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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.

tempted on a T25.

you pays your money you takes your chances! good luck if you do ;-)

Fatgreek,appreciate your input re level 2,thankyou

you're welcome...

good break upwards if it can be maintained .... next resistance is at only 14.5p so could all be a bit choppy unless real news comes through ..... recommend investing with caution

Could we have the makings of a golden cross forming in the next 2-4 weeks?

Don't know whether html works here like they do on advfn, so excuse me, not that I know what I'm doing, so this chart might appear, might not.

Eureka....

Where's the Golden Cross coming Linc

the 300k was my modest top up.

dont know about golden cross? but break out yes.

golden cross, for what it is worth, is unlikely to happen for at least another week (if at all) at about 12.75 i would guess.

to save the Q ..... a golden cross occurs when 50 and 200 dma cross over when both on an upward trend ...... the implication is bullish.

a dead cross is the reverse

buys and sells look to have been very evenly matched ...... a 300k top up is pretty brave in such a minnow

Beau62
I'm a comlete novice on charts,but my thinking is this:
The current sp is higher than any point over the last 50 days, so if the sp maintains this level then the 50 day moving ave will rise. The 200 day ave should also rise because the current sp is higher than the price 200 days ago. The golden cross will come if the 50 day ave moves through the rising 200 day ave. If I'm completely on the wrong track, then please advise.
LL

read post 2378!

Linc

I too am a novice so happy to read such posts particulary with some back up of thoughts.

I'd bet you were on the right track although when they meet is a difficult one to call, hence why I posted the chart.

Cynic, stupd q, does it matter where the 50/200 MAvgs lie in terms of beng on top or bottom?

Beau

Cynic,
You will find that Trotts has 100% faith in this company. Thats another 300k to add to the millions he already has.
Hi OMR, good to see you over here as well as the other site.
Regards prs 78

in that case, for his sake, i very much hope that i lose my 100 to him for otherwise he will have a very sore bum from being kicked by his bank manager

prs .... don't think so ..... the esence is to show that sp is rising both in the relatively short term and in the longer term ..... to be honest, i don't set great store by a golden (or dead) cross, as it seems to happen somewaht after the event - i.e price has already moved considerably

prs78 (??) Is that RunnerP ?? Can't get used to all these new handles. lol.

well its the 2nd half of feb. drilling could be underway now.