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UPDATE 1-Amerisur Resources cuts capex citing oil price slump
February 2, 2015 / 9:12 AM / in 3 years

UPDATE 1-Amerisur Resources cuts capex citing oil price slump

(Adds analyst comment, details, share movement)

Feb 2 (Reuters) - Oil and gas company Amerisur Resources Plc more than halved its 2015 capital spending plan and temporarily suspended production from high-cost areas in its asset in Colombia, in response to the depressed crude oil prices.

Amerisur shares recovered from an early loss of 14.5 percent on the London Stock Exchange on Monday, after touching their lowest since June 2012.

The company, which has assets in Colombia and Paraguay, also said it had suspended its exploration programme in Paraguay until oil prices recover.

“This course of action should allow costs to readjust with Amerisur’s balance sheet strength providing this strategic flexibility,” Investec analysts said in a note.

Amerisur’s revised plans are the latest among oil and gas firms and energy services companies struggling with the sharp fall in crude oil prices over the last seven months.

The company now expects capital expenditure for the year of about $45 million, down from $95 million it originally planned.

Amerisur also deferred production from expensive pads at its Platanillo oilfield in Colombia as it waits for the completion and commissioning of a key pipeline in neighbouring Ecuador, expected in the first half.

“We have in effect deferred production of 500,000 barrels of oil; however, the deferment period will be less than 12 months,” Chief Executive John Wardle said in a statement.

The company plans to increase production once the pipeline is completed and exit 2015 with a production rate of 8,200 barrels of oil per day (bopd).

Production averaged 6,242 bopd in 2014, up 32 percent from 2013.

Amerisur shares were up 3.7 percent at 35.25 pence at 0908 GMT. (Reporting by Abhiram Nandakumar in Bengaluru; Editing by Gopakumar Warrier)

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