LONDON (AFX) - Chaco Resources PLC said it is proposing the reverse takeover
of two Paraguayan companies -- Amerisur SA and Bohemia SA -- from Candey SA and
Daniel Sztern in exchange for 27,322,404 new ordinary shares in the company.
It also plans to raise up to 750,000 stg before expenses in a placing of
36,585,365 new ordinary shares.
The company's shares were suspended on Sept 3 and it said it expects this to
be lifted today. It has called an EGM for Nov 15 to approve the acquisition and
placing plans.
Amerisur holds two oil and gas prospecting permits in Paraguay and is the
registered applicant for exploration and exploitation concession contracts over
the same permit areas. Bohemia holds registered applications for an oil and gas
prospecting permit in Paraguay and for an exploration and exploitation
concession contract over the same area.
The exploration areas covered by these three applications comprise a total of
approximately 48,000 square kilometres of the Curypayty and Parana Basins.
Chaco said these basins extend respectively into Bolivia and Brazil, where
commercial oil and gas production has been established for many years from
similar geological sections.

The drilling - or the results ?

bhunt, CDS is being watched closely by brokers since their activity in Paraguay - if successful - is bound to bring attention to the huge concessions CHP has in that country and which are ignored in the current sp along with much of their potential in Colombia. The third Colombian deal should apparently be known in the run up to Xmas. (Last estimate I heard for this prospect was 400m barrels of light sweet crude of which CHP might get 25% if they have to share or more if they get lucky on the allocation.)

bhunt, CDS is being watched closely by brokers since their activity in Paraguay - if successful - is bound to bring attention to the huge concessions CHP has in that country and which are ignored in the current sp along with much of their potential in Colombia. The third Colombian deal should apparently be known in the run up to Xmas. (Last estimate I heard for this prospect was 400m barrels of light sweet crude of which CHP might get 25% if they have to share or more if they get lucky on the allocation.)

SS - pardin my niaivity - when bodeng says that CDS are drilling today in Paraguay - does that mean that we might get a reaction today - or does it mean that having started - it will take x days, after which we might get a reaction. I assume the latter - but thought I would ask the noddy question?

Baza

.

CDS SPUDS FIRST WELL IN PARAGUAY


LONDON, England: November 29, 2005 - CDS Oil & Gas Group plc ("CDS"), the
AIM-listed oil explorer (CDS.L), is pleased to report that it has spudded its
first well (CDS-GM-05-5001) in the Chaco region of Paraguay.

The well is located 200m southeast of the Independencia 1 well drilled in 1993
on the Gabino Mendoza block which was in turn a re-entry of the Mendoza 1-R well
drilled by Pure Oil in 1959. The well was spudded on November 25, 2005 and CDS
expects to reach a planned depth of around 1,600 metres in about 20 days of
drilling. The primary objective is an oil-bearing zone between 1,500 metres and
1,600 metres, identified by CDS through its interpretation of seismic reports
and the logs of previous drilling operations.

A production test on the Independencia 1 well was performed by CDS in March 2004
and flowed natural gas at rates up to 960 thousand cubic feet per day ("mcf/d")
through a 22/64" choke from a Carboniferous sand (the "Independencia Pay") at
600 m depth. The gas was dry with 94% methane and no sulphur.

The new well will evaluate Carboniferous and Devonian sediments to the initial
planned depth of 1,600 metres. Below this level there may be a potentially
large gas play which CDS may seek to drill at a later date after reviewing the
results from this first well.

SS - I guess CC has answered my question above

Bhunt, think so! Surprised that news has come in so quickly. Graeme Stevens (at the AGM) reckoned that the area is very promising from an oil exploration viewpoint. Looks like he is going to prove his worth to Chaco.

I agree Sharesure, Graeme Stevens' expertise is a real asset to the company.

Sharesure
25% of 400million barrels in the ground seems to add 1 per share to the SP-do you agree?

bodeng

It has proved difficult/disappointing to work out what the share price should be/where the share price ought to go after each announcement.

We are yet to make that eyecatching announcement that makes others take notice.

The share price with what has already been announced, should be between 13p and 28p a share, according to Martin Groak.

To give oil in the ground a value of $1 a barrel is pretty conservative if you think that it will probably be worth $20 a barrel profit at the well head.

If they can secure anything like a 25% stake in a 400 million barrel field then the share price should be 50p+ and then still be attractive to the value investors.

A 50p share price would mean a market capitalisation of approx 250 million.

alfred

Jeff, that's way to high for "in the ground" oil based on the current number of shares in issue.

IMHO, I'm not sure Martin Groak (as the FD of a quoted company) would have been as irresponsible as to make a written statement to a PI recommending people to buy shares and giving a valuation?

I also think that in the past continual wishful thinking by PI's on BBs has only resulted in disappointment, disillusionment and SP drops. Let's not get carried away again on pure rumour.


WDIK, PDYOR.

camlad

camlad

I agree entirely, especially your last point. And I have been very guilty of that in the past.

alfred

A poor start to the day given the potential!

If anyone wants more detail on how Martin Groak came up with the 13-28p range I will send it to you-geoff.boden@ntlworld.com

Bodeng, I think the drift in sp will be short-lived. I would expect MG and co-directors to commence some PR/institutional meetings at some time soon, and certainly before Xmas, perhaps to coincide with the third Colombian application. I have seen the same sp range as you have; this stock will get there in time and do more. I've just recently bought a load more and think that this might/ought to be one of RHPSG's 5 top oil stocks which they are about to announce.

SS,

Sorry for the question but can you explain for a novice what the RHPSG is and when they will be announcing their top stocks?

Thank you

cc.

CC It's Red Hot Penny Share Guide run by Tom Bulford. Each week he sends out an email with updates + for those that subscribe to his tip sheet (monthly, I think) he gives a run down on what he reckons is worth buying. As for his success rate - from what I can tell he does better than many of his competitors although, like all of us, he is capable of having an off day! I received an email recently stating that he was about to give his selection of the best small oil exploration stocks. I would expect CHP to be one of the short-list, plus possibly CDS and VOG. I rate CHP to be the best of those three but then having just bought more I would.

Sharesure hi,i posted a few days ago stating that in my opinion the shareprice would go as low as 6p without any news,which has been a common support level.Whats your thoughts as id`e like your opinion.Cheers.

pisces, it's probably obvious to many that I don't think this share is going lower; having recently upped my holding quite substantially I do expect that confidence to be rewarded over the next few weeks. It's only my opinion that this could be the 'Cairn' of South America but having recognised the last Cairn at 30p, watched it go on to become a FTSE 100 stock and only recently sold it, I am now hoping that the ingredients are there for CHP to have the potential to at least copy Cairn to some extent. Guess it would be too much to hope for the same amount of oil and gas to be discovered, but with early cashflow from Alea 1 to fund other exploration in Colombia and perhaps, more significantly, in Paraguay who knows.
Good luck to you if you get back in at a lower sp, I just wouldn't bank on my chances of being able to buy cheaper than current levels as I do think the sp is already at a very significant discount. All in my opinion, so you take your choice!