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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.

Topped up too today 100,000 @ give away price, before the real fun starts
Over 11million traded @ 16.00 hrs- something brewing ?

certainly massive volume - average is 2 million ...... but just because so many are traded does not per se mean anything significant ..... the same has been seen in the past with the likes of PXC.

for info, i attach a chart, though it certainly gives me no clue as to what might happen next, but then i only have a rudimentary knowledge, if that.

green line = 200 dma
red line = 50 dma

nite ram
I agree something is brewing with this volume it should have gone up more than 2.7%

Now up to, buy at 11.50 going north ?

Are we about to get some corporate changes/additions which have a proven track record/following?

What a struggle to get there.
2517

I,m excited about tomorrow.

Yes the sp was just beginning to loosen up a bit, could have done with another hour of trading.
2517

I will second that .

Someone out there with an extremely large mop ?
Aye, another hour would have been nice GEORGE
Other folk than us maybe thinking it's time to get
a foot into the starting block, 'cos this imo could
be a totally different story come 1st 1/4 07
Come on Cynic tell me i'm wrong again like buying
EME @ 38p and still holding- remember ?

EME ....... my strong advice would be to set a (tight) stop loss ..... remember, they have still found nothing and even if they do, it is likely to be several months before its viability can be proved, let alone get it out of the ground ...... in addition, i would refer you to my post 543 on that thread; the comment still holds ...... finally, remember that it is only when you have banked your profit that it will actually exist ..... even the taxman would agree!

CHP ..... see my post 1655 ..... says it all

OK- and I accept your view/ opinion, but as for tight s/losses in the case
of EME one just gets wipped out-- so I have none-- I take the gamble,
which is what it is ! One could say -fool for not skimming @ 88p when in
@ 38p,- but you see Cynic i'm greedy. So p/ls don't think I wish to take
a pop @ you, ( strangely enough, and actually ) I have a modest respect
for your opinion.
PS Q/ smell a burning type of smell ?--aye-- I smell it to- -shorters skirts
about CHACO alight LOL!!!
Nite Cynic

We all realise that this stock is speculative and don't need to be reminded every 5 minutes. What has happened though is that the probability of finding oil has increased with each award of the right to drill.

Remain patient for the next 12/24 months and the rewards could be substantial.

Cana petrolium is buying 3,000,000 chp shares.

oilyrag

Who are cana petroleum ?

Know of Encana a Canadian outfit.

They are based in Florida, small time operator whose sp has dropped over the last 6 months from $8 to $2 obviously looking for some other strings to their bows.

Strange old game init.
2517

Takes 15mil to go up 5% 1.5 mil to go down 5% the mind baffles!!!

Cana Petroleum has also been at the centre of a massive spam email campaign recently. I'm not saying the company is behind it - I don't know anything about them. But it means there is a lot of ramped "marketing" on the internet which should be treated with a Siberian-sized pinch of salt.

.