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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.

someone did 158k at 11.59, the perfect trader eh..as that price lasted for 90 secs!!

Think there was 3 trades at 9.08 @ 11.59

Thats my point, 100k of those were mine !!!!!

Always thought TFC's trades were too good to be true - now I know - figment of his imagination.

I gave up reading the frogs posts ages ago. How can we take this person seriously when he is incapable of mastering the use of a full stop?

I have had a few calls asking me whether my recent criticism of the new mgt., when I stated a possible reason why news on the spudding date for Primavera had been held back, also meant that I no longer believed in Chaco's prospects. That is not the case at all - in fact I think the company is better placed now than at any time to really start producing the results we have all been waiting for these past two years. Whatever the outcome of the Primavera drilling might be, I believe that the asset value of Chaco might take a considerable leap forward when the new area(or is it more than one?) is/are announced in Colombia and also Paraguay. I suspect that these are further advanced than would appear to be the case but may be announcing one new block might be commercially sensitive to Chaco's prospects in getting other areas, so a wait for any news on that front is in all of our interests.

sorry to hear you have been sniped at SS ...... childish and unreasonable and unfair

SS - keep the faith, don't succome, value will out. Thanks for all your diligent efforts over the year.

ss, when do you think drilling started? I know from your previous posts that you thought drilling had commenced. When I spoke with management a week ago and asked if drilling could be expected in the very near future and if there would be announcement or not, the response I had was that there would have to be a consensus whether or not to issue an RNS (as almost all senior management were out of the country). So, I'm wondering if drilling has started only very recently? I know it's by the by now anyway...

At 8.28 and 8.29 two tranches of 20,000 and 25,000 in my g/fs name were sold @11.52 .....At 9.07 two more tranches of 51,864 and 58,247 were sold @ 11.5889p.......lf needed clarification of c/ notes will be forewarded to Aldwick whom i know.......As for you BHUNT....You mere underling .come call me a liar to my face ,,,e-mail me for car park number at Capstan House , Clove crescent East india dock ....and i will administer a little dental surgery ...........Annie 38 ..l would spend a little more time watching your 420k of CHP evaporate than worrying about full stops ...lol ....@+ J.

Happy days are here again I see..

tfc, your joint sales of 155,111 shares, could well be worth 310,222 at 2 each, within a year or so. That would be a profit worth talking about. I take with a pinch of salt, anyone who discusses their trading ammounts and prices achieved, especially when they brag about profits made in such a short space of time. I am well down on this one at the moment, but I can assure you that I will be making an undisclosed profit in the future. Then I shall be moving on to the next investment. I don't believe in slateing off other investors or companies they invest in, that is their bussiness. Annie38, please note, punctuation used.

i was not bragging. Merely trying to illustrate the irony in making money on a stock in which, i believe, l made a dreadful error in buying in the first instance . lts juste not my cup of tea. ln saying that i wish you well...@+ J ..

Fair enough, thanks all the same and good luck to you too.

So nobody wants to borrow my duelling pistols then ?

nah! you just pull the legs off a frog ... lol!

Afternno TFC, so good of you to confirm your trades - as I said - I didn't think I beleived you and now you agree.

TFC - you said:

"ln yesterday for a modest 158,000 @ 10-39p and 10.5 ....and out today @ 11.59"


I said:
"I dont think I beleive you TFG - you never got 11.59 for your shares"

You said:

"At 8.28 and 8.29 two tranches of 20,000 and 25,000 in my g/fs name were sold @11.52 .....At 9.07 two more tranches of 51,864 and 58,247 were sold @ 11.5889p"

QED

So you agree that you sold 45,000 at 11.52 and another 110,101 @ 11.5889

In my book, you lied

Also you said:

"ln yesterday for a modest 158,000 @ 10-39p and 10.5 ....and out today @ 11.59 ....a quick 3k in a company your not comfortable with has to be sold "

Assuming you bought the THE 158,000 at 10.39 (=16350 after tax say), and you sold 45000 @ 11.52 (=5184) and 110,111 @ 11.5889 (= 12,760),, then I make it that you almost cleared 1,600 - not the 3000 that you claimed. But of course it will be less than that because you bought some @ 10.5 and you will have had dealing costs. So lets say you cleared 1500 for the sake of argument - about half of what you claimed to have made.

In my book you lied.

QED

Happy to meet up if you really want to play silly boys - but I think the facts speak for themselves.

At worst you lied, at best you tried to come the big "I am" by exagerating your skill and trying to impress.

This is not the first time you have tried to do this.

Anyway - I dont want to sour this BB - but I did want to highligt blatant "exaggeration", shall we say !!!!!

If I am wrong - then of course I will apologise. BTW - 1500 is still not a bad profit over 24hrs.

Thanks for the offer ALDWICK - but I haven't used a gun for a while - anyway I was always better with my bare hands - much quieter

What about a pillar fight , thats quieter still ?

I think you mean pillow rather than pillar!! Ouch!!

LOL - aldwick - your freudian slip did make me smile - suspect there is no need to resort to violence. Seen too much of it in my time.