Amerisur is focusing on developing its contracts in Colombia, which has a well established petroleum industry with highly productive basins, yet remains relatively unexplored. The Company believes there remains significant opportunity to explore lower risk opportunities aiming to deliver significant medium term cash flows through focussed exploration in Colombia. Amerisur is currently interested in two projects – Platanillo and Fenix. It will continue to review new portfolio additions in Colombia that offer near to mid-term production opportunities that provide value for shareholders. The Company is Operator and has a 25% working interest in the block, alongside Ecopetrol (40%) and Repsol YPF (35%). The 14,204 hectare block is located in the Putumayo Basin, close to the Ecuadorian border and approximately 25km from the nearest town, Puerto Asis. The Platanillo block has existing contingent and prospective resources with the Alea discovery, and has been explored by three wells – Alea-1, the original discovery well drilled in 1988 and the two new wells Platanillo-1 and Platanillo-2, drilled in the latter part of 2007 by Amerisur and partners. Latest developments The re-entry of the Alea-1 well was successful in 2007, and the flow rate was tested with various choke sizes with an average production of around 130 barrels of oil per day through a 16/64" choke. The oil produced was delivered to the Santana terminal, operated by Gran Tierra Energy Colombia for export. In January 2008 the Company provided an update on its two new wells. Platanillo-1, the first new well in a two well programme, was drilled to a total depth of 8,390ft. The reservoir section was encountered 55ft deeper at the Platanillo-1 location which is located approximately 2,200m from Alea-1 and analysis of electric logs indicated that the well might be close to the transition zone between the oil and water columns of the field. Platanillo-1 remains a potential candidate for a subsequent re-entry and sidetrack to evaluate reserves up-dip of the current reservoir entry point. Platanillo-2, the second new well in the current phase of the Platanillo contract was drilled to a total depth of 8,578ft. The Lower U sand, which is productive in Alea-1 was encountered approximately 20ft higher than in Alea-1 and 75ft higher than in Platanillo-1. Good shows of oil were observed at that horizon and at several other zones within the reservoir. In this well the 'B' limestone, 'T' sandstone and 'U' sandstone zones were tested and all produced crude oil. A short test was performed in the 'B' limestone zone from 8,395ft to 8,402ft measured depth and produced crude oil at 21 to 32 degrees API with water cut of 2% to 30% at rates up to 450 barrels flowed per day (BFPD) through a 32/64" choke. Given the encouraging result, the deeper 'T' sandstone zone from 8,450ft to 8,455ft measured depth was tested. That test initially produced crude oil at up to 33.4 degrees API at rates up to 430 barrels of oil per day (BOPD) through a 22/64" choke, after which an increased water cut up to 70% was observed in the oil flow. The reasons for the increase in water cut are currently under review. Following those tests, both intervals were temporarily suspended to allow the lower 'U' sandstone to be tested. The lower 'U' sandstone was perforated from 8,295ft to 8,298ft. The well was flowed at a controlled rate of approximately 161 BOPD through a 16/64" choke before a pressure buildup period. The crude oil has an API of approximately 32 degrees and zero water. On the basis of these results, the Company and its partners presented a "Notice of Discovery" in relation to the new B and T zones to the Agencia Naciónal de Hidrocarburos, (ANH) the contract licensing body, together with a proposal for further evaluation of the block during an evaluation period. This effectively suspends the exploration commitments in the block, and allows the partners one year to study the results of the exploration effort. The results from both the new wells prompted a review of the structural interpretation, since it was apparent that the initial model was not completely accurate. Amerisur has now completed that analysis and this indicates that Platanillo-1 was located on the down-dip edge of closure within the Alea structure, and that significant further reserves potential may exist to the north along the Alea fault trend. Amerisur considers, and our specialist consultants agree, that an initial estimate of contingent resources in the structure, and those reserves developed by the 2 wells Platanillo-2 and Alea-1 requires a further period of testing, and as such we feel that we will be in a position to make those estimations early in 2009. Amerisur is optimistic about the potential of the Platanillo project, and has continued negotiations to increase our working interest. These have proven more complex and lengthy than we anticipated, however we envisage these will complete shortly and an update will be given at that time. In the light of the requirements of MME for the further production and testing of the wells, it was proposed that Ecopetrol pass the operatorship of the Platanillo contract to Amerisur. The partners agreed to this change and hence Amerisur has been awarded Operatorship of this contract. Amerisur began operations in the field during July 2008. We believe that this change will give us access to a reduced cost base and more flexible technical options for the future appraisal and development of this exciting project. In concert with our operations last year, we have succeeded in building the basis of a world class technical team within Colombia, a process which is particularly difficult in these days of high activity and shortage of trained, able and responsible personnel. Since February 2008 Amerisur has designed and commissioned the construction of suitable production, storage, treatment and export facilities for the Alea-1R and Platanillo-2 wells. This equipment is now complete, and is currently being installed at the Platanillo location. We expect to recommence the testing of the wells once the requisite regulatory approvals have been awarded. Our current operational plan is to produce the wells under natural flow for a period of approximately two months, followed by the installation of a hydraulic lift pump in one or both wells. This pump or pumps will allow us to investigate the behaviour of the reservoir at significantly higher production rates. The production facilities mentioned above have been designed to accommodate those higher flow rates. Progress to date •  June 2008 - appointed as Operator of the Platanillo contract; leading to greater operational flexibility and a reduced cost base. •  Jan 2008 – Platanillo 1 & 2 wells drilled; a Notice of Discovery was presented to ANH. •  Sept 2007 – Platanillo-1 spudded. •  April 2007 - Award of Platanillo environmental license, enabling the Company and partners to begin the upgrade of existing road and construction of 9km of new road and bridges. •  Dec 2006 - the Company announced in that ECP had obtained approval from the ANH to amalgamate years 1 and 2 of the E&P contract. This enabled ECP to plan and implement a logical operations programme, accommodating the new environmental requirements without resort to a helicopter-supported operation. •  Oct 2006 – announced that ECP had advised that it was actively investigating other rig options to the very expensive helicopter-supported operation that would be necessary to commence the re-entry and drilling programme before January 2007 (the end of Year 1). Recently imposed new environmental regulations had caused delays in environmental licencing of the access road and drill site and thus ECP was forced to consider a faster but more costly route to the site. •  Oct 2005 - the Company entered a joint venture with Repsol to exploit the Platanillo block, whereby the Company could earn a 25% equity share by farming into a project containing a discovery well (Alea 1) which had been temporarily abandoned in 1988, but which had flowed at 533 barrels per day. Amerisur's 100% carrying commitment was capped at $7.4m in order to earn its equity share (thereafter any additional expenditure is shared by the partners pro-rata to their holding) and involved re-entering the first well, building an access road and drilling a step-out well to determine the size of the field. In December 2007 the Company acquired, through its subsidiary companies, 100% control and benefit of the area. The 24,117 hectare area is located in the Middle Magdalena Basin of Colombia. The Middle Magdalena basin lies between the eastern and central ranges of the Andes mountains and has been a prolific producer of oil over many years with discovered reserves of approximately 1.9 billion barrels of oil and 2.5 TCF of gas in over 41 distinct fields. The Fenix Block is located in a thrusted section of the basin which is structurally complex, and is on trend with some of the most significant discoveries in the area. Recent renewed exploration success in the basin by other operators has been largely due to the application of modern 3D seismic technology and enhanced structural modelling techniques which have enabled the accurate mapping of complex structures. Latest developments The Company is currently interpreting the 103km2 of 3D seismic data acquired during 2007. An initial study focused on the southern part of the survey, which adjoins the Bonanza field operated by Ecopetrol and which contains the La Tigra wells has indicated some interesting opportunities. Other exploration leads exist within the block, which will be matured during the current interpretation process. Those leads may carry higher risk than the La Tigra area, but their reserves potential is also significantly higher. Given the range and quality of these opportunities, the Company, now with full control of the block can enter into advantageous partnering scenarios, which will simultaneously increase and accelerate the work programme in the block, while minimising cash requirements for the Company. Our intention, once we have completed our technical work of upgrading and defining our prospects, is to farm out at least one well within the block. Depending upon our final risk analysis, the Company may also decide to drill a low-risk well without partners. We expect that well or wells to be drilled during the first and second quarters of 2009. The fact that we have control of the block is of great benefit in seeking the best and most creative options for this tremendously interesting and prospective area. Progress to date •  Nov 2007 - Company acquired the entire issued share capital of Fénix Oil and Gas S.A. for a total consideration of US$4.3m satisfied in cash from existing resources to provide further 35% working interest in this area, increasing interest in the block to 83.75%. In addition, acquired from Petex Offshore Inc the remaining 16.25% working interest, giving Amerisur, via the subsidiary companies, 100% interest in the block. •  June 2007 – acquired 103km2 of 3D seismic data. •  April 2007 – announced under the new management team that it has signed a farm-in agreement with Fenix Oil and Gas SA to earn a substantial 48.75% interest in the Fenix Block.