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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.

FG, put you email address on here again; have been off line over the weekend. Tomorrow might be a good day.

hope not- i want more the cheaper the better.

Sharesure
We could use a good week to boost confidence.

someones just had 200k before open.

Just to keep folk abreast of developements going on elsewhere, one of my other oil stocks, Emerald Energy has been awarded another Colombian contract in the Llanos Basin. Perhaps we can expect an update here shortly?

.

well we should now be at 2500 feet,

Tanker : Was that not the last words uttered by the pilot on the late Jim Reeves aircraft before it smacked into a mountain or something. ?

Copied from across the way - I thought it was brilliant - courtesy of bwd

bigwavedave - 19 Mar'07 - 10:56 - 26577 of 26580


Some of you may remember the Wardle's Prayer from December when we were waiting for rig news. Here is a revised version. I suggest you all get down on your knees and repeat after me:

Our Chairman,
Who art in Chaco,
Business be thy game.
Thy rig has come?
In Llanos? And is it drillin?
Give us this day,
Our soddin news,
And forgive us our impatience,
As we forgive those whove been spudding before us.
So lead us into newsflow
And tell us about the formation,
Cos Im getting fed up,
With waiting and waiting,
For ever and ever.
Amen

you wouldnt believe that chaco was now at a company making stage within its development. still way below last yrs high c.18p and now drilling.

just thought id`e have a go at buying at 12.54pence on a 100000 trade and let me have them at mid price of 12.50, thats never happened to me before.

bhunt - thanks for compliment. Just wish it worked...!
(Are you bigbas from the other place, by any chance?)

pisces - well done. Good price I reckon.

Pisces . Without wishing to dampen your enthusiasm but this usually occurs when a overhang of shares exists: or your trade was executed immediately following a sale of stock at least matching yours in size which allowed the "set" to be executed. @+ J .....ln fact a 200,000 trade on a spread of 12.25/ 13p only realised 12.00p . ..Looks weak and will be lucky to finish the day on a mid of 12.5 ...Will take an earthquake to move bid ; but offer looks weak as i said ! .

tfc- well we had a buy before the open of 200k at full offer (12.75) so that evens that out buys v sells more a less=.

but that was at opening ,,,,and now is now ,,,with last trade of 200,000 selling at 12p is now . Naturally i hope i am wrong and you touched lucky; but that would not be the view of most pros

most 'pro's' would look at the buy v sell ratio and see that buys > than sells today thus far.

looking to add so will wait for mm games.

Buy /Sell ratio is misleading at best of times .The s/p is weak and as i speak spread has indeed weakened furthur to 12p/12.50 ...@+ J

all good for me as i have an order in.

bwd - yes bigbas from other side

sorry to steal your thunder - but i did think it was good

volume picked up at the end I see.