7million of cash guarantees with
the Agencia Nacional de Hidrocarburos ("ANH"), relating to the
Platino assets and will have to pay a 2% net royalty per block to
COG, once net production in each block exceeds 5,000 BOPD. As part
of the transaction, we acquired tax pools of approximately
$24million which may be offset against future income and the
transaction adds 190 MMBO of unrisked resources to Amerisur's asset
base.
The strategic fit was clear to us given the location and
prospectivity of the blocks acquired. Some of these assets will
have access to OBA, ensuring lower transportation and
commercialisation costs.
The assets acquired through this transaction include:
-- 50% (non-operated) working interest in PUT-8 Block adjacent
to the West of Platanillo. Vetra Energia S.L. ("Vetra") holds a 50%
working interest and is the Operator. The block is currently in
Phase 1 of exploration.
-- 100% (Operator) working interest in the Coati Evaluation Area
(Temblon Field) within the Coati Block located in the South West of
the Putumayo basin. Canacol, after fulfilment of a carry in the
next exploration well of $2.7million plus other costs up to an
outstanding total of approximately $7million will be entitled to a
40% working interest in the exploration area of the block, which
does not include the Coati Evaluation area (Temblon field), which
will remain 100% to Amerisur. The block is awaiting an exploration
environmental license to advance the planned exploration programme.
A consulta previa with indigenous communities within the area is
currently underway.
-- 100% owned and operated Andaquies Block located in the north
east of the Putumayo Basin with a one well commitment by May
2017.
Putumayo-8
The Put-8 Block, adjacent to the West of the Platanillo field,
is in Phase 1 of its exploration period and has a 2% X Factor and
low work commitments of one exploration well and 208km(2) of 3D
seismic. The block has had limited exploration and is bordered by a
number of proven oil fields. Two drill-ready prospects have been
identified on the new 3D seismic, adjacent to the Platanillo field
and significant upside has been identified in the N sands adjacent
to the Cohembi field. The block has unrisked resources of 45MMBO
and is currently awaiting an environmental license to advance the
exploration programme.
After technical review, it is most likely that the PUT-8
Platanillo West well will be drilled as a vertical well from within
the Put-8 block. However, its production would then be tied back
into the OBA gathering system, hence accessing the better economics
of that evacuation route. Our partner, Vetra, which operates this
block is currently designing the forward programme.
Coati
The Coati Block, located in the South West of the Putumayo basin
and adjacent to the Loro and Hormiga oil fields and on trend with
the Charapa oil field in Ecuador, is in Phase 3 of its exploration
period with no X Factor and low work commitments. Seven prospects
and leads have been identified on 2D seismic with unrisked
resources of 79MMBO. Towards the southern end of the block, in the
Coati Evaluation Area (Temblón field), there is a proven
hydrodynamic trap in the Caballos Formation and a structural
accumulation in the T and U sands which have flowed oil and are
awaiting extended testing. The Temblón field is currently in an
evaluation period.
Additional prospectivity has been identified in the exploration
areas of block with the Nasua prospect drill ready and N sands with
stratigraphic potential in the North of the block. The block is
awaiting an exploration environmental license to advance the
planned exploration programme. A "consulta previa" with indigenous
communities is required by law in order to commence the long term
testing of these discoveries. Once it has been tested for six
months, some of the 16MMBO of contingent resources in the Temblon
field is expected to be booked as reserves. The extended well test
will commence later this year, in accordance with the advances made
in the social consultations.
In June, Amerisur signed a modification of the farm out
agreement with Canacol which increases the farm in participation of
Canacol from 20% to 40% working interest in the exploration area of
the Coati contract. The consideration for the farm in is a total
carry of $10.75million, of which $6.95million is outstanding in
favour of Platino Energy. Platino is operator of the Coati contract
and a wholly owned subsidiary of Amerisur Resources Plc, having
been acquired in January 2016 for a total consideration of
$7million. This carry will fund investments associated with
Exploration Phase III within the Coati block, and may be allocated
towards seismic and drilling operations. Subsequent to the carry
being satisfied, costs will be shared 60% Platino (Operator), 40%
Canacol.
Andaquies Block
The Andaquies Block located in the north east of the Putumayo
Basin has no X Factor and low work commitments of one exploration
well by May 2017. The block has multiple proven reservoir targets,
six mapped leads targeting both proven and novel plays and unrisked
resources of 66MMBO prospects both proven and unproven and sits to
the north east of a proven structural play within the Putumayo
Basin. The block's exploration environmental license has been
granted. The Company is currently reviewing the potential targets
for the next exploration well.
CPO-5
Alongside its partner ONGC Videsh (70% and operator), the
Company re-entered the Loto-1 well in the CPO-5 contract area in
Colombia. Loto-1 was drilled in 2013 prior to Amerisur's
involvement in the block, and discovered oil in the Mirador
formation, which was never successfully tested. Analysis of the
core and electric log data indicates 61 feet of net pay in the
Mirador formation and indications of mobile oil in the L4 zone. The
re-entry was intended to test that zone. The test results are
currently being analysed, but it is apparent that the initial water
cut shown from these zones is relatively high, with an average of
63%. Over 8 days of test, a total of 2,626 barrels of oil at 22
degrees API was produced. The reason for the water cut is under
review, and is most probably associated with the poor cementation
known to exist in Loto-1. However the presence of mobile,
producible oil of reasonable quality is very encouraging for the
Loto structure and the block as a whole.
Capital expenditure on the re-entry was approximately $300,000
net to Amerisur.
Amerisur acquired its 30% interest in the CPO-5 block as part of
last year's $6 million acquisition of Petro Dorado South America
SA, a subsidiary of Petro Dorado Energy Ltd.
Amerisur and our partner are currently planning to drill two
exploration wells on structures defined by 3D seismic in the CPO-5
block. The first, Mariposa-1, is targeting a lower Sands (Une)
objective which lies up dip of the Yatay-1 well and the Candelillas
field development in the adjoining Guatiquia block. Yatay-1
produced over 9,000 BOPD of light crude on test. The second, Sol-1
will target a fault bound structure and has Mirador, Guadalupe and
Une sands objectives. It is expected to drill these wells back to
back in early 2017.
Putumayo-12
Due to the 29% X factor on Put-12, which in the context of sub
$50 oil makes the economics less attractive, Company resources have
been focused on other blocks. Following extended social
consultations, and with the support of agreements made by
Government with local groups, the new 2D seismic programme is
expected to commence shortly.
Putumayo-30
We have an approved budget on the block for this year of
$200,000, which is being invested in local scouting and security
studies. Activity levels will remain low for the time being as
there are no time pressures on commitments.
Paraguay
In April, the Jaguareté-1 well in the San Pedro block within the
Parana basin in eastern Paraguay was spudded using the Quieroz
Galvao QG-1 drilling rig.
The electrical logs obtained in the exploration well, were
interpreted and initial analysis indicates the presence of oil
saturations within low porosity sandstones of the Lima and Santa
Elena formations. The company believes that the log data acquired
and the cuttings samples obtained are the first demonstration of
oil presence in the Paraguayan Parana basin. The reservoir quality
indicates that the accumulations at this particular point in the
structure and block are unlikely to be commercially extractable at
the current time. In the Lima sandstone, a total of 198 feet of net
sand was encountered, of which 126 feet demonstrated oil saturation
in excess of 50%, but with an average porosity of only 7%. In Santa
Elena, with 168 feet of net sand, oil saturations averaged 61%,
with the majority of sands demonstrating over 75% oil saturation,
but with similar porosity to the Lima formation. Observed
porosities within the same formations in Asuncion-1 and Asuncion-2,
drilled nearby by Pecten in 1982, exhibited significantly higher
porosities of approximately 20%. The well was drilled on budget and
safely.
The Company has now begun a technical programme, presented to
and approved by the relevant authorities in Paraguay, to study the
results of the well in order to determine whether the poor
reservoir quality observed is likely to be a regional
characteristic or more locally associated with the basement uplift
observed in drilling. Additionally, cuttings samples will be
analysed both for physical characteristics and an assessment of the
oil quality present.
The technical programme will involve the detailed analysis of
well data and samples and the reprocessing and reinterpretation of
the seismic data set. Field operations in the San Pedro block will
be suspended until the results of that study are fully known. The
Company will entertain farm-out discussions with interested
industry parties, now a working hydrocarbon system has been proven.
The well was suspended with 7 inch liner cemented in place, and the
drilling rig QG-1 has been released.
The challenge now is to define the geology encountered in order
to further understand the characteristics of the reservoirs, since
a higher quality of rock is usually required in order to produce
economically. While those studies are underway, which may take up
to 18 months to complete, the Company will restrict investment in
Paraguay and concentrate on operations within our core area of
Colombia.
Capex and Forward Planning
In March we raised $35 million to accelerate our drilling
programme to increase reserves and production such that the lower
opex per barrel delivered by the OBA pipeline can be leveraged
further.
The Company is using the proceeds of the Placing to supplement
its existing planned capital expenditure as follows:
Cost (US$m)
-------------------------------------- -------------
Coati 3D Seismic 12
------------------------------------- -------------
Platanillo North well 1 (step out) 4.5
------------------------------------- -------------
Platanillo North well 2 (step out) 4.5
------------------------------------- -------------
PUT-8 North Platanillo West well 4
------------------------------------- -------------
Coati Development well 1 5
PUT-8 South N Sand anomaly well 5
Total: 35
-------------------------------------- -------------
Financial Review
Production remained constrained in the first half of the year
prior to the OBA being commissioned and stronger netbacks being
realised. Average production for the six months was 2,642 BOPD
against 4,524 BOPD for the comparable period last year. There was a
modest improvement in realised oil prices during the first half of
the year to $35.7 per barrel from $34.45 in H2 2015 although this
was still substantially lower than the $50.58 achieved in H1 2015.
This had a significant impact on revenue which reduced to $24.4
million (2015 - $40.29 million).
The Company decided not to sell production at the end of
December when WTI was around $30 per barrel but rather hold it in
storage until prices recovered in the early part of the year. This
inventory has now been sold and inventory at the end of the period
reduced to 26,500 barrels (229,000 barrels Dec 2015).
Our non-cash amortisation charge reduced year on year to $4.4
million (H1 2015: $11.9 million) as a result of reduced production
and the impact of the change in reserves at the end of the
year.
Administrative expenses reduced to $7 million (H1 2015: $8
million) as the company benefited from cost control and the
devaluation of the peso.
At the period end, the Group had a cash position of $56.1
million and no debt. All commitments and planned discretionary
programmes for 2016 are fully funded and the Company remains
focused on efficient cost management. The Directors will not be
recommending payment of a dividend.
Reserves
Following receipt of an independent reserves report for the
Platanillo field as at 31 December 2015 undertaken by Petrotech
Engineering Ltd, using the standards set by the Oil and Gas
Reserves Committee of the Society of Petroleum Engineers, certified
1P (Proven) gross field reserves were 15.2 MMBO (2014: 16.2 MMBO)
after production of 1.62 MMBO during 2015 and 2P (Proven and
Probable) gross field reserves were 23.7 MMBO (2014: 24.55
MMBO).
Production during 2015 was 1.62 MMBO; after adjusting for 2015
production, 2015 reserves represent a small increase from year end
2014. This technical increase of the Expected Ultimate Recovery
("EUR") (a forward looking model which assumes a decline factor and
projects the volume of oil which will ultimately be recovered)
takes account of the successful Long Term Test of the T sands from
Platanillo-20 undertaken during the year. In addition, the reserves
have benefitted from an increase in the recovery rates per well
following the Schlumberger integrated study and the results of the
successful treatments of well Platanillo-14 and Platanillo-20.
During the period there were no reserve additions from the drilling
of new wells as no new development or appraisal wells were drilled
on the Platanillo field following the Board's responsible decision
in Q1 2015 to shut in unprofitable production and only spend in
risked capex what the production generated in cash flow.
The Board expects an increase in reserves once production ramps
up, which will happen gradually following the commissioning of the
OBA pipeline and once the much reduced opex per barrel comes
through from production going through the OBA pipeline. The
additional drilling activity on Platanillo this year, including the
two infill wells, one of which has already proved very successful,
and up to two wells from the northern pad 2N, which seek to extend
the field limits, together with the drilling of wells on Put-8 and
Coati and the Long Term Test of the Temblon discovery to the south
of the Coati block, should result in an increase in both 1P and 2P
reserves. It is worth noting that six months of Long Term Testing
is required before resources in Coati can be categorised as
reserves.
Summary and Outlook
In summary, much ground was made diversifying the portfolio and
gearing up operations for the commissioning of the OBA pipeline. We
have an active work programme in the second half and we are
expecting an exit production rate of 7,200 BOPD this year. The
peace process in Colombia, which is nearing completion is
particularly important for the Company, since it should facilitate
our operations in Putumayo and the country as a whole, thus
allowing us to rapidly realise the value of the portfolio we have
built in the area for all stakeholders.
John Wardle
Chief Executive Officer
14(th) September 2016
Condensed consolidated
income statement
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
USD '000 USD '000 USD '000
Unaudited Unaudited Audited
Notes
Revenue 24,410 40,290 61,201
Cost of sales (24,544) (38,710) (73,534)
Gross (loss)/profit (134) 1,580 (12,333)
Other administrative expenses (7,038) (8,081) (11,459)
Operating loss (7,172) (6,501) (23,792)
Net foreign exchange gains 1,268 602 1,230
Finance charge (947) - (2,767)
Finance income 96 91 191
Loss before tax (6,755) (5,808) (25,138)
Capital taxation (696) (313) (625)
Loss after capital taxes (7,451) (6,121) (25,763)
Income taxation (510) (306) (981)
Loss for the period attributable
to the equity holders of
the parent (7,961) (6,427) (26,744)
========== ========== =============
Loss per share - total
and continuing 4
Basic (cents per share) (0.69) (0.60) (2.51)
Diluted (cents per share) (0.69) (0.60) (2.51)
Consolidated statement of comprehensive
income
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
USD '000 USD '000 USD '000
Unaudited Unaudited Audited
Loss attributable to equity
holders of the parent (7,961) (6,427) (26,744)
Other comprehensive income:
Items that may be subsequently
reclassified to profit and loss:
Foreign exchange differences (679) 436 421
Total other comprehensive income (679) 436 421
Total comprehensive income for
the period (8,640) (5,991) (26,323)
========== ========== =============
Condensed consolidated statement
of financial position
30 June 30 June 31 December
2016 2015 2015
USD '000 USD '000 USD '000
Unaudited Unaudited Audited
Notes
Assets
Non-current assets
Goodwill 5 514 514 514
Other intangible assets 6 46,372 10,084 27,002
Property, plant and equipment 7 145,196 136,109 141,437
Total non-current assets 192,082 146,707 168,953
Current assets
Trade and other receivables 16,872 35,758 13,571
Inventory (crude oil) 993 1,248 6,958
Cash and cash equivalents 56,138 55,592 42,323
---------- ---------- ------------
Total current assets 74,003 92,598 62,852
---------- ---------- ------------
Total assets 266,085 239,305 231,805
========== ========== ============
Equity and liabilities
Equity
Issued capital 8 1,755 1,544 1,560
Share premium 8 158,473 109,070 113,555
Other reserve 12,003 9,132 10,979
Foreign exchange reserve 9,150 9,844 9,829
Retained earnings 45,859 73,752 53,723
---------- ---------- ------------
Total equity 227,240 203,342 189,646
Non-current liabilities
Remediation provision 2,742 7,350 2,730
Deferred tax liability 10,515 10,085 10,515
---------- ---------- ------------
Total non-current liabilities 13,257 17,435 13,245
Current liabilities
Trade and other payables 25,588 18,226 28,914
Current tax liabilities - 302 -
Total current liabilities 25,588 18,528 28,914
---------- ---------- ------------
Total liabilities 38,845 35,963 42,159
Total equity and liabilities 266,085 239,305 231,805
========== ========== ============
Condensed consolidated statement of changes in
equity
Issued Share Other Foreign Retained Total
share premium reserve exchange earnings equity
capital reserve
USD USD USD '000 USD '000 USD '000 USD '000
'000 '000
At 1 January
2015 1,544 109,070 7,060 9,408 80,179 207,261
Equity settled
share options - - 2,072 - - 2,072
--------- --------- --------- ---------- ---------- ---------
Transactions
with owners - - 2,072 - - 2,072
Loss for the
period - - - - (6,427) (6,427)
Foreign exchange
differences on
retranslation
to presentational
currency - - - 436 - 436
Total comprehensive
income - - - 436 (6,427) (5,991)
--------- --------- --------- ---------- ---------- ---------
At 30 June 2015
(unaudited) 1,544 109,070 9,132 9,844 73,752 203,342
Issue of Share
Capital 14 4,485 4,499
Share options
exercised 2 - (288) - 288 2
Equity settled
share options 2,135 - - 2,135
--------- --------- --------- ---------- ---------- ---------
Transactions
with owners 16 4,485 1,847 - 288 6,636
Loss for the
period - - - - (20,317) (20,317)
Foreign exchange
differences on
retranslation
to presentational
currency - - - (15) - (15)
Total comprehensive
income - - - (15) (20,317) (20,332)
--------- --------- --------- ---------- ---------- ---------
At 31 December
2015 (audited) 1,560 113,555 10,979 9,829 53,723 189,646
Issue of Share
Capital 194 44,918 - - - 45,112
Share options
exercised 1 (97) - 97 1
Equity settled
share options - - 1,121 - - 1,121
--------- --------- --------- ---------- ---------- ---------
Transactions
with owners 195 44,918 1,024 - 97 46,234
Loss for the
period - - - - (7,961) (7,961)
Foreign exchange
differences on
retranslation
to presentational
currency - - - (679) - (679)
--------- --------- --------- ---------- ---------- ---------
Total comprehensive
income - - - (679) (7,961) (8,640)
--------- --------- --------- ---------- ---------- ---------
At 30 June 2016
(unaudited) 1,755 158,473 12,003 9,150 45,859 227,240
========= ========= ========= ========== ========== =========
Condensed consolidated
statement of cash flows
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
USD '000 USD '000 USD '000
Unaudited Unaudited Audited
Cash flows from operating
activities
Loss for the period (7,961) (6,427) (26,744)
Adjustments for:
Finance income (96) (91) (191)
Tax - capital and income 1,206 619 1,606
Depreciation 4,353 11,921 23,860
Finance charge 947 - 2,767
Share based payment expense 1,121 2,072 4,207
Decrease/(Increase) in
inventory 5,965 (698) (6,408)
(Increase)/Decrease in
trade and other receivables (3,301) (1,991) 14,435
Decrease in trade and other
payables (3,314) (16,158) (9,668)
Net cash (used in) / generated
by operations (1,080) (10,753) 3,864
Income tax paid (1,206) (15,215) (10,314)
Net cash used in operating
activities (2,286) (25,968) (6,450)
Cash flows from investing
activities
Interest received 96 91 191
Payments for property,
plant and equipment (8,112) (12,727) (29,994)
Payments for intangible
assets (19,370) (1,869) (18,787)
Net cash used in investing
activities (27,386) (14,505) (48,590)
Cash flows from financing
activities
Finance charge (947) - (2,767)
Proceeds from issue of
equity shares 45,113 - 4,501
Net cash generated by financing
activities 44,166 - 1,734
Net increase/(decrease)
in cash and cash equivalents 14,494 (40,473) (53,306)
Foreign exchange differences (679) 436 -
Cash and cash equivalents
at the start of the period 42,323 95,629 95,629
Cash and cash equivalents
at the end of the period 56,138 55,592 42,323
1. The Company
Amerisur Resources Plc ("the Company") is principally involved
in the exploration for and production of oil and gas in South
America.
The Company is a public limited company incorporated and
domiciled in England and Wales. The address of its registered
office is Amerisur Resources Plc, Lakeside, St. Mellons, Cardiff,
CF3 0FB, United Kingdom.
The Company has its listing on the AIM Market ("AIM") of the
London Stock Exchange.
2. Basis of preparation
These unaudited consolidated interim financial statements are
for the six month period ended 30 June 2016. They do not include
all the information required for full annual financial statements
and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2015, which
were prepared under International Financial Reporting Standards
("IFRS") as adopted by the European Union ("EU").
The consolidated financial statements have been prepared under
the historical cost convention except for share based payments
which are valued at the date of grant.
These interim consolidated financial statements have been
prepared in accordance with accounting policies consistent with
those set out in the Group's financial statements for the year
ended 31 December 2015. These extracts do not constitute statutory
accounts under s434 of the Companies Act 2006 (the "Act").
The Company's consolidated statutory accounts for the year ended
31 December 2015 have been filed with the Registrar of Companies.
Those accounts have received an unqualified audit report and did
not contain statements or matters to which the auditors drew
attention under the Act.
3. Segmental reporting
Segment Reporting
Our management information system produces reports for the
Executive Board grouping financial performance under the following
business areas:
-- Colombia
-- Paraguay
-- United Kingdom
All business areas are responsible initially for the exploration
and evaluation of oil reserves and then the development and
production of oil wells. As permitted by IFRS 8, since these
business areas are deemed to have similar economic characteristics
and are similar, if not the same, in all of the following:
-- business areas derive their revenue from the supply of crude oil,
-- the production and distribution process is the same across all business areas,
-- business areas supply to similar customers,
-- all business areas are subject to the same regulatory environment.
The business areas have been aggregated into a single reportable
operating segment, namely oil exploration and development. Each
month the Executive Board is presented with financial information
prepared in accordance with IFRS as adopted in the EU and the
accounting policies set out in Note 2 of the Group's financial
statements for the year ended 31 December 2015.
In the period, two customers contributed to the majority of
revenue:
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
USD % USD % USD %
'000 '000 '000
Customer A - - 7,816 19 - -
Customer B 16,365 67 31,817 79 28,920 47
Customer D 6,169 25 - - 15,373 25
22,534 92 39,633 98 44,293 72
Geographical information
Non-current assets Revenue
6 months 6 months 12 months
30 June 30 June 31 December to to to
30 June 30 June 31 December
2016 2015 2015 2016 2015 2015
USD '000 USD USD '000 USD '000 USD '000 USD '000
'000
Colombia 172,286 138,290 161,253 24,410 40,290 61,201
Paraguay 18,641 7,292 6,912 - - -
United
Kingdom 1,155 1,125 788 - - -
192,082 146,707 168,953 24,410 40,290 61,201
========== ========== ============== ========= ========= =============
The revenue split is based on revenue by origin of supply.
4. Earnings per share
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
USD '000 USD '000 USD '000
Earnings for the period
attributable to equity shareholders
of the parent (7,961) (6,427) (26,744)
Earnings per share
Basic (cents per share) (0.69) (0.60) (2.51)
Diluted (cents per share) (0.69) (0.60) (2.51)
Shares Shares Shares
Issued ordinary shares at
start of the period 1,073,038,018 1,062,719,634 1,062,719,634
Ordinary shares issued in
the period 135,301,612 - 10,318,384
-------------- -------------- --------------
Issued ordinary shares at
end of the period 1,208,339,630 1,062,719,634 1,073,038,018
============== ============== ==============
Weighted average number
of shares in issue for the
period for basic and diluted
earnings per share 1,162,102,421 1,062,719,634 1,066,433,185
============== ============== ==============
The effect of outstanding share options is anti-dilutive.
5. Goodwill
The Group has goodwill resulting from past business combinations
as follows:
Goodwill
on acquisition
USD '000
At 30 June 2015, 31 December
2015 and 30 June 2016 514
The Directors have reviewed the carrying value of these
intangible assets and consider that no impairment is required.
6. Other intangible assets
Deferred exploration costs
The Group has made investments in deferred exploration costs as
follows:
PDSA* Platino** PUT- PUT-12 Fenix Other Total
30 - Paraguay
/ Ecuador
Share
of field 30%/49.5% 100%/50%/60% 50% 60% 100% 100%
$'000 $'000 $'000 $ '000 $ '000 $ '000 $ '000
Cost
1 January
2015 - - - 1,933 26,485 6,282 34,700
Additions - - - 520 - 1,349 1,869
1 July
2015 - - - 2,453 26,485 7,631 36,569
Additions 11,809 - 604 5,854 - - 18,267
Transfers - - - - - (1,349) (1,349)
31 December
2015 11,809 - 604 8,307 26,485 6,282 53,487
Additions 241 7,007 103 - - 12,019 19,370
30 June
2016 12,050 7,007 707 8,307 26,485 18,301 72,857
Accumulated amortisation
and impairment
1 January
2015 - - - - (26,485) - (26,485)
1 July 2015 - - - - - - -
31 December - - - - - - -
2015
30 June - - - - - - -
2016
========= ====== ==== ====== ========= ======= =========
Net book
value
30 June
2016 12,050 7,007 707 8,307 - 18,301 46,372
31 December
2015 11,809 - 604 8,307 - 6,282 27,002
30 June
2015 - - - 2,453 - 7,631 10,084
1 January
2015 - - - 1,933 - 6,282 8,215
--------- ------ ---- ------ --------- ------- ---------
The Directors have reviewed the carrying value of these
intangible assets and consider that no impairment is required.
* CPO5 block 30% and Tacacho block 49.5%.
** Andaquies 100%; PUT-8 50%; Coati 60% in exploration area and
100% in evaluation area.
7. Property, plant and equipment
Oil and Land Plant Office Motor Total
gas D&P and buildings and machinery and computer vehicles
equipment
USD '000 USD '000 USD '000 USD '000 USD '000 USD '000
Cost
1 January
2015 163,268 975 5,714 810 637 171,404
Additions 8,342 688 3,686 11 - 12,727
Disposals - - - - (9) (9)
30 June 2015 171,610 1,663 9,400 821 628 184,122
Additions 4,984 331 11,847 50 64 17,276
31 December
2015 176,594 1,994 21,247 871 692 201,398
Additions 1,235 7 6,854 16 - 8,112
Disposals - - - - - -
30 June 2016 177,829 2,001 28,101 887 692 209,510
========= =============== =============== ============== ========== =========
Depreciation
1 January
2015 34,250 299 1,053 329 170 36,101
Charge for
the period 11,347 20 435 60 50 11,912
30 June 2015 45,597 319 1,488 389 220 48,013
Charge for
the period 11,779 20 29 65 55 11,948
31 December
2015 57,376 339 1,517 454 275 59,961
Charge for
the period 3,544 25 430 252 102 4,353
30 June 2016 60,920 364 1,947 706 377 64,314
======== ====== ======= ==== ==== ========
Net book value
30 June 2016 116,909 1,637 26,154 181 315 145,196
31 December
2015 119,218 1,655 19,730 417 417 141,437
30 June 2015 126,013 1,344 7,912 432 408 136,109
1 January
2015 129,018 676 4,661 481 467 135,303
Oil and gas development and production assets relate to the 100%
owned Platanillo field.
8. Share capital
Shares Nominal Premium Total
Value (0.1p) net of costs
No. USD '000 USD '000 USD
'000
1 January 2015 1,062,719,634 1,544 109,070 110,614
30 June 2015 1,062,719,634 1,544 109,070 110,614
Issue of Share Capital 9,288,726 14 4,485 4,499
Exercise of share options 1,029,658 2 - 2
-------------- ------------- ------------- --------
31 December 2015 1,073,038,018 1,560 113,555 115,115
Issue of Share Capital 135,034,946 194 44,918 45,112
Exercise of share options 266,666 1 - 1
-------------- ------------- ------------- --------
30 June 2016 1,208,339,630 1,755 158,473 160,228
============== ============= ============= ========
GLOSSARY
BBL barrel of oil
------------------------------ ---------------------------------
BOPD barrels of oil per day
------------------------------ ---------------------------------
boepd barrels of oil equivalent
per day
------------------------------ ---------------------------------
EUR or Estimated Ultimate the amount of oil and
Recovery gas expected to be economically
recovered from a reservoir
or field by the end of
its producing life
------------------------------ ---------------------------------
MMBO million barrels of oil
------------------------------ ---------------------------------
OBA Oleoducto Binacional Amerisur
interconnector pipeline
between Colombia and Ecuador
------------------------------ ---------------------------------
Proved Reserves or 1P Proved Reserves are those
quantities of petroleum,
which, by analysis of
geoscience and engineering
data, can be estimated
with reasonable certainty
to be commercially recoverable,
from a given date forward,
from known reservoirs
and under defined economic
conditions, operating
methods, and government
regulations. If deterministic
methods are used, the
term reasonable certainty
is intended to express
a high degree of confidence
that the quantities 11
will be recovered. If
probabilistic methods
are used, there should
be at least a 90% probability
that the quantities actually
recovered will equal or
exceed the estimate
------------------------------ ---------------------------------
Proved plus Probable Reserves those additional Reserves
or 2P which analysis of geoscience
and engineering data indicate
are less likely to be
recovered than Proved
Reserves but more certain
to be recovered than Possible
Reserves. It is equally
likely that actual remaining
quantities recovered will
be greater than or less
than the sum of the estimated
Proved plus Probable Reserves
(2P). In this context,
when probabilistic methods
are used, there should
be at least a 50 per cent.
probability that the actual
quantities recovered will
equal or exceed the 2P
estimate
------------------------------ ---------------------------------
WTI the West Texas Intermediate
benchmark oil price
------------------------------ ---------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFFEFLFMSEFU
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September 15, 2016 02:01 ET (06:01 GMT)
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