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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.

sharesure sounds good am going for lunch.

Trading pretty mixed but spread now 10.50 / 11p ....firming -.but not as convincing as one would like -- ooo the torture never stops .......SS/ Your source is talking utter nonsense ! .l extremely doubt ANY definitive useful data reg initial well will be in the public domain for another month or so .......l am fully aware the terrain is favourable for rapid drilling . BUT not even BP with all thier hi-tec gadgetry drill that quick,lts comical to suggest otherwise .. and compared to BP , CHPs operators are using sharp pencils as opposed to state of art drills .l know as i have their operators drill number ,,,,,,,Cynic -You are correct in assuming odds are about 9/2 .Alexanders gas and connections -the industrys unofficial handbook -hence its 3,500 price tag -errs very heavily on the side of caution pointing out the ratio of past successes and failures in this area . VERY high risk V medium reward ........Nothing but another ill prepared wildcatter in my eyes . ...

level 2 getting even stronger, 2 vs 1 getting ready to go blue !!!10.75-11

So news so far in the last week or so -

Drilling Commenced
New broker
Increased holdings by Cantor

To Come -

New Block
Drilling Update
Second Drill
Alea update

Then -
New Estimates from Hardman & Co

then dust to dust, ashes to ashes!

FG and possible that CHP becomes operator for Alea and Repsol departs? It would be a nice deal for Chaco to do as it would give them 60% of a known field.

TheFrenchConnection - 04 Apr 2007 14:57 - 2977 of 2981
Trading pretty mixed but spread now 10.50 / 11p ....firming -.but not as convincing as one would like -- ooo the torture never stops .......SS/ Your source is talking utter nonsense ! .l extremely doubt ANY definitive useful data reg initial well will be in the public domain for another month or so .......l am fully aware the terrain is favourable for rapid drilling . BUT not even BP with all thier hi-tec gadgetry drill that quick,lts comical to suggest otherwise .. and compared to BP , CHPs operators are using sharp pencils as opposed to state of art drills .l know as i have their operators drill number




what a load of bollocks! drilling should take 10 days on a trouble free basis, testing 14 days. what do you think gran tierra are?? do you think they get their drills from b&q or pencils from stationary box!?

SS - ignore him, i hope the repsol rumour comes up trumps soon. news on our favoured thursday would be nice!

have a good evening all!

ROBBI / Slt / l believe E-bay have a variety of books / literature with subject matter reg the drilling for hydrocarbon .l politely suggest you visit the site ..Although i cannot personally vouch for it ,i dont personally believe Gran Tierra, Repsol , or Ecopetrol patronize B&Q ...But NOT one had the "right " connections NOR the dollars to aquire rigs last year during the tight rotary/ workover count . Well did they ?? They let the rainy season arrive and fell behind .... Yet others in the area did !! ....Now there are over 30 oilees drilling in this region including a French midcap subsidiary -one of whose number-a mere lugger but friend told me that exploration in the mirador was a lottery ; and furthermore that the LLanlos was how he imagined Texas in the 50s A British chestnut EEN has been here for more years than i can rememeber and must have more seismic than Shell yet has ner come up with anything substantial ,,,,,,,,,, As for CHP ....Now While Prim Catchapo well is very shallow the effing rig only reached its location a matter of ten days ago with subsequent spudding on the 28th No operators juste go hammer and tongue at any prospect no matter how optimistic /pessamistic they feel reg their employres acreage . aw Sod this for a game of soldiers. Do u know how long a simple Drill Piecetakes to be replaced or worse a impacted or fractured DP ..Any idea of how destructive the practice of bottle brush drilling or steam injection are ? Neither would be used ona project with high expectation of yield ..Both techniques were designed to remove oil from small obstinate pockets of oil at the end of a wells lifepan CA PUE ! Not inception ......@J

"While Alea is shallow the effing rig rig only reached its location a matter of ten days ago"


are you talking about cachapa or alea gareth???

SS, that would be sweet!

Talking of C in prim block ............. zzzzz ...bonne nuit .... @+ J

looks like we have a buyer in the background, we're blue and possibly ticking up again .

didn't tfc say he was going since he was caught out lying about his trade in chp last week, meanwhile he has posted as much -ve rubbish as he can think of.

It wouldn't be so bad if he actually used a language we could all understand.

surely the drilling as finished at least 2 days ago .

we will soon be half way though april .very poor pr,

sod the PR .... who cares what the hot air merchants have to say? ...... results results results are all that matter

Tu es la ? .Alors ! ...Yup my job is done. BORED stiff now !!,,,,10p was my target ...but the 10.25/50 spread had to suffice . A mere fun punt ..... c'est a'qui criera le plus fort; a'qui mieux mieux ,,un bon conseil >,,,Mefiez-vous des apparences..........For all that glitters be not gold .....bonne chance tu branleurs ! But should this ever to slide to 9p im going short bigtime./ Fini ........ciao...........................@+ J

Go away, once and for all - PLEASE....

ive gone turdwick Fret no more ..................off to antagonise the traders threads now....................................................................