______

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.

cheers 2517

re ecopetrol:
http://www.businessweek.com/ap/financialnews/D8M01T1G1.htm

Chaco Resources PLC
14 December 2006


AIM: CHP

14 December 2006


CHACO RESOURCES PLC
('Chaco' or ''the Company')


CHACO ANNOUNCES APPROVAL
FOR SECOND PHASE PUERTO LOPEZ OESTE


The Directors of Chaco Resources Plc (AIM:CHP), the oil and gas explorer and
developer in Paraguay and Columbia are pleased to announce that the Company
will be entering into the second phase of the exploration programme of its
Puerto Lopez Oeste block in Colombia. The decision follows the processing and
interpretation of seismic data obtained so far, and will lead to the drilling of
at least one well at the earliest practicable opportunity.

The Operators, Expect S.A.and Consultoria Colombiana S.A. are already in
discussion with suppliers regarding rig availability, but will only be in a
position to finalise this when the drill site has been identified on conclusion
of seismic interpretation.

Chaco is earning a 54% equity interest over the Puerto Lopez Oeste Block in the
Llanos Basin, east of Bogota.

Graeme Stephens, Technical Director, commented 'There are two interesting leads
in this block, the Metica Sur and the Santaya (formerly referred to as Metica),
and we are looking forward to receiving the feedback from the recent seismic
acquisition programme in order to identify the best drilling target'.


-Ends-

More news to come pre-xmas in my view since this is little more than a progress report and doesn't actually give drill dates for PLO.

Sharesure
Not much time left before Xmas!

Very encouraged to see all the small sells being soaked up with just 2 or 3 large buys each day

Another big buy this am,and blue for christmas would be nice chaco,

remember last time we hit 10p,it started its climb to hit 17,could we be heading back?,and sit there on anticipated rig news?,then the long awaited push to 20p

Capetown, Still believe that some rig news will come this side of Xmas with much more news on that and other matters in January. As for the sp, the current market is not very generous towards expectations, it seems to need proven results before producing any significant reaction.

Sharesure/Capetown
Encouraging start to the day.

bodeng,VERY!!!

it wont hold !!!

baza you have mail

bhunt1910,
not really bothered if it does not hold,am in this one for the longterm.

I'll lay money on news of tarmac being laid for all-weather access to Platanillo/Alea, or whatever they call it these days. Lay money? I already have! Will that news come with the announcement that they have improved their position in regards to Alea/Plantanillo?
Primavera and Puerto Lopez have taken on the focus but I think we may see an unexpected sling-shot effect here. Primavera drilling news is almost a foregone conclusion and I expect a firm date within the elastic reasoning used in the petro-chem world for assurance anyway. Something like rigs are expected to be on-site at Alea/Primavera/PLO(delete as appropriate), or indeed add, by 1st week of February and drilling at Platanillo and Primavera will take place by end of Feb with step-out well in Alea drilled after original off-centre 'tap' is accessed and unplugged.
These dates and locations are flexible obviously. Primavera will get drilled soon and will be a good 'un.. I just have an intimation that Alea may leap-frog the lot given certain provisos and a few breaks....like encouragement from Colombian Govt in form of ANH guarantees and re-arrangements all worked on our behalf by the boy genius Wardle. Unfair to elaborate here as there may be delicate negotiations going on. And ayway it is complete speculation on my part...
Alea is like an unfancied runner at a northern course who has lost form and been out of sorts chewing grass in a back paddock for a while, coming from the back of the field to pip the favourite at the post..or something like that. As always we shall have to wait and see..how long? soon imo.
It will be a good Xmas and a better New Year!

Jim - many thanks - but not sure I can commit right now - but thanks anyway

Uponthe... re Unfair to elaborate ... think that you just did!! What you are 'speculating' about fits with a number of things that have been surfacing over recent weeks. Think the delicate negotiation period may have been passed now. Add in some corporate moves early in 2007 - some maybe in January - and that is why staying with this stock is likely to prove exciting very early in 2007 - and doesn't everyone need it after such a flat 2006?

sorry SS, but will believe it when i see it ...... Q1 for some good news would be nice, but this share (and most other E&Ps) is certainly very unexciting at present

Lull before the storm.

Perhaps news is close- a lot of detail given above.