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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.

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.

sharesure oct next week looks like ludlow3 was correct about news in october.

016622 looks like you were spot on

Instead of looking for news we oily holders should be fearing it if recent sp reactions are anything to go by. GOO can now be added to post 1288.
2517

dandruff getting worse...

good call 016622, its a case of how far down the shoulders the dandruff is going to fall.

true

absolutely nothing to worry about, if there was bad news people would be bailing out and that hasn't happened, in fact buys easily outweigh sells including the mm sells, rumour in the city is one mm has got wind of what is going to happen in next 2 weeks and is trying to get cheap shares, it's no surprise to hear that the broker concerned is evo!

YUFF,now theres a suprise

NOT SELLING MINE!!!

capetown & pisces, thanks, it was a good break; disappointed to see that no RNS's yet out but that it is only a timing issue in my view - what will be announced will be positive. Whether there will be another attempt by any MM's to get some cheap shares before the AGM I would have thought that that would be difficult unless some existing holders get bored because of the slowness of the news flow. My view of the y/e potential for the sp remains the same; those that stick with this stock will not be disappointed.
Tanker - ludlow3 may be right but I still think that any pieces of news from a number of projects are still as likely to come this week too.

they,re not getting mine either, but I'll have some more tommorrow if the sp drops further.

Sharesure. Your view on y/e potential sp is ? and justification would be nice

Thanks in advance

Peter

BKK2, In the past expressing thoughts on sp potential has always sparked off a load of posters with different and often negative views so until the AGM presentation has been made I'd rather leave that calculation until then. Meantime reference to Hardman's Review of CHP's assets, and the fact that they were being very conservative, should give you an idea that the upside possible on actual and prospective drilling in Colombia makes the current sp likely to be a fraction of the eventual sp with Paraguay in for nothing. If Petrobras make a strike in their current drilling programme there, then CHP's Paraguayan acreage will suddenly become sought after by others.

Thanks Sharesure,appreciate your reasons for not posting thoughts on s/p. Could I ask you then for your thoughts on time tables re Paraguay.I am a holder and hold probably hold more than I should,only time will tell on that one,I am thinking long term with these and feel I want to be holding until things start to happen in Paraguay expecting for the S/P to grow in mean time.if you have any information you feel you cannot put on the bb but are prepared to share in an E.Mail I would be very happy to hear from you ,my mail address is backinbangkok@gmail.com , no prizes for guessing where I am presently living.

Peter

BKK" - I take it you wont be coming to the AGM then ????

That put a smile on my face

Peter