______

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.

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.

agreed 2x1m definitely cash and new, not sure about the others.

Stewart, agree with you re those trades.

Trotting & Cynic - happy to act as your stakeholder. So are you both agreeing the bet; Cynic you have gone quiet since Trotting said he'd take part.

re Nicola Brookes share options, I don't think that anything much can be read into the actual option price; the timing yes. Maybe someone wanted to be generous to her for some reason.

You could also interpret the 2 X 1m as a rollover at a fine margin. Also the 2 X 500k could well have been placed during 8.00 - 9.30am today when mid price was 12.50. They are well above NMS, and one of them is a T trade, so are reported delayed albeit above the mid-price at time of order. Also possible the 2 X 1m are buys for same reason.

stu/stev/share/stock,
Thankyou feel better now,if you guys are right the SP will be up again tommorrow

Sharesure,
Thank you for your reply....Your well informed posts are always appreciated, but I was rather hoping that your answer might be able to give further guidance for making a crude valuation of the company. For example Chaco's share of the 38m barrels in Alea are worth 9.5p/share (at $10/barrel) in the ground. Ignoring any upgrades to the field from the upper sands, what value would you give to each barrel when production begins? If for example you said $30/barrel, then Alea would be worth some 28p/share which, given the likelihood of production means the shares are undervalued at 13p what with Primavera and all Chaco's other potential assests.
Tia,
LL

I tend to agree with stockdog's interpretation of yesterday's trades - this to me is perhaps the more likely scenario.

resistence at this level if it breaks higher will start to test 16p

Sharesure .... am in Europe, but yes very happy to put up 100 ...... Trotting knows that

http://www.rigzone.com/news/article.asp?a_id=40999

Has anyone seem the above article?,
Lukos oil finds 100mil barrels of oil in area close to chaco i believe

Guys the Lanos basin is quite a large area. The Lukos field is some
300klm away from our patch!!!

Yes 300k thats 170 miles away, not exactly next door.

M