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UPDATED 22/1/07

Valuation of Chaco Resources : 'Rule of Thumb' based on 550m shares and using 10% DCF on oil at $60/barrel is 1p on the sp for every 1m barrels (CHP's share) that is proved. Until oil reserves are proven the 1p/1m barrels will be discounted by the market.

Chaco Resources now has three exploration blocks in Colombia and three areas in Paraguay. The next year should see a steady news flow as it establishes the companys transformation from being an exploration company only to also becoming a significant oil production company. Set out below are some of the milestones which should produce announcements and have a positive effect on the share price. All reserves are quoted in recoverable oil assets.



Alea, Colombia :

25% interest in a field currently assessed at holding 38.1m barrels of light sweet crude oil. Drilling of the field by the operating partner, Ecopetrol, was programmed for 2006 to provide early cash flow, but a shortage of drilling rigs, then the rainy season and increased environmental requirements have caused a re-think and it is now expected that this block will be drilled in first half 2007.The proposal to drill a step out well as part of that drilling programme will also provide the opportunity to establish if the estimate of recoverable oil should be increased. (Some estimates suggest the field contains as much as 70m barrels.)

RNS : Updated w/c 30/4//07. Drilling contract should be imminent but actual drilling unlikely to take place second half 2007.



Puerto Lopez, Colombia :

54% Interest in a field containing light sweet crude oil.On 3.10.06 CHP announced that the original TEA area had been extended by the ANH to include further territory which it is expected will greatly increase the potential to find and exploit a structure which may contain as much oil as there is believed to be in Primavera, where Hardman and Co estimate that there is a potential value of 120p per CHP share.

RNS :Updated 22/1/07. Further seismic now obtained and decision not to proceed made because closures too small to be economic and drilling funds earmarked for this project now being retained for use on a more prospective block yet to be announced



Primavera west, Colombia :

55% interest. Two shallow drills in April turned out to be dry. Areas adjacent to this block contain oil (Cana Limon, also in the Mirador basin, the largest oilfield so far, 1.8b barrels) Chaco believe that the area in their block contains the thicker end of a wedge shaped oil-bearing sandstone structure; the area to the east in the neighbouring block has been estimated as containing 400m barrels and the El Miedo oilfield, 8 kms.away has 325m barrels. ANH Contract signed w/c 8/5/06 (1 week sooner than forecast). GED are drilling their neighbouring block in February 2007; two of their targets may contain oil deriving from Chaco's area so some earlier cash flow may result.

RNS : The drilling programme has now been completed but the company has yet to say whether the block will be explored further or abandonned.

New block announced in April known as Tigra in the Magdelana Basin. CHP has a 48.75% interest. Believed to be very promising but company is doing 3-d seismic over the next 18 months with drilling projected in the following 16 months. (Timescales seem to be set to allow a lot of room for delays or speeding up if progress is easier than anticipated)



Curupayty Block, Paraguay :

1.39m hectares in north, close to Bolivia. Two wells previously drilled and both showed oil.

RNS : Expect partnership with larger producer.



San Pedro Block, Paraguay :

1m hectares in south-east. Previous drilling showed oil.

RNS : Expect partnership with larger producer.



Parana Basin, Paraguay :

Canindeyu block covering 1,789,000 hectares. Bordering Brazil. Oil field on Brazilian side already drilled. Chaco also expect to find oil and, at a deeper level, considerable quantities of gas. Chaco has obtained valuable historic seismic for re-evaluation.

RNS : Presidential Decree received 2/11/06.. Petrobras has announced its intention to increase substantially its effort to exploit Paraguay's hydrocarbons and has announced a farm-in on CDS's adjacent block. Possibility that they or another major will do likewise with CHP



Corporate Activity :

CHP obtained an independent evaluation of their exploration assets by Hardman and Co., during July 2006.This is updated monthly. As Chaco Resources line up their assets ready for production they may attract a bid. There are also other actions that the mgt. could take to increase the Chaco's asset share subject to negotiation since the position of the Colombian state oil company, Ecopetrol, is believed to be under review. Other actions could be taken which would have the attraction in bringing more resources to bear on a quicker timeframe plus help streamline the management of their assets. De-merging the Colombian and Paraguayan assets at an appropriate time might hold out some advantages to shareholders at some stage.
Last Placing announced at 15.1p per share on 18/5/06.
Chairman and FD bought shares 8/06 and the Chairman recently exercised his option on further shares which would suggest that he regards the share price to be going north from here on.
Updated 22/1/07.




Here are some dates for your diary courtesy of KJKelly, who posts on ADVFN

1. Curupayty - complete reprocessing of seismic by end July 06
2. Curupayty - complete interpretation of seismic by end August 06
3. Curupayty - decide whether to proceed to drilling or proceed with a farmout campaign - end September 06
4. Platanillo - commence re-entry of Alea 1 early in 1st quarter 2007
5. Primavera - two structural targets will be selected from 10 potential targets for drilling commencing Feb. 2007.
6.Hardman updates should now happen monthly.

short problems will be preent with chp, initially it will take a period of time before any decent news is available from CHp

they have found oil wait till next week.

who says? ... perhaps they just went to the local garage

cynic, Alea has already flowed in the past; the only issue now is whether there is more up to the spill point and whether it can flow at a greater rate than the first hole showed when it was drilled and flowed unaided at 533 barrels/day.

being very frivolous today ...... late Spring!

One step forward, two steps back lately!!!!!!!
Think we need some of this newsflow we keep getting hints about.

oil would be better dibs!

Frustrating.

:O(

Relax, just summer doldrums and Fridays in particular.Current weakness is on pitifully low volumes so means zilch. The items for newsflow between now and the year end is substantial and drilling results in particular will change this situation overnight when these come through.

Yep, Relax !

I agree, it's so easy to get cheesed off when, (as most of us do) we watch every movement on a daily basis, and when that movement is not blue, watching for a day can seem like a week-----chill, patience will be rewarded, hopefully.
2517

Very true, I think I'll just go to bed now and get up at xmas, that should do it.

As Jon Pither's and Nicola Brooke's recent purchase's are now in the red, has anyone reassured them?
We wouldn't want them to panic.

"For years I used to watch the prices change for about 9 hours a day and then I realised that this did not generally affect the outcome."

Courtesy of Alfred - printed above my screen.

Just picked up another 50k can only see upside now-need the money for my daughters wedding-which is now off :(

better she walked away before the event than after

Tell her to never get married.......Cost me 52K yesterday to get rid of the ex......but I still managed to keep CHP & GOO shares......so I'm happy I suppose.

should have given her the sharees and kept the money!

Newtrim, that's expensive for a hit-man - or did you just have her drive off a cliff in your Jag?

gail
at least she's not marrying Charlie!

Amities / Merely an observation but hardly music to the ears of the CHP board that EEN who are far more expirienced and learned & been operating in Columbia forwhat seems an age that 3 of the latest wells were abandoned as "non commercial " ..EEN lost 29p and CHP 0.75 in sympathy. ........One POSITIVE point is that my latest trusty Alexander O/G connections tell me CHP have indeed "booked" a SINGLE modern rig suitable for both wells in Q4 . Good news indeed when the rotary count ,excerbated by the volume of so many workovers, is near full capacity Even decommissioned rigs are being refitted ,,,,,,,,,,,So much so that China has began construction of a flotilla of rigs and FPV s ,,,,,,Rigs will ultimately prove a bottleneck in the system until universally addressed ,,,,,,@+ J