______

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.

Uponthel... Hope you do not mind but I also pasted your excellent post on ADVFN on MPH's CHP thread.

UTLD

Thanks for that, i was only surmising about Ecopet, my money is
still on us buying Expet, we still have to get that office in Bogata!

M

UTLD-sounds like a profile of my chin.

Found this on http://www.24horaslibre.com/economia/1167327384.php
version on Livingiperu.com has disappeared.

"the negotiations (of ECOPETROL) with this company, that already it is exploring in this lot, could conclude in the first trimester of the next year, because they are advancing favorably", it said to Javier Moors

article dated 28/12.

Petrolera colombiana Ecopetrol explorará en selva peruana

La petrolera estatal colombiana Ecopetrol planea invertir cinco millones de dólares en 2007 para buscar crudo en las selvas de Perú, en sociedad con una empresa que ya opera esa zona, informó este jueves la prensa local citando a funcionarios peruanos.



Cambiar tamaño


"Las negociaciones (de Ecopetrol) con esta empresa, que ya está explorando en este lote, podrían concluir en el primer trimestre del próximo año, pues están avanzando favorablemente", dijo Javier Moros, gerente de Exploración y Desarrollo de Negocios de Perú en declaraciones publicadas por el diario El Tiempo.

Según el informe, Moros indicó que desde hace ocho meses Ecopetrol "está evaluando las posibilidades de un lote, ubicado en la cuenca del Marañón muy cercano a la frontera con Colombia y, de concretarse, la petrolera colombiana invertiría cinco millones de dólares en el primer año". La cuenca peruana del Marañón es una de las regiones con mayor presencia de empresas que exploran hidrocarburos.

Ecopetrol y su similar peruana Petroperú están a punto de suscribir un acuerdo para impulsar una sinergia en fases de exploración, de explotación de gas y petróleo, gestión comercial y biocombustibles entre las dos compañías.

Petroperú busca solucionar los problemas de abastecimiento energéticos de Iquitos, principal ciudad de la amazonía peruana, que se halla a más 3.000 kilómetros de la más cercana refinería peruana (Talara, costa norte) mientras que la de Barrancabermeja (nororiente de Colombia) y la de Manaos (noreste de Brasil) están más cerca.

Actualmente Colombia produce 530.000 barriles diarios de petróleo, de los cuales 320.000 los extrae directamente Ecopetrol, en tanto que los restantes 210.000 corresponden a las extracciones de las multinacionales asociadas.

(Agencias)



trans tx to Altavista
Oil Colombian ECOPETROL will explore in Peruvian forest Oil state Colombian ECOPETROL glides to invest five million dollars in 2007 to look for crude in the forests of Peru, in society with a company that already operates that zone, informed last Thursday the local press mentioning Peruvian civil employees. To change size "the negotiations (of ECOPETROL) with this company, that already it is exploring in this lot, could conclude in the first trimester of the next year, because they are advancing favorably", it said to Javier Moors, manager of Exploration and Development of Businesses of Peru in declarations published by the newspaper the Time. According to the report, Moors indicated that for eight months ECOPETROL "he has been evaluating the possibilities of a lot, located in the river basin of the Marañón very near the border with Colombia and, to take shape, the oil Colombian would invest five million dollars in the first year". The Peruvian river basin of the Marañón is one of the regions with greater presence of companies than they explore hydrocarbons. ECOPETROL and its Peruvian similar Petroperú are on the verge of subscribing an agreement to impel one sinergia in phases of exploration, of operation of gas and petroleum, commercial management and biocombustibles between the two companies. Petroperú looks for to solve the power problems of supplying of Iquitos, main city of amazonía Peruvian, that is more to 3,000 kilometers of the nearest Peruvian refinery (It destroyed, North coast) whereas the one of Barrancabermeja (nororiente of Colombia) and the one of Manaos (northeast of Brazil) they are more close. At the moment Colombia produces 530,000 daily petroleum barrels, of which 320,000 extract ECOPETROL directly, whereas rest 210,000 correspond to the extractions of the associate multinationals. (Agencies)

Great stuff. Implications for CHP shareolders?

The implications are that Ecopetrol are approaching the Maranon area from the Colombian side which will require metalled roads. We, in Alea, are only a short distance from the main arterial highway. I have heard 30kms. A road of sorts already exists leading to Alea. Many cross-border roads exist in the region. All they need is tarmac to make them useable all year round and not be subject to difficulty, resulting from heavy traffic in the rainy season. Alea is in the same area!
If Ecopetrol are intending to explore this 'new' area then Ecopetrol must have advanced plans to lay the said tarmac and they have backing from their own Govt, and Army, to get the job done!
We have a known quantity of oil in the Platanillo/Alea well and that quantity could be increased dramatically, once they complete the step-out well, as will in turn our share of the spoils. What more can I say? I am reluctant to say more presently. Those informed posters close to action will understand my hesitance in speculating further on the relevance of all this. We are getting a road! What happens on a grander scale in greater Maranon remains to be elaborated upon. What more can I say?
I await further announcements.
DYOR!!

Uponthelowdown - Brilliant posts over the past month mate! I share your optimism regarding Alea and look forward to the rest of the year! Keep up the excellent posts, pleasure to read a well informed post!

100 thousan @12.25 tick up soon?

Uponthedown,Sharesure,BRILLIANT posts THANKYOU

OUT of 12p at last!!

Uponthelowdown - excellent posts - I hope you do not mind - but I have copied your translation and your interpretation across to another BB. If a problem - then let me know and I will delete

Regards

over 60m mkt cap. what production levels do chp have?.

im interested but can someone tell me what av.bopd is?. apologise for research but quicker to ask holders.

lizard

None yet, 3 licences in Colombia to explore and 3 in Paraguay.
1 Licence in Colomia has been drilled years ago with oil flowing at
550 bopd but was capped, we will reopen it soon.
2nd licence will be drilled in Fen/March drilling contract signed

Thats ebough for you to buy!!

M

Lizard - checkout Sharesures excellent summary at the head of this thread

cheers chaps for the advice. some cash flow would be useful to support value. will wait a bit may miss the boat but?.

Excellent day today.

lizard, there are a few things you are not picking up on this. Sure, there is no production yet but Alea is not only a certainty (it already flowed oil in the past) but I think you will find the timing and share of CHP's take may change for the better very shortly. Up to you if you wait on the sidelines - I haven't and wouldn't.

Looks like another good start to the day

13 is my lucky number and I feel it coming on ;)

Investors wait patiently for Chaco Time

A busy 2007 could breath life into Chaco's share price after a pretty disappointing last year or so. The Latin America based oil explorer plans to start drilling on 3 projects, Platanillo,Peuto LopezOeste, and first up the Primavera prospect in Colombia. But the company admits that it may have to be flexible, with neither the timing nor the drilling logistics easy to predict.

In the meantime, with no revenues as yet, losses widening for the 6 months to end of September going from 380k to 590k.

However Chacos management remain convinced that 2007 will be the watershed that its investors are hoping for, a year in which it should make the sizeable transition from pure explorer to a producing company.

Shares says: a breakthrough is on the cards but further patience is required for now

.by Steven Frazer (Shares Mag)

Good start to the day.