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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.

just looked back at the charts (posts 2308/2309) to remind myself ..... would be more than happy to see sp form a solid base at this level, thus (re)creating a decent support or even springboard (we should be so lucky!)

Any predictions for next week?

would think interest would pick up from next week. those taking positions etc. chp onsite operations finally starting since floatation.

would be more than happy to see sp form a solid base at this level, thus (re)creating a decent support or even springboard (we should be so lucky!)

would be happier to see that graph keep pointin up.

i suppose plagiarism both of style and name is flattering, but how lacking in imagination

DB66, Couldn't reply to your mail as you don't have an email address. But the answer to your question is that I have not lost interest but am being uncharacteristically patient and just waiting for CHP to announce what I believe they are organizing. Still regard CHP as having about the best medium term potential of any AIM stock with, I hope, good short term potential too. Everything in Sth. America seems to take longer - perhaps that's why they fought a war over the Chaco region of Paraguay in the early part of the last century (because of oil) but have still not really got exploitation fully operational. Think the Colombian Gov. is trying hard to change this in their country but they need a bout of privatisation to move them along faster.

Spud date for Cachapa no1 well in Primavera block is in first half of March..........................Also today is the last day to register your vote against traveltax. Go to, petitions.pm.gov.uk/traveltax. Also tell your friends.

bit of an over-reaction in sp, delayed by no more than 23 days, probably last chance to get at these prices before then..good to have some more specific news on spud date, just over 3 weeks to go........

Amazing how many immpatient people there are. A pal of mine said not so long ago, that 19 out of 20 trades are done at a loss. I think that I am starting to believe him. I shall be looking for an opportunity to add to my holding over the next month and not sell out cheaply. Investments are, after all, suposed to be long term, but nice if you can turn a quick profit.

short-term trading is always a gamble, long term is an investment. I can only presume that those who sold out today will just come in again in 1-2 weeks time with a bigger stake to recoup losses as it rises again, but in my opinion may be back up by end of day, at least partially

Thats the risk they take, being temp out of game.

Not the start to the week that was hoped for and really not acceptable given previous delays. Time for some changes in CHP's mgt. and the way that the company is run in my view.
Wish list :
1. Remove executive mgt functions spread over 3 continents.
2. In the future, centre on Colombia for Operations, and Strategy/Financial in London.
3. Replace some of existing Board here with properly incentivised directors who will also bring some sizeable institutional holdings so that they can act as a focus for mgt's performance.
4. Change the Nomad and/or Broker with one that understands oil expl. stocks.
5. Change the PR company in good time before drilling.
6. NO MORE DRILLING DELAYS!
7. Split Colombian and Paraguayan assets into two separately quoted companies and put much more effort than is apparent into bringing the Paraguayan exploration fwd. simultaneously.
And I guess I can keep on wishing since a similar list to the above was put to CHP mid last year and again before the AGM.

Sharesure
All good suggestions but not sure they will happen. In the meantime the SP should still recover with GED on schedule and drilling in 2 weeks.

sharesure- dont be daft two weeks come on.
its s america after all.

I dont think Sharesure is being unreasonable lizard, many of the points should have been acted upon a long time ago! I never understood why we have offices spread over 3 continents! and i dont think Daniel Stewart are up to it either! Get in a broker with experience in the sector and they will bring with it some extra research on top of the Hardman stuff! All excellent points, whether we have been delayed or not!

SSure

My take precisely.

Clearly the latest recruit, the doyen of Columbia allegedly, Wardle or whatever his name was, has no clout or handle here whatsoever, the operator just fudge along without any pressure or input from this indolent lot. A whole host of senior managers hanging on to salaries as the default negative news flows out again, unlike the black stuff. So tell me, what the duck were they all doing in Columbia last week then? Oh, I know, I nice little break and a couple of tequilas with the operator....never mind, they are only shareholders.

Frankly, this is just not good enough.

Very very disappointing.

Beau

i agree with bodeng. signals out of ged will react in chp sp. they have spudded so watching with interest.

Lizard, not being daft at all. Look at the slippage on Alea, the abandoning of PLO (after giving it such prominence) and Primavera has been put back more than once. Patience is one thing, fossilizing is another.

.

ss. you dont appear to be happy. will you still hold then?.