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Share tip of the week, 21 January

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Helal Miah, investment research analyst at The Share Centre, picks small oil and gas exploration firm, Amerisur Resources, as his share of the week. Here’s why;

The outlook for Amerisur Resources for 2013 looks positive with several wells expected to report promising drilling updates in Q1. The company confirmed in its December update that its Platanillo field in southern Columbia is on track to produce 5,000 barrels of oil equivalent per day (boepd) at 2012 year end.

Production is increasing at a rapid rate and the company has made significant progress in recent years, turning exploration projects into productive assets. Amerisur Resources expects to build on last year’s performance and net margins are anticipated to be in the region of 45%, helped by the fact that the company has no debts on its books.

We believe the company offers good growth potential for those investors willing to accept the higher degree of risk. Amerisur Resources operates in a potentially unstable region so investors should expect volatility and as it is a small company geared towards growth, investors should also be aware that it is very unlikely to pay a dividend for some time.

All information given including prices, yields and our opinion is correct at the time of publication.  Our opinions on investments can change at any time and for our latest view please go to www.share.com.  To understand how our Advice team arrive at their views please read our Investment Research Policy.

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