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.

message from Martin
Geoff,

I am on holiday this week, as I am "on duty" between Christmas and new year.

We're waiting for an outcome on the third application, but I've seen nothing new.

Have a good Christmas

Regards

Martin

Latin American Oil & Gas Without the Drama?

By Stephen Clayson
19 Dec 2005 at 11:42 AM EST


LONDON (ResourceInvestor.com) -- The significance of the oil & gas endowments of many countries in Latin America is well known, but equally well known are the pitfalls that can in places await those who try to develop these endowments; Venezuela and the heinous spectacle of Hugo Chavez spring most immediately to mind, but Bolivia may to be heading in a similar direction, and various other states on the continent also have their political drawbacks.

However, Colombia and Paraguay seem to be among the better Latin American investment destinations, and these are the two states in which Chaco Resources [AIM:CHP] has built up an interesting portfolio of oil & gas prospects. The company was previously known as Gold Mines of Sardinia, but following its cessation of the activities implied by its previous moniker, it was renamed and refocused to become Chaco.




Colombia

The popular perception of Colombia is largely a negative one dominated by imagery of private armies funded by the proceeds of cocaine production, communist guerrillas, and pervasive violent crime. However, the reality is quite a bit tamer, and the investment climate in the country can be regarded as acceptable. Notable quantities of oil and coal have long been produced by European & American companies active in Colombia, and the gold explorer Greystar Resources [AIM:GSL; TSX:GSL], provides an example of a relatively small European company seemingly operating in the country without undue hassle.

Chaco is presently involved in two projects in Colombia, Alea and Puerto Lopez Oeste, with an application for a third project awaiting government approval. The Alea project is a joint venture with Spains Repsol and Ecopetrol, the national oil & gas company of Colombia, within which Chaco is required to spend $7.4 million in order to gain a 25% stake in the project. The reprocessing of pre-existing seismic data has mostly been achieved, and the companys next intended action is to test the project through the re-entry of one old well and the drilling of one new one.

The Puerto Lopez Oeste project is felt by Chaco to require some new seismic surveying in order to achieve the level of detail necessary to define drillable structures, and the company expects to have completed this by the end of 2006, at a cost of just over $1 million. Chaco will retain 54% ownership of Puerto Lopez Oeste, conditional on its funding of the seismic programme plus one exploration well, which should ensure that the company receives a greater share of any spoils that may be won than is the case with the Alea project.

Some news on Chacos application for a third Colombian project is expected shortly, and in addition, the company intends to be on the look out for further opportunities in the country. These may be derived from the existing contacts in Colombia of Chacos management, which have been gained through prior involvement in the oil & gas sector there.

Paraguay

The government of Paraguay is reportedly keen to encourage exploration for oil & gas within its territory, both because relatively little of this has taken place in the past and of course because the value of these commodities has risen fairly conspicuously of late, making the government mindful of the potentially positive impact on Paraguays economy of domestic oil & gas production.

Chaco has been granted two out of the three projects that it has applied for in Paraguay, and suspects that new seismic surveying of these two may prove illuminating of their potential. It is notable that in addition to having some domestic demand, Paraguay is well situated to serve gas markets in Brazil, Argentina and Chile.

The politics of Paraguay seem relatively conducive to the safety of any significant investment in it by Chaco, with influences as diverse as existing Taiwanese and Japanese investors, local Mennonite Christians and the governments strong relationship with the government of the U.K. all conspiring to keep the country on something of an even political keel.

Investment Outlook

Chaco undertook a placing some months ago in order to raise approximately 5 million with which to fund elements of its planned exploration programme, and this means that investors should be able to expect results from this work, good or bad, as 2006 progresses, perhaps with consequent effects on the companys share price.

Shares in Chaco have ascended in price fairly consistently throughout much of this year, and now stand at around 7 pence, after beginning the year at just over 2 pence and almost touching 9 pence in September. This may indicate that the market considers Chaco to be more or less fully valued at its current stage, taking account of the uncertainties inherent in oil & gas exploration and of the political risk innate, albeit at a relatively low level, to its countries of activity.

From their current valuation there is certainly potential upside in Chacos shares, though it is likely to be derived from positive exploration news rather than a growing awareness of the companys prospects, which seems to already be fairly comprehensive.

the market considers Chaco to be more or less fully valued at its current stage, 7p ?

aldwickk, think a few of us, including CHP's mgt. and brokers like WDBM would disagree with that valuation. The market has yet to catch up on this one, but it will eventually.

ssue of Equity

RNS Number:9811V
Chaco Resources PLC
20 December 2005


CHACO RESOURCES PLC

Issue of Equity



The Company announces it has issued 1,000,000 ordinary shares of 0.1 pence to
Expet S.A. as consideration for introduction services in Colombia rendered to
the Company. These shares are expected to be admitted to trading on AiM on 21
December 2005.

hmmm thanks for posting stewart

Sharesure
Do you think the 1 million shares means we will get the third application?

Actually, MPH, don't think those shares are likely to end up being sold at this stage. Expet know very well the prospects here, after they are party to alot of what is going on with other CHP TEA applications.
On a different company, I think CDS' drilling in Chaco basin in Paraguay has been successful but news on the extent of their oil strike will not be announced until the New Year, for both evaluation and timing reasons.

Sharesure, what a great move by CHP. By giving Expet some shares they automatically ensure Expet won't make a move that could be detremental to CHP's share price. It may only be 1m units, but a ten fold increase over the long term will net expet a nice return.

I think pretty shrewd by Expet - I wonder what they know - 70k worth of invoices - reduces cash flow to CHP (bound to have negotiated a discount for shares) and could potentially turn into 10 times that amount.

I think that is a really positive comment bein made by Expet.,

Sharesure
Why do you think the drilling has been successful-I hope you are right!

Should CDS drilling had been successful the sp would have moved, the delay is because of bad news they do not want to release yet.

nkirkup,

Cobblers! If they had bad news they have no choice but to release it, they
cannot keep price sensitive news await from the market.

cc.

Wrong nkirkup, if the drilling is unsuccesful they are obliged to inform the market immediately. If however the drilling is successful there will be a delay while the extent of the find is verified.

Think your both wrong, remember NOP, they delayed the bad news RNS.

"are obliged to inform the market immediately" i think the time limit is 24 to 48 hours, good or bad if it is price sensitive.

Some more buys coming in for CDS!

CDS are allowed to evaluate the results so that they do not give themselves a problem of later having to retract earlier ambitious claims (Regal Petroleum is still making everyone that much more cautious). If the well had been dry this would have been the week to release that sort of news since most investors are not watching events as closely as they will be after the Xmas/New Year break.

Remember target drilling depth reached on the 15th Dec, that's been 6 days now and no news.

Large volume on CDS today and good day for Chaco.