______

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.

Sharesure
Will you explain on the other bb about the liquidity problem it may explain why we can't keep the SP up.

At present the same small % of shares are being traded between private investors on a daily basis.
The large share holders - the holders with 75% of the share capital are not trading. It would not pay them to buy or sell in quantity there are simply too few buyers or sellers.
Market Makers earn money by creating volume share movement. With the limited true volume of shares available they create maximum volume by trading on the hopes and fears of the few.
Move the share up the hopers buy in - take the price to the artificial resistance point and sharply move down.
At this point those who hoped for the big pay out turn fearful and sell only for the next set of hopefuls to buy back in at an artificial support.
This state of play exists because the price of this share in the eyes of the small investor is based on rumour. The large investor has faith and sees the picture.
The support and resistance levels in CHP's case is market maker based. There are not enough buyers and sellers to set true market support and resistance lines.
The trade pool has become very shallow and to create the maximum volume has become more volatile.
When company making news arrives the new influx of small investors / day traders / short term investors will create a demand far exceeding the pool share. Price will rocket towards the consensus sell valuation of the majority holders.
Thats why I'm waiting for the market price and not the makers.

Happy to hold for that news !!

Sharesure hi,things are starting to move at last after what has been a fairly static market for chaco over the past few months. It makes me laugh when people spout on about how badly this company have performed recently i.e.12 month period,yet the shares have still doubled. If possible i would like to put a few questions to your goodself and for you to answer them in your honest opinion, of which most on this thread truly value.

1. In the unlikely event of a takeover before any oil is found what price would you value chaco at?
2. In the very likely event of chaco discovering oil in the next 6 months what value would a takeover then be worth?
3. You mentioned that someone wanted to buy your shares,is this legal ?
4.In your own mind and after the many hours research you have carried out for the benefit of others,where do you see chaco going in the next 12 exciting months,or as many believe do you think there will still be a chaco?

Kirk- very interesting post. Thanks alot.

Pisces, flattered that you may think I can answer your questions, but here goes:
1. Theoretical in my view but if a pop was made at the company now it depends how easily swayed are the top 20 shareholders; I would have thought that the biggest - ex WDBM - would take a lot of persuading as many there regard this stock as having massive potential within a reasonable timeframe.
2. If oil is around $60/barrel at the time then maybe 2p on the sp for every 1 million barrels (CHP share). As for oil's current price I do not think that it will stay at current levels but a more likely range is $60-65/barrel - but others will have their views.
3.It was a comment made to me that a US based outfit was querying who they could buy a significant block of shares from. My view is that they are likely to be too late and I doubt that any further funds raised by CHP will come other than by bank borrowing from now on.
4.My hope is that CHP reach a stage around the middle of 2007 where they hive off Paraguay into a separate (and longer term entity) and then, assuming that the drilling is as successful as it is thought it is going to be, maybe in the latter part of the year CHP Colombia will attract a bid. It seems to be the view of many oil analysts that there will be a lot of bid activity this year as the smaller explorers are gobbled up

why all the selling today.

All isn't ALL. When you consider the times of 18p and 40M trading days this is just a dribble. Should it really justify much concern?

To put it into perspective, it's c50k's worth of sales.

to save you all looking back ...... 25 and 200 dma shown ..... 12.5 is proving to be a very stubborn resistance

Exactly any markdown at present is just a way for the priviledged few to collect a few more shares. This in my opinion will reach 18 -25p before first drill results.
It will suit everyone.
And buys of 500!

Very quiet at the moment.

Having focussed my attention over the past 2 nights on a selection of relatively new oil and gas companies, the variation in their market caps is what can only be described as staggering.Some of these companies are only producing betwwen 500-2000 bpd yet there share prices range between 8p and 70p.Although i currently own a sustantial amount of chaco shares and have been as frustrated as anybody over the past 6 months i now know why i made the decision to invest in the first place. If chaco can deliver 2-5000 barrels per day over next 6 months on just one of their wells,what price then people?

pisces

If chaco can deliver 2-5000 barrels per day over next 6 months on just one of their wells,what price then people?

Then I will be able to have some plastic surgery!

GTC

SP acting like it's going to be 2bopd then.
2517

Petrobras Enersia S.A. have just sold their 9.19% holding in Hidroneuquen S.A. for US$15 million....................Question is where do they want to reinvest, and when.

OILYRAG
Chaco would welcome such an investment.

So a spud date end of Feb and pull out of PLO. Mixed news but as they say enables investment elsewhere

Chaco Resources PLC (CHP) Thursday 18 January, 2007

12:22P - Puerto Lopez Update
print mail a friend armshare fundamentals more announcements


Chaco Resources PLC
18 January 2007





18 January 2007



CHACO RESOURCES PLC



('Chaco' or 'The Company')



PUERTO LOPEZ OESTE - UPDATE



Chaco Resources Plc (AIM : CHP), the oil and gas explorer and developer focused
in South America, announces that the Operators, Expet S.A. and Consultoria
Colombiana S.A., have advised that the new seismic data does not indicate the
presence of structures large enough to be considered commercially viable.
Consequently, the Company has decided to withdraw from the next stage of
exploration. The Company expects to be able to acquire an alternative investment
opportunity.



Technical Director, Graeme Stephens, said today 'The new detailed seismic that
we ran over the two leads in the block did not support the earlier mapping and
indicated that while potential targets were present, they were far too small to
be of commercial interest. This is the smallest of our interests and our
write-off on this area is not expected to exceed 0.9m.



One advantage of reaching this decision at this time is that it enables us to
devote funding which was earmarked for drilling in this block for targets of
higher potential. We are currently in the final stages of negotiating such an
opportunity and expect this to be finalised and announced in a few weeks' time.'





Competent person: Technical information in this announcement has been reviewed
by Graeme Stephens, the Company's Technical Director. Mr Stephens is a qualified
geologist and has been a member of the American Association of Petroleum
Geologists since 1970.





For further information contact:

Nicola Brookes, Finance Director

Chaco Resources plc

Tel: 01494 431195


Lindsay Mair Simon Robinson / Clare Irvine

Daniel Stewart & Company plc Parkgreen Communications

Tel No: 0207 776 6550 Tel: 0207 851 7480

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Chaco Resources PLC (CHP) Thursday 18 January, 2007

12:22P - Puerto Lopez Update
print mail a friend armshare fundamentals more announcements


Chaco Resources PLC
18 January 2007





18 January 2007



CHACO RESOURCES PLC



('Chaco' or 'The Company')



PUERTO LOPEZ OESTE - UPDATE



Chaco Resources Plc (AIM : CHP), the oil and gas explorer and developer focused
in South America, announces that the Operators, Expet S.A. and Consultoria
Colombiana S.A., have advised that the new seismic data does not indicate the
presence of structures large enough to be considered commercially viable.
Consequently, the Company has decided to withdraw from the next stage of
exploration. The Company expects to be able to acquire an alternative investment
opportunity.



Technical Director, Graeme Stephens, said today 'The new detailed seismic that
we ran over the two leads in the block did not support the earlier mapping and
indicated that while potential targets were present, they were far too small to
be of commercial interest. This is the smallest of our interests and our
write-off on this area is not expected to exceed 0.9m.



One advantage of reaching this decision at this time is that it enables us to
devote funding which was earmarked for drilling in this block for targets of
higher potential. We are currently in the final stages of negotiating such an
opportunity and expect this to be finalised and announced in a few weeks' time.'





Competent person: Technical information in this announcement has been reviewed
by Graeme Stephens, the Company's Technical Director. Mr Stephens is a qualified
geologist and has been a member of the American Association of Petroleum
Geologists since 1970.





For further information contact:

Nicola Brookes, Finance Director

Chaco Resources plc

Tel: 01494 431195


Lindsay Mair Simon Robinson / Clare Irvine

Daniel Stewart & Company plc Parkgreen Communications

Tel No: 0207 776 6550 Tel: 0207 851 7480

a complete over reaction! i would rather we didnt drill PL to pursue better targets, and possibly spend the extra capital on acquiring a larger stake in Alea, which IMO is full to spill point! will be some traders exiting now, but further news to come in the coming weeks