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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.

SS - you were asking for change and it appears to have happened. Is this to your liking?

someone turned the damn chart upside down

Cynic,looks like someone about to turn the chart back the right way up?,

SS,good news,lets hope the sp and the markets reflect todays rns.

funds for the new deal?. looking for some blue today. last few days has seen some decent buying.

Morning Lizard,and it seems the buying continues,should be back to 13.25/13.50

Blackdown, yes, this bodes well. Ignore the temporary 0.25p off - don't think changes are always appreciated for what they are. The exec. directors from the GMS days are now in the background (half way house to some of them ceasing their involvement I would suspect); We now have the c550m shares that the thread header predicted nearly 12 months ago so calculations of 1p/1m barrels remains intact. Expect the Nomad/broker and PR firm for the company to be changed fairly soon since I cannot see GC putting up with them. Would like to know what GC's package is; I would hope that it is heavily incentivised towards the sp being much higher. No doubt his options package will follow as another RNS.

Cynic are you sure it was not you that was upsidedown this am?,there you go nice and BLUE,enjoy

Sharesure hi, at last i understand your cryptic clue,lets hope whatever flows isnt white, red or rose! Black would be nice though.

make sure you spend or even invest your new found wealth (0.0025) very wisely .... lol!

morning to you capetown. deal to be updated in a few weeks (rns 19/02).

Cynic,i cant spend my new found well as i am HOLDING.

Cynic, might be time for you to change your tune or CHP is going to make you look a little silly. ...and we wouldn't want that, would we? Don't answer this post as I have a train to catch.

I feel the appointments this morning are very exciting. I've actually heard of Giles Clarke and lets not forget this man created Majestic Wines and made it what it is today. I suspect we have acquired a very sharp business mind and deal maker. The most exciting appointment must be the Shell man though who appears to be a Sth American specialist.

ALso CHP have managed the placing with minimum fuss as ever, ensuring minimum bloodletting on the share price. It sounds very much to me like most of the cash raised is a deposit requirement or similar for a new permit....certainly hints at that in the RNS.

I feel that individuals of the calibre of Giles Clarke wouldn't be joining the board as chairman if we weren't going places.

Todays RNS is not earth shattering news but long term is a major building block. I am more confident than ever that my investment in CHP is safe and that the future is very rosy.

33 yrs at Shell -Latin America Director. cant complain about that appointment.

I don't see how the news can be taken any other way than positively. We now have some real heavyweights on our board.

To get someone like Giles Clarke, who is a big name in the city and a well known and respected businessman, when we are an oil exploration minnow with no turnover is a fantastic coup and shows we mean business.

I wonder when he acquired his near 3.0 million holding in Chaco? Checked the 2006 accounts but he doesn't have quite enough to make it on the big shareholders list at the back.

What i'm getting at is has he been watching Chaco for some time and known the potential there?

GC's name has been floating around as a rumour for quite a few months, but Dick the Dutchman was either more recent or kept better sealed until a few weeks ago. Hope that the new funds are the escrow funds for drilling the 4th Colombian block; let's hope it happens a bit sooner than has been the experience on other blocks.

Is it not the case of every man has his price, and profit margin to explain the quantity of sells today?

cmp0325 ... It is indeed, along with fear. I would imagine that anyone seeing the freefall today would be filled with the protective instinct towards any profit they may have made so far.

Balls of steel, here though, and in common with many other longer term holders who can also see through the hazy cloud and out the other side to blue sky.

I have been in this share for a couple of years now and I think that this is a significant RNS for this company.

I have never felt so confident in an AIM share as I have in Chaco. Despite the turmoil in the markets today , I have felt confident enough to boost my shareholding in Chaco to almost 4.5m. Not intended to be a ramp - just wanted to express how confident I now feel in the new management structure and its assets and that I think the company is shaping itself for big things in the future (probably 12 - 24 months down the line).

BTW this is not my normal handle - but I am a regular lurker and contributor to this thread.

agree the appointment gives a strong indication of the companies ambitions to get top people in at an early stage.

33yrs at Shell inc Latin America Director impressive acquisition to the team also they have bought shares so they must be confident.

let the drilling begin.