______

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.

Its looking like the Express was a little premature?

Maurel et Prom win a block in Colombia
http://uk.biz.yahoo.com/060919/323/gmj7a.html

is it my imagination, or are announcements from CHP rather slower than they should be? ..... on the basis that bad figures take far longer to add up than good (qv HML whose latest and positive RNS came earlier than expected), should we be getting concerned

No I don't think we should be concerned. On the contrary a "no" comes quicker in my opinion.

Copy of email from Chaco.



I''m not aware of any bad news around the corner, and I spoke to my colleagues only this morning after the Independent comment came out. We have no clue as to what they are alluding to. As far as we''re concerned, we are still on our last reported track.

In Colombia, we have a fully funded programme of appraisial and development drilling at Platanillo / Alea, a fully funded exploration programme at Puerto Lopez (seismic) and a fully funded programme at Primavera, including a drilling programme for two wells; and all scheduled to be completed by the end of quarter 1 of next year, with drilling starting later on this year.

If you look at the Hardman report, which is completely independent and understandably conservative, they point out that
a) oil revenues should start in the first quarter of our next fiscal year (year commencing 1 April 2007), which will obviously positively impact our capacity to do even more
b) their upside valuation of Primavera alone is 1.20 per share, if our strategies are successful and
c) the upside should improve as we acquire more data on Paraguay.

Paraguay is currently about seismic re-interpretation and acquiring our third licence. Again, everything is on track - it is work in progress. I cannot comment on timing on the third application, but there is quite a lot of activity at the moment.

You mentioned my optimism. This centres around a couple of things: the first is the quality of the team, who have demonstrated their ability to build a business of great potential in a very short time (and one reason for commissioning an independent report was to confirm the substance of our endeavours). The other is because we have actually improved our position since the share''s high point. When we originally went after Puerto Lopez Oeste, we were looking for a 10m barrel play. It was not there, but the seismic reinterpretation has so far uncovered something at least three times as interesting.

Again, all this is contained within Hardman''s document. It is on the website (www.chacoplc.com), or I can have a hard copy sent to you if you give me your address.

cynic - there is a lot of seismic data to look at, amongst other things, which I hope will be the subject of an RNS (or two) before the AGM. I am sure they just want to get it right. I would be surprised if Hardman flagged up pre-AGM announcements in their latest update if there weren't going to be any.

tuttle - just for the benefit of others who don't know: I believe that email is a few weeks old. But there is nothing to suggest that the message behind the content has changed, of course.

Hmm! Starting to wear my cynical look but will probably hold until AGM where CEO had better come up with something rather more convincing than, " .... if our strategies are successful ...... the seismic reinterpretation has so far uncovered something at least three times as interesting."

Not very convincing so far!

News tomorrow would be welcome.

bodeng---------newsflow is required for small oil co's, and we all await CHP news with bated breath, I just hope that when it does arrive the market perceives it as good news, look what happened to VOG, SEY and now SER when the 'good news' finally came out.
2517

What bad weather

Good start to the day.

what's so good? ..... up a minuscule 0.25p or that the deluges of the weekend seem to have given up at least for the moment

very nasty head and shoulders brewing...
a break through 13 now could bode ill

more tea leaves tomorrow!

016622, if yer dandruffs that bad go see a doctor!

You won't be bothered with dandruff on your collar - since you've got no shoulders - just a pointy head!

01662

it can be any shampoo you want as long as those institutions keep on buying in 50k chunks!

agree, and as long as the price goes north, which is the whole point of this game.

Don't get concerned at the minor fluctations in sp - in 10 days time the AGM will have taken place and prior to that there is certain to be an RNS on various of the projects - there has to be or else they cannot say it at the AGM.
My particular wish list is:
a) A range of outcomes for each of the existing Colombian blocks.
b) Firm news on drilling dates for each of the three areas in Colombia.
c) News on additional blocks in Colombia and their significance to existing areas.
d) News on Paraguayan Bohemia block acquisition.
e) Estimates of Paraguayan potential guaged from the recent seismic studies.
f) News of strengthening the Board with more local based executives (Perth is too far away in my view)
g) News of the identity of a new broker/analyst with specific expertise in understanding oil exploration companies.
h) Comment on the activities of neighbouring competitors where those activities may assist CHP to know with more certainty what its potential is likely to be.
i)Timetable for realising the value of the company and estimates of take out sp.

Shareshure,

Down to 12.5 i think then will top up for more and pray,

hope you enjoyed your break

Welcome back sharesure, any views on why the price has dropped so much today or is it just a shake out before what we all hope will be good news.