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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.

Bo - well, I am sure that if a Feb drill were announced officially - along the lines of "earlier than expected" - things would be a tad more lively. Perhaps the mgt. just don't think it is significant enough to warrant "news" or they are waiting for a firm date.

It was not me that just bought the one MILL @12.25,come CYNIC own up???

Ok sharesure it was you was it???

i'm dumb but not that badly so! .... 60k is more than enough for me of this sort of speccy/spivvy stock

well cynic if youre dumb,i have no chance

you say that though i sort of called IMR wrong .... they are still 6.75/7.75 but none traded at all ...... actually, i still think you are well out

Cynic,i am glad i am out too,could have made 50%,am sure it will come down,

Looks like we are breaking out of this boring 12p range,sudden activity something brewing?,come on CHP

bit of a tight chart as you will see below ...... resistance at 12.5 and likely to be more when 200 dma hit at about 13.25 ..... that said, some strong news could make such resistances academic

Hoping for another good day Friday.

sharesure - u referred to city folk, would u mean BC by any chance? im sure he has a good following! i truely believe we are on a steady rise to 16p at least, prior to drilling! things are looking up and although it has taken about 9 months longer than i expected we are looking like we are in for a very nice year!

all the best

ps do u by any chance work in the city??

Robbi,
Re City folk getting involved, I think that BC knows the particular person very well and thinks that they have a good track record. Apologies for seeming cryptic about what I think is about to happen (but it should be for the good!!!).
I too am hoping that the drilling action now about to take place is really what should have happened a year ago, although the delay has only increased the potential outcome since in addition to Platinillo CHP now has PLO and Primavera, and will likely add more Colombian blocks to these 3 very soon.

Re your ps, I did but haven't for 5 years.

SS - thanks for the reply, you have mail (or at least, you should have if i have the correct address)

SS
What are you expecting tomorrow in terms of volume?

Platinillo, PLO or Primavera. Which is to be drilled first?
Anyone with an informed answer please.

Re Expet, if we were to one day takeover Expet we would be working with Gran Tierra again:

Mecaya


(Current) Participation Gran Tierra (Operator) 15%, MCP 55%, Expet 30%
Area 74,128 acres
Non-Producing exploration acreage
The Mecaya Exploration & Exploitation contract was signed June 2006.



Kirk - Primavera first:

Our overall plan to grow the business remains unchanged. Although execution to
date has been slower than we had hoped, we remain confident that we will have a
busy and successful 2007, starting quite probably with Primavera. As soon as the
drilling schedule gets underway, there should be a regular flow of news.

http://www.advfn.com/p.php?pid=nmona&cb=1168551951&article=18535868&symbol=L%5ECHP

robbie123 thanks for your reply. That would be my take on the situation as its in black and white i.e an official release states contract has been signed. However it states late 1st quarter i.e March.
I have heard that some reckon Alea will be drilled first but if that was the case why amalgamate years 1 & 2. Unless drill first and road later? But surely if the road follows later then the more expensive rig would be required - which supposedly was the reason for the amalgamation in the first place!
If PLO was to be drilled first then a contract would have to be signed and better infrastructure in place than the former two.
I suppose like the rest I will wait and hold. Only two and a half more months for Primavera which really isnt that long at all.

Gran Tierra have said they are drilling Primavera in Feb

kirk - they have stated that all wells will be drilled in the first half of 2007! as pil says Gran Tierra have announced that they will drill Primavera in Feb :

http://www.newswire.ca/en/releases/archive/January2007/10/c4480.html

Not sure if PLO needs more infrastructure than Alea, it is much closer to Bogota and main roads. I would be patient and wait for further news, there could be a few surprises in store....

DYOR etc etc

Kirk, there is an outside chance that Alea may yet be drilled first, but Gran Tierra are hoping to drill Primavera in Feb. ie earlier than the CHP RNS. But there is always a risk on drilling dates.
Alea drill date is I think linked with other activity which I hope is going on in the background.
Looking for a 'majestic' rise again in the sp today!

I am note sure what majestic means in terms of , but it sounds good.