______

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.

Grayhound wrong stock mate we`re after oil not gold. Only joking , hope your right.

If anyone wants to browse the latest annual report, here's the link:

http://miranda.hemscott.com/ir/chp/pdf/Chaco_Annual_Report_2006.pdf

pisces

you must have been on the phone at the same time as me, no wonder they didn't want to sell me 150k, eventually got them later.

pisces - i am probably very thick but i do not see any major resistance at 16 .... that said, the shares have had a pretty strong run of late and arguably will need something solid if the momentum is to be maintained ...... if there is some genuinely good news (like what?) then i guess we could see the all time high of 18 being challenged, but at the moment this is all wishful thinking

A girl like me listens to strong opinions and sharesure has my full support and attention.
He seems to be aware of what is happening and I am happy to follow.

I have spoken to the company and am advised everything is going according to plan-3rd paraguay block 2D seismic commenced on primavera and othe things leads me to believe that we are well on track for bigger and better newsflow.

At long last I can plan to make an appointment with my plastic surgeon tks to CHP.

GTC X

cynic hi, last time we failed to breakout from 16p on 5th june this year it gradually fell back to 10.25p on 25th july. Maybe major resistance was a bit of a harsh term
but once through that barrier we`re nearly back to historical highs for chaco and with constant good news and a steady market 20p must be on the horizon soon. To come through the holiday season relatively unscaithed is a major plus for chaco and you only have to witness the 50% rise since the 25th july to appreciate why sharesure and many others are bullish on this stock. If they find large quantities of oil or even a sniff of them through seismic activity god only knows where the shareprice will end up. As mentioned in a previous post best to buy low and sit on them for 2 years minimum.

long-term you may well be right ..... only time will tell ..... meanwhile, it is likely that the short-term news will be nearly all about prospects rather than actualities - and don't forget that a very high % of holes turn out to be dry.

before anyone starts jumping all over me for the wroing reasons, please register that I do hold this stock!

got some info regarding annual report to me inbox when I opened it late yesterday
evening but not gone through to link yet.

cynic, I take your point but I am very confident on news to come out and also don't forget the first hole they will drill is Alea, previously drilled and flowed 533 barrels a day, the oil has not gone any where, all they have to do is unplug I think it was a 200M cement plug and there you have it. Abanded in 1988 as oil was only $11 a barrel, have not re checked dates but about then, looking good

thanks for that useful information Stewart ..... perhaps i really am too cynical ... lol!

Next week should be a good week.

having doubled my (small) holding in the last week, I hope so

bodeng

you say that every week, although you were right on the button last weekend let's hope you are again this weekend.

YUFF
Lets hope so -we could use another one as good!

Haven't been at work today, but just thought I'd check in as I see the hardman update is out - strange as no one seems to have picked up on it yet...will have to double check I'm not mistaken. Looks a promising update to and as most of us are expecting.

http://www.hardmanandco.com/Research/monthly/Monthly_Sept_06.pdf

Hi Greyhound, it's been noticed on other boards.

Nothing we didn't already know or guess at but good to hear it from someone else.

Hardman has alluded to some of the news items queueing up; suspect that the logjam will be cleared in a week or so and then we'll have an eventful run-up to the AGM.

And there was me getting excited...

Lets hope all the news comes out a bit at a time so we can buy more at a reasonable price.