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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.

lizard
I think 3251 was referring to TFC and not yourself.

oh there's a number of precious lovies around ..... fine by me for they just set themselves up to be teased .... bit like candy from a baby though

OK.......To sum up........If we hit oil I'm going to be very rich and well on my way to clawing back some of the cash my ex wife and her tosser of a solicitor somehow managed to get out of me......If we don't hit oil then I'm f***ed.......There, that's pretty much the long and the short I think. In simple terms...FIND THE OIL PLEASE....PRETTY PLEASE.....LET US PRAY.....

Dear Lord,

To end our bickering and to make me rich.
Please find us oil without a glitch.
If that bloody drill breaks in the ground.
I've got a Makita that I can bring round.
Find it fast and let the black stuff flow.
Then I can p**s off to Italy where they still get snow!
If we don't then find me a massive bottle of brandy.

Amen.

lizard, I was not referring to you, thanks driver.

Below is the wish list posted on 19/2/07;
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.

The first 3 items seem to be in place; would put money on 4&5 happening since any new chairman is certain to want to choose his own team. Hope 6 is now history and that very soon Primavera will be drilled, and that Platinillo will quickly follow.As for 7, it is likely that Paraguay will be a higher priority now that there are more resources available to push things along.
I have excluded wishing for new blocks in Colombia and Paraguay since I doubt that this Board need any reminders on that front.

Stevo,
A few big sells earlier have reduced your buy/sell ratio to nearer 3:1...still good though.
The golden cross still looks a possibility though not sure what effect it may have on sp.
LL

been out all afternoon, great to see chp buck the trend, to all I very much enjoy your points one and all, but lets not get personal.

Its only money !!!!!!!!!!!!!!!!!

Newtrim, I thought you could have squeezed bitch into the lyrics..

Please keep the CHP thread from the slanging matches that engulf some threads. All holders know the risks of the E&P companies and don't need it explaining everyday. Cynic explains the risks but then bets on DOW and FTSE where slightest report or change in sentiment can result in hero or zero whilst TFC doesn't like CHP but advises buying VML which has good prospects in Uranium but at the moment has risen 50% this year on the back of those "potential prospects" and the fact that uranium prices have increased. For what its worth, CHP and VML both worth having in your portfolio at the right price, risks attached but thats where the larger rewards could come. Recent CHP news is encouraging but I expect sp to stay in 12-14p range until next substantial news.

different logic for buying/selling indices .... arguably easier to predict, especially at the moment though strictly for trading

I agree cynic last week was an easy call after the Chinese market crashed, that tit Bush sent another carrier near Iran and the rest of the yanks are starting to wake up to the fact that months of rising interest rates are slowing their economy, I wonder why!!!!! The dimwits on that side of the pond affect the rest of us but couldn't piss in a bath if they were sat in it. You're OK with betting on indices but there is nothing wrong with investing in speculative smallcap either. None of us really know what will happen otherwise the stock market would not be so interesting and potentially rewarding despite the risks attached, thats why we all get involved. Anyway, FTSE long tomorrow? strengthened dollar will improve profits of UK companies and increase exports?? What do you reckon? Personally I'll set a buy order for CHP at 12.75p and VML at 20p. Maybe I'll get lucky over the coming weeks???

i think sit on your hands and start praying that F/E shows some stability overnight ..... imo, $ quite overbought at the moment (+/-1.9250), just reflecting the unwinding of carry trade positions ..... my own Dow position closed at a very small profit ..... still long gold on basis that $ will weaken and gold oversold on basics

As a seller to US I want 1.85 again. Long-term possibility as US might lower interest rates soon whilst UK seems set for 0.25 to 0.5 points before we reach the top. That will strengthen the $US against which is not a bad thing. Like or not, the world needs prosperous Americans, annoying isn't it!!!
Fundamentals of many UK companies unchanged from 2 weeks ago but US investors in these companies see their own economy floundering and pull their cash out, this has however presented buying opportunities for some speculative plays that could deliver over the next year. My portfolio is a mix of highly speculative plays and some cash generators on modest PE's with growth potential but it is also currently 50% cash waiting to mop up bargains once the markets have settled or at a price I am prepared to pay.

Good luck to all regardless of your investment/trading style and preferences.

Last weeks recruitment to CHP and the Director keeping options for the future will provide solid encouagiment that CHP does have significant potential rather than just another of a myriad of hopefuls in this field. CHP/PTR possibly best options in E&P over the coming months?

CHP has the leaders of Giants on board , they see something in CHP which we may not yet know/see. They wouldnt put their big names down for nothing . Something is brewing and these additions and option RNS's are the clearest signal in any share that one will ever have that north is the only direction. imo dyor. I am a long term holder and am very excited now with the recent developments.

Just copied this again from earlier as a fag to find ......

Chart is looking strong ...... just 50 and 200 dma shown ..... good to see 200 dma providing much appreciated support ....... however, all should remain very conscious of the fact that the latest sp excitment is completely expectation driven




next major resistance is at 14.50/14.75

Today's Times page 42 re Imperial Energy gives a nice glimpse at the potential. Listed a year earlier than Chaco at 25p and with not a lot of 2P Reserves yet booked (rumoured soon to be 600m barrels of which 50% recoverable) and potential for 3b barrels but its all in Siberia and liable to Russian hijack at some stage. Imperial now valued at c800m and some think it could double again very shortly. I'd rather be investing in South America even if it is wet and there are anacondas etc.
How's your chart looking, Cynic? Must be looking much better?

SS .... i'll get you a white stick! ..... chart + comment is above ..... though brought forward from earlier, these charts continue to update themselves

ss- good post.

have been reading about threads.

Chaco's Primavera est. resources @400MMbbl = sp 220p. and then theres the rest and the new license expected shortly whatever that is?.

so it for sure has some reason to look in comparison.

Thank you for that; didn't think it automatically updated itself! Never mind the white stick, but thanks for the thought.

lizard, particularly if the potential of Paraguay is looked at in the same way as Imperial's potential in its other fields in Siberia.