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.

Just checked back and I can't find EK's comment to confirm. I did however see Tom Winnifriths comment in which he suggests if a big deal comes off then we are talking 100p+
One can assume that big deal is Primavera.

EDIT: Thanks for the confirmation re EK Sharesure.

mph, in plain english what are we assuming here, soory im new to this game so would weelcome your expert observations?

jameee106, we are assuming that chaco is granted the E&P licence for the primavera block (see Chaco Resources plc for details) and that the field contains approx 400m barrels of oil of which 50% are recoverable.

Ok so i assume that the possiblity of a licence is currently not factored in the sp and if a licence is granted were looking for sp equiv to what Tom Winnifriths is talking about? ie 100p.... What is the liklihood of a licence being granted?

Even if the market discounts to 1 I think we long term holders will be very happy!

Yeah if im right surely if it increases to 1 we all are happy? or am i missin a trick

There you go MPH, I am sure my friend will not mind me posting this :-

i asked simon cawkwell on another board his current views on chaco,his reply was roughly as follows,,,he picked up 2million shares in the last placing,at which time he was of the opinion[informed] that chaco had the potential to go to 2,he has not sold any,,,simon i hope you dont mind me posting this here,,,i hope sc will be a regular poster here once the chaco story starts to become clearer.once news on the 3rd field is released ,i think we can look forward to some steady news flow,leading up to chaco becoming a producing oil company by april,with some exciteing assets to test later in 06,07..

Thanks for finding that stewart!

I will be over tyhe moon if it gets to 1 - but that might take a while

mph

Sorry to be a damp squibb, but I think that a $10 - oil in the ground valuation at this stage - is too high.

I would start with $2 and then that would gradually increase that to the figure you suggest, and then higher, as the management prove themselves to be more than just deal makers; production in Alea begins.

Alfred

Thanks for updated calcs MPH

Alfred - I am no aexpert in these matters and bow to your greater knowledge. Looking at the actual share price - and recognising that Chaco completed a major marketing offensive just before Xmas with zilch results - I think your estimate is nearer the mark.

Thanks though to mph etal for updated calcs - helps to keep the adrenalyn flowing

30p sounds more realistic in the short term which isn't bad!

sounds a much more realistic price short term, which is still pleasant to be honest if people have bought at 6-7p, but there's nothing wrong with dreaming

I do hope that no-one would be nieve enough to expect a 100p+ price in the very short term. My calculations were not meant to be a short term price prediction! Mearly an idea of the asset value.
However I wouldn't want to be the one to rule out a three figure sp before next year.

alfred I agree regarding a "confidence discount" for the oil in the ground. I only used $10 per barrel as previously I have used $5 pb and after some research was advised from a contact in the industry that $10-$12 is more like the standard with the spot futures price at $60+

What the calculations do highlight regardless of the price used per barrel is how significant this deal is for chaco and also gives us some idea of the level a potential bidder may have to stump up at some point down the line should Chaco become a takeover target.

A perfectly satisfactory outcome I feel for holders would be for Chaco to do some testing on the fields, certify the reserve levels and then armed with that data approach some larger companies for a buy out deal. The timescale for that would be very short indeed.

Someone paying 7.25p for 136k units

MM's short of stock?

We are starting to see some movement, about bloody time, nice calulations MPH and Alfred,

Bit more activity on level 2 :- 2 v 2 Bid 6.75 Offer 7.1

SS

I have a feeling that we will be disappointed, after past experience, if we are expecting 55% . I think 25% is more likely.

Still, 25% of a lot of oil is still a result.

Remember management expected nothing.

The sp is still below what it was prior to Alea.

Alfred

I am very concerned that we might be building ourselves up to expect too much

too soon and am trying to be more realistic with my own expectations so that we

are not disappointed.

I am in absolutely no doubt that our patience will be well rewarded.

Alfred

Alfred
I agree we have to be sensible but do you have a target SP in mind given 25% is more likely?