______

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.

Kirk, My view is CHP will get both, ie more at Alea and a new area in a proven high potential location. For the moment it is time just to be patient but I would put money on some of this coming out very soon. I am also hoping that by the end of Feb. CHP will have completed at least one drill hole in Primavera and have started the second by the beginning of March.

Have had CHP on my "investment "watchlist for this past 12 months .Have succesfully traded these permitting volatility and ensuing "real" Momentum levels being realised. ......and " bread and butter" style exploting its trading parameters which before today were firmly established at 10-5 suport level and fierce resistance @ 16p .,But as an "investment" i still remain as totally unconvinced as i did in my one past post ........Now with the restrictive cost of magnetic imaging and 3D Seismic survey in a sector notorious for heavy cashburn i ask myself the simple question Why didnt CHP begin a programme of spudding wells in thier most promising acreage . ........And not start with non commercial acreage . Also watch the tight rotary count in which my "Alexanders connections "reports that 90% of oil companies are using to makeuse of thier lawful right to retain rigs foran extended period. ...On the other hand selling seems a bit overdone . @@+ J

TFC, You seem to have overlooked the fact that the operator in the case of CHP's commercial acreage is the State owned company, Ecopetrel, and it has been so far shown itself to be unable to rise to the challenge of acquiring rigs in a difficult market. Now, if it was prepared to hand over operatorship to CHP/Repsol that would be a very different thing. It would seem the obvious thing for CHP to strive for; in the meantime the oil that has already been found about 15 years ago is most likely still there - after all it took a few hundred million years to migrate there in the first place - it would be very bad luck if it had decided to leak away in the last 15 years!
I am anticipating that there will be news on this block very soon and that the impasse could be resolved as a result.

why have people misread the RNS, it is pretty clear that they havent abandoned a well, we werent even that close to drilling PL. After extensive interpretation of seismic it is clear that there is hydrocarbon shows but not in a commercial quantity. Why waste further capital if you have the chance to acquire better prospects? is it so hard to understand?? all these people stating, why didnt they spud the mose promising acreage.........i think you will find they are, Primavera is the most promising IMO and they are spudding it next month!!

rant over!

regards

robbi

robbi, not disagreeing with you but I think it's more the fact that the market doesn't like unexpected surprise and it was only in Q306 that the boundaries were changed with the hope of having a better play with PLO. That said, there was never any value attributed as already mentioned by others and it's a better management decision not to continue now. Certainly the spudding next month has gone largely unnoticed. This is the real news in my opinion along with updates expected as early as "..a few weeks' time".

Nice 100,000 buy.

Sharesure if Primavera has two successful drills. What would your price per share be given market sentiment. Wouldn't Primavera be a Company Maker on its own.

all hypothesis ..... first of all let the company find something that even looks as though it may have commercial viability ..... at the moment, it is just among the myriad of blue sky E&P companies

hypothetically speaking

It would be helpful if the header could be updated to reflect the changing circumstances.

I ned your help, guys - from one of the more knowledgeable oil threads around.

I have 10% of my portfolio in oils spread across 4 shares - half the normal 5% I allocate to each of my stocks before going overweight.

I now realise I don't know very much about oil stocks and am being drawn towards more trading stocks like ASC, COH, DGT, MYH, RCG which I find I do understand and can do my own analysis on (margin, ROCE, EPS, PE, PEG etc) pretty competently. Whereas I fins oils a mixture of prosaic trading and pure speculation. Much as I like a flutter, it's not a reliable way of building my pot for me. So I contemplating reducing/extinguishing my exposure to oils.

Of the four stocks I hold, CHP, EEN, FOGL and SEY (all of which appear to be on the brink of the "big break through" - well, maybe FOGL has a yeaer of two longer to wait than the others) in what order would you advise me to dispose of each in turn - leaving the best prospect till last, of course?

Perhpas I know what the answer from this thread willbe, but nonetheless TIA!

try buying into quality! .... some spivvy stuff is fine, but it is exactly that with the odds against success quite heavily stacked

blackdown - made some changes but I am hopeful that there will be a need to carry out some more far reaching ones sometime soon. Just not sure exactly when - which is helpful!

Anyone know if the 1M was a buy or sell?

cmp0325, A B trade is broker to broker. So one of them has probably got a client with a large order to fill.

GED busy on Primavera over next 6 weeks.
2517

LONDON (AFX) - Global Energy Development PLC said it plans to drill three wells in the Primavera-Luna Llena field in Colombia.

GED update.

It has started to mobilise the drilling rig to the site, a move that will take three weeks to complete

Afterwards, it will spend another 10 days to drill the wells to a depth of up to 2,550 feet, followed by a 10-day production test.

'These three wells are intended to evaluate the hydrocarbon potential of the 'El Miedo' sandstone in the upper Carbonera formation,' Global Energy said.

other people's wells are fascinating but have no bearing on one's own ..... while GED may find oil, CHP could just easily find sand ...... ask anyone (mug) who bought into the ELP hype in Jaguar Field

As I understand it the field is adjacent to CHP licensce area and if succesful may have some % implication for chp due to them having a share of the lake so to speak. Only heard that on others research maybe someone could confirm

i think you are correct ... nevertheless, my observation still stands ..... you may recollect that ELP found bugger all in a similar situation