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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.

lizard,

I have no more information than you on deals or licenses, merely commenting on the anticipation of investors on the run up to news regarding the current drilling program, if they hit oil first time there's no telling how far it will climb. If they don't well we'll be back at 10.5p sitting around patiently for another couple of weeks or longer. But 10.5p should hold medium term due to known assets at Alea, so even if they get a duster as a medium to long term bet this stock should reward even at todays price. However the thought of missing out on some serious profit if they do strike should move sp up over the next 10 days, question is do you stay in or top slice or get out all together, that is up to you.

Steveo

STEVEO
We could have steady rises over the next 10 days then.

Sentiment is building but as our friend cynic quite rightly keeps reminding us it is hope and expectation at Primavera but with at least one known asset in the hole at Alea. So whatever happen they WILL be in poroduction at year end, will be a good year for Chaco either way.

Sharesure/Steveo
Need your help to get a couple of things straight in my mind...Chaco's share of the Alea field will be 9.5m barrels...are these proven or probable reserves? Using Sharesure's rule of thumb this alone would give Chaco a value of 9.5p per share (which values the oil according to my calcs at around $10 per barrel). Once the well has been re-opened, what value could then be ascribed to each barrel of oil, given the current market price of $57?
The 400m+ barrels believed to be in Primavera - are these probable or possible reserves? My optimism in Chaco's shares is supported by Primavera or other developments becoming proven, but at the very least Alea should underpin the share price.
LL

Remember, Chaco were mindful of the fact that the Mirador formation (the principal hydrocarbon-generating source) becomes progressively thicker towards the west, as it approaches the Andean foothills. This is what they re-submitted when applying for the block. I understand the incumbents tried very hard to get part of our application as well (they had I think about 160,000 Ha from the first one and wanted to retain another 90,000 from ours to get to their 250,000 max). But in the end the ANH rejected their request, and chaco were successful! Primavera was a highly sought after area, and I look forward to drilling!

dont forget this new license should be put in rns soon. still ? on it. any ideas. colombia?.

cynic,il have an even 100 with you on hole one if you wont.

Lincolnshirelad, The current reserves at Alea/Platinillo are I believe classed as proven at the minimum end but the proposal to drill a step out well is what is required to see the full extent. Plus the upper sands need to be tested as they weren't when the block was last drilled. As for the 25% stake that CHP currently has it would be better if they had a larger stake and could then justify becoming the operator. That would require Repsol's co-operation. Maybe?
As for Primavera, I am sure that the company is very optimistic that the drilling will be a success but until they do that it would be meaningless to guess what is there. Fortunately that will become clear soon. Along with a few more announcements maybe. It's been a long wait but CHP will be anything other than boring from now on in my view.

Sharesure,it has been a good week for chp,steady buying,tighter spreads,and .25 rise per day bringing us back from 10p to current price,

as always thx for all your incredibly well reasearched posts,looks like we may see 15/17 leading up to rig arrival and who knows where if they have what we hope they have.

Capetown, thanks. This does now look set to do what we all hoped last year but then drilling delays got in the way.

travelling at the moment so not very active for next few days (sighs of relief all round) ...... Chart is looking strong ...... just 50 and 200 dma shown ..... obvious next resistance likely to be 200 dma ....... however, all should remain very conscious of the fact that the latest sp excitment is completely expectation driven

TROTTING - if someone can be found as stake holder will gladly have 100 that commercial oiol is not found on Well 1 ..... very happy to lose trhe bet too!

Cynic,
Enjoy your travels!
Hope you see 17p when you next look!

cynic,,sharesure could hold the money,,il send him a blank cheque for 100,,are we on?,,i say commercial hole one you say not.

Chaco Resources PLC - Transaction in Own Shares


RNS Number:9003Q
Chaco Resources PLC
07 February 2007

Chaco Resources Plc

('Chaco' or the 'Company')

Director's Grant of Options

Nicola Brookes, who is the Company's Finance Director, was granted options by
the Board on 5 February 2007 ('Grant Date') over 1,000,000 Ordinary Shares of
0.1p each at an exercise price of 11.1p. This price is the average mid-market
price of the shares on the 5 business days immediately preceding Grant Date, as
set out in the Company's share option scheme.

These options are exercisable for a period of seven years from the Grant Date.

For further information:

Nicola Brookes, Finance Director Tel: 01494 431 195
Chaco Resources plc

Oliver Rigby Tel: 020 776 6550
Daniel Stewart & Company plc

i like the timing. confident are they.

the plot thickens.................... ;)

Did not like the look of those two 1 mill sells!

were they sells ????. I would have thought that if they were sells - then the sp would have droppped back bit.

I am assuming - that despite the price - that they are buys - what do others think - I am just a layman when it comes to interpreting these.

The 2x 500 thousand are sells look at the price and they are .01p short of middle price,the two x i mill look like sells,if they were buys i think the price would have gone up with the buying over last couple of days,but who knows/

The 2 x 1m trades is a rollover, only seconds apart and at a different price.

Regarding the 2 x 500k @ 12.625, I would say one was a sell although they got a hell of a price and the last one was a buy.