______

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.

Sorry if this is a repeat - but a write up in Shares mag. today says

"Chaco Resources, the uk independent tapping prospects in Colombia and Paraguay, is pressing ahead by unveiling the start of a second phase on its Peuto Lopez Oeste block exploration programme in Colombia, having processed and studied seismic data at hand.

merry Xmas to all chaco holders, keep the faith, should be an intriguing year ahead

A good start to the day- a drilling contract next week would be great news.

Ask and it shall be so....

RNS: Rig Contract Signed

Strawbs.

love it,
happy new year to you shareshure

Capetown, Thanks, and Happy Xmas and New Year to you too. Now await announcement that PLO and Alea are to be drilled ahead of Primavera, along with some other developments maybe? Qtr. 1 2007 starting to look more promising.

Not a great deal of activity considering contract news - we know the SE is on a half day but perhaps many havn`t even bothered to come in this morning. Marry Christmas and a Happy and profitable New Year to all CHP holders (hold your nerve if an when it takes off)

i read drilling was supposed to start in january now it may be end of march?.

Nice to get some news before Xmas.
Primavera is just a line in the sand which may be swept away by several other bits of news.
Alea is just waiting to be opened up and can happen 'within three weeks of any announcement'. Plus other very interesting news here regarding capacity and slice of action. I will not elaborate but it may turn into very nice New Year surprise.
Puerto Lopez has entered second phase and is easily accessible. Alea-Platanillo is a bit of a 'sleeper' in many respects
Petrobras is on verge of making an announcement about success in hunt for gas in Paraguay. Should hear something +ve in first week back.
Chaco have several positive bits of other news on immediate horizon for 2007.
Have a bright and cheery Xmas because the New Year is going to be great.
Roll on the year of the Chaco.

and thanks to all the other highly informed participants here..

Lizard - think that you will find that CHP is building in a bit of slack in case a prior drilling contract delays the rig getting on site. That would be sensible. If all goes well, I still hope/reckon their drilling will comence in the middle of February.

Uponthe... Agree with what you are implying; Alea and PLO may well surpirise us all yet. Hadn't heard anything about Petrobras though... hope that you are right.

Good News

Chaco Resources PLC
27 December 2006





27 December 2006

(AIM:CHP)

CHACO RESOURCES PLC

('Chaco' or 'the Company')

SUCCESSFUL CONCLUSION OF NEGOTIATIONS WITH ANH

-AMALGAMATION OF YEARS 1&2 OF PLATANILLO E&P CONTRACT

Chaco Resources, the oil and gas explorer in Paraguay and Colombia announces
that Ecopetrol, the Operator of the Platanillo Block in Colombia has obtained
approval from the ANH to amalgamate Years 1 & 2 of the Platanillo E&P contract.
This amalgamation was sought due to new environmental regulations in Colombia
which had caused delays in environmental licencing for the access road and drill
site which would have resulted in the Operator not being able to complete the
Year 1 work obligation by the anniversary date of January 10th, 2007. The
amalgamation of Years 1 & 2 now requires that the re-entry of Alea 1, the
drilling of Platanillo 1 appraisal well and the drilling of a second appraisal
well need to be finished before the end of the second permit year on Jan 10th,
2008.


Technical Director Graeme Stephens said today 'This ruling is good news for the
joint venture as it will now allow the Operator, Ecopetrol, to plan and
implement a logical operations programme that accommodates the recently imposed
environmental requirements for site access, without having to resort to the very
expensive helicopter supported operation which would otherwise have been
needed to try to meet the timing deadline. Early Joint Venture meetings are
planned to review the Operator's new timetable for the re-entry of Alea 1, the
drilling of Platanillo 1 and the drilling of an additional appraisal well, and
details will be released as soon as this timetable is finalised.'

Another building block.
Important part is the finalisation of the drilling timetable; expect that to be pushed into this January/Feb. if at all possible to provide cashflow for other drilling.

sharesure- cheers. long term play anyway but short term getting rigs in s america is not at all easy.

and that is why investing in the likes of PFC makes such (obvious!) good sense

.

Nice rise yesterday.

Over the weekend some figures to ponder:

Premier Oil : mkt cap 995m; 33,000 b/d output and 160m barrels reserves. Don't know where it is working or its costs or tax liability, but unlikely to better Colombia at the moment.

Also, from memory as I have temporarily lost the note I made:

Tullow Oil: mkt cap 2.6b; 70,000 b/d output and 105m barrels reserves.

Hardman Resources: mkt. cap 580m; output 6000 b/d and 30m barrels reserves.

Suspect that we could end 2007 with 20-30,000 b/d output but reserves appreciably higher than any of the previous w/o taking into account any new acreages in Colombia (and there are certain to be some) and Paraguay.

HAPPY NEW YEAR!!!!

SS .... i am a holder but not remotely as bullish as you about CHP; have far more money in the likes of BUR and TLW which are "proper" producers with proven track record

I agree if we can get a figure of 5 or 6000 bopd with 100M barrels in the ground, then the comparison with the likes of Harman would be very realistic!

Bear in mind that Tullow have just paid 89p per share for Harman. So all
we have to do is strike oil in one of our licences and bingo!!!!!
That would still leave us with the remainder of Colombia and all
of Paraguay

"Platanillo Chaco 25%), Primavera (Chaco 55%) and Puerto Lopez Oeste (Chaco 54%). We expect to be drilling wells in all three blocks during the first half of 2007 but at the time of writing there are still a number of uncertainties over timing.
starting quite probably with Primavera. As soon as the drilling schedule gets underway, there should be a regular flow of news."



Prosperous NEW YEAR!

M

Platanillo 25% ML?
I think more like 60%! Wait'n'see. Oh and it's 100m barrels minimum. Drilling? Possibly by first Tues in Feb!?. Educated guess!
Have a great New Year.
Chaco intend to!

I'm off out to give it an early start.

Speak to you next year!