Amerisur provided the following update on operations in Colombia.

Platanillo Contract Production Performance As reported previously the production enhancement program in the wells Alea-1 and Platanillo-2 has been successful. Despite down-time caused by mechanical failures and other issues on the Oleoducto Transandino, the oil pipeline running from Orito to the Pacific port of Tumaco, production has been maintained and continues to deliver 550 BOPD. Oil sales generated a net US $1.14 million during September 2010.

Expansion of Production Facilities The Company has brought forward a significant part of the production facilities expansion, previously planned for mid-2011. This expansion includes the installation of a further 3,000 bbl of production tankage, a water evaporator system and additional piping to ensure the system can flexibly handle production from various sources. The evaporator system uses natural gas from the production process, which is normally flared, to evaporate produced water, thus reducing the volume which has to be treated before disposal. Besides being environmentally responsible, this will have a positive impact on installed water handling capacity and also help to reduce operating costs in the future. The first two 500 bbl tanks are now at location and rig up is continuing. The remainder of the equipment will be installed in the coming weeks, without impact on production.

3D3C Seismic Acquisition Program The seismic program is progressing to schedule. It is expected that the recording of data in the southern section of the data volume will be completed during November, with well locations identified in time for drilling early in 2011.

Fenix Contract - Iguasa-1 As reported previously, the Company has designed and applied a number of chemical treatments to the reservoir intervals under test in Iguasa-1 over the past months. Those treatments were successful and indicated a reduction in formation damage with an associated improvement in near-wellbore permeability. Subsequently the Company performed a series of sustained drawdown tests with a hydraulic lifting system. A pressure build up test was then recorded with down hole gauges. The data from these tests were analyzed by a specialist consultancy, Fronterra Geosciences, and the initial results were received in early October.

The analysis indicated that the perforated intervals have now been cleaned up and demonstrate a near zero skin factor. However it also indicated an abnormally low effective permeability when compared to Isabel-1 and other offset wells in similar formations. The reason for this is as yet unclear and further analysis is required to resolve this conflict.

During this test, oil was produced intermittently at rates of up to 30 BOPD from the entire perforated interval. These rates, whilst confirming that we have achieved a technical success with this discovery, do not yet demonstrate that oil can be recovered at commercial flow rates from this part of the structure.

The results of this recent work underline that Iguasa-1 is drilled into a very complex structure. That complexity needs to be better understood in order to define the technical work required to increase productivity and also to determine the locations and objectives of potential further wells in the structure.

Isabel-1 The latest phase of testing at Isabel-1 has demonstrated a gradual decline in production levels to approximately 30 BOPD. The operating parameters of the mechanical pumping system are now being adjusted with the objective of increasing and stabilizing production. The Company is currently refining the operating cost structure to ensure economic operation at these production levels. An important technical conclusion from this stage of testing is that the reservoir quality at this level is good, displaying excellent permeability and porosity.

The Isabel discovery was not predicted on the original pre-drill prognosis, and was encountered while drilling Iguasa-1. The play had been previously identified in the block from seismic interpretation, but had been mapped as commencing further to the north. The Company is currently evaluating the geological model to assess the potential extent and continuity of this trap, in order to define the potential for further wells to drain the currently producing reservoirs, and the possibility of adding further productive intervals at the level of the Isabel discovery, through an optimized design geometry in future wells.

Tags: Amerisur Resources Plc