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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.

not at the moment bo, but I just did a dummy buy/sell and at the moment I can buy 75K and sell 250K so another buy or two should get us up there!

With oil price again on the rise and a Chaco drilling programme to be announced very soon and the possibility of weekend press comment, I'd have thought we'd be heading higher this afternoon

Hey we're blue and there's blue lights on level 2!!!

1 vs 1 another 100K buy and we should be rocking!!

Greyhound - 09 Feb 2007 14:58 - 2243 of 2244

I personally think if all goes well, Chaco is at the start of its bull run, we have primavera to drill and announced, a new field, alea and results and possibly more... This is a defining moment in Chaco's history.

In the run-up to next week's (my estimate) spud at Primavera it would be likely that CHP would arrange a bit of PR. It would be timely for a US interview update since if CHP is going to eventually attract a bid from one of the majors it could do with being on the US radar again as of now.

Thanks fg - I'm Stretch on iii. Very much of the same opinion as you guys.

Your 100,000 is in!

Hi stretch ;-), level 2 looking better bo

sharesure - another interview with the wallstreet journal for instance??? now that would be interesting!

robbi, maybe. I would if I was them!

I would too Sharesure, not entirely sure how competent Parkgreen are though! More PR is a must for chaco IMO, I have expressed this to them on a couple of occasions when MG was there.

wow... wtf happened on advfn then...? sorry none chp contribution...

I'm don't know where to look now i'm registered on both, I'm a paying customer on ADVVN but arn't happy with what went on yesterday. The amount of CRAP I have to put up with on boards such as LMI from MR Demolition etc, why don't they deal with them gits instead.

My support to FG, good to see you on the other side

Hope you got an epology

sharesure, u have mail mate

Beau62 - 09 Feb 2007 09:43 - 2223 of 2255


Never been banned here or iii or fool in 4/5 yrs. I'm a good boy usually. Didn't really deserve being banned over on advfn yesterday though I did send in a couple of scathing emails and I guess the truth hurt them. It is their loss and MAM's gain.

I'm getting used to the format here, not bad at all.

Beau




Couldn't agree more mate, i don't take kindly to being treated like a naughty schoolboy for basically nothing. I'm gone for good.

Hi hilly thanks for the support, I'm glad its all sorted now.... It took some time but peace at last. Although like acv , I think they should treat people better... I will remain on both boards as I like this board / posters too. Good Night all.

Yuff

clear as mud mate

cheers

M

Just as a refresher for anyone new to Chaco, taken from a recent interview re:Chaco

....."A professional investor tells MoneyWeek where he'd put his money now. This week: Bob Catto, investment director at Williams de Broe:

"A third promising play is Chaco Resources (CHP), a fully financed oil explorer with significant assets in Colombia and Paraguay. Chaco has strong management based in Bogota, where three projects will be drilled this year. The first well is due in February. The group should be in production in 2007 and has plans to find partners for it's huge and highly prospective leases in Paraguay."

Ends

'fully financed oil explorer with significant assets ' 'strong management' 'promising play'

With drilling to commence anytime now , this week should see a strong rise in the SP imo.