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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.

and vog.

Tanker, interesting list; if you know anything special on any of them click on the email for me as some folk get annoyed at O/T comments, although for the immediate time CHP seems to have gone to sleep. Know that will not last long.

buy cey a cert.afd 300p coming

Thats me in @ 16.29, took a massive loss in AMU which I can't see recovering.

The demanding schedule of Presentations planned by CHP next week should give the company a much broader appeal and help existing shareholders better understand the potential for the rest of the year. I am expecting that the independent report will quote a range of potential reserves for each existing exploration area (with Primavera figuring very strongly) and a progress report on Paraguay - both a timetable for the existing two areas and information on the Bohemia block adjacent to Brazil.

Sharesure
Do you expect the report on Tuesday ?

Sharesure
I think I recall you saying you would be at one of the presentations.
What day are you going and when can we expect your impression of proceedings? Assuming it will not be embargoed information until a certain date.

Bodeng & Tonyrelaxes, I'm at one on Tuesday but then away. I'll try to post something before I go but I expect the company will also issue a press update too.

Hi Sharesure - Yes I've just spent the past few days doing some research. Thanks for the tip posted on the GFM thread. Any idea how much cash this company has to hand as first year Primavera programme estimates @ 2m USD. Or are you expecting fund raising through further placement?

Sharesure.
Thanks. Have a good trip - hopefully in an elated mood!!
Busy day tuesday, I'm at SEO AGM (which I know you also watch) that looks to be equally interesting.
Tony

Tony, I'm hoping to get there as well but will certainly arrive late as the CHP Presentation is unlikely to finish until 2.00. If you want to meet at the SEO meeting and swap updates use the email button on here to let me know how to find you at their meeting. Suspect that this year there will be quite an attendance.

Done!

Mainly selling since just before 11am with no change in the sp, could there be a buy order to fill, or with so much imminent news perhaps the MM's do not want to be short of stock.
2517

I have now held CHP for several months, albeit my exposure is now less than it was ..... I have posted to this effect before, for though licences to explore are very nice, discovery and production of commercial quantities of oil are the only things that really matter .... and that can be many many many months down the line, if at all

cynic, all I would say is look out for what is said next week; modern seismic can take a lot out of the randomness that made exploring for oil so tricky in the past. As for progress to production the company gives the indication of being keen to progress quickly to that stage.

Eric - welcome to the Chaco thread - good to see you on board.

Sharesure and Tony - I too am hoping to get to both the Chaco briefing and the SEO AGM on Tuesday - although I still have a wee obstacle to clear.

Should be a fun day

Baza

Baza - fun for who? You have Email.

I suspect it could be a fairly rough ride unless some staggering news comes out before or at the start.
I understand from someone that has spoken to him that he was " impressed with how Martin Wagner comes across". Sorry - really O/T here.

Tony

Nobody should be too concerned with the lack of an RNS at 7.00 this morning; I think some were expecting/hoping that would happen. Highly likely that later today or tomorrow there will be one. Look fwd. to meeting some other contributors at today's meeting at midday and then will update here later. Hope that this will be the day we can put a more precise programme together of how CHP's mgt. will progress their 6 exploration/production areas (assuming that they also get the third Paraguay field - Bohemia concession).

Why does everyone get so twitchy just because an RNS does not appear dead on time? ...... CHP is dealing in oil in South America, where manana never comes ..... There was a similar panic when the licencing agreement took (far) longer to get formally signed off just a few weeks ago ...... and if any of you are in EME, then you will know the unwarranted bloodbath there because the results of a tricky drilling operation were delayed for pure technical reasons.

Sharesure i see you topped up your holding after hours you sneaky old dog, any new gossip to report?