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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.

wisdom Strawbs!

ITAM / Casse toi !! Les mots me manquent !!.Sidere completement et totalement . En voila des manieres !! .Ta gueule et fous-moi la paix ! Fini. ...,,,,,,,,,,,, AS for CHP:. Why should a Financial giant in Cantor Fitz purchase such a vast wedge of stock in the full knowledge that the following day a duster would be made known . Also why the sudden change in CHP s planned drilling location. Could the two be related ?Personally l cant see the logic in any of it . Unless theres a trick in the tail ......Qui sait ? .....................@+ J.......

didnt someone say that cantor hedge their postions against cfd's. From another board (iii):

The way this works is clients sells CFD's, Cantors buy the underlying as hedge
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Amities Robbi . Thank you. You have found the illusive last piece of the jigsaw that elluded me so . Feel much better now ...STRAWBS ---Here Here ,,,,Theres only two factors in REAL play in this cruel game -GREED and FEAR. Both are, as Kipling would have probably said nothing but sheer imposters, yet both envelop and digest even the most seasoned traders/brokers let alone green PIs ...@+ J

so i was correct the board are rubbish. and have still not giving out there thoughts for the company, very bad .

have lost patience far too late in the day ..... in fact should have paid heed to my own advice 6/8 weeks ago ..... am now out and hope i have the sense to stay out

cynic, I will put Trotting's cheque into your account when next in town later in the week.
re your comment about selling up, I thinkj that we shall find that later in the week more will become clear about what is going on in the background. Suffice it to say that there appears to be some appetite for blocks of shares. Whether the new block news or Alea drilling dates will closely follow that is perhaps the part of the equation yet to establish. I just do not think that this current dip is anything other than temporary (days/week?). I know that plenty will disagree with that viewpoint and I can understand that given the turmoil of the last 10 days.

sharesure , should we top up,

SS .... thanks; never doubted you would bank the cheque ..... for myself have decided there are better places for my funds, but shll continue to watch with interest ....... hope Mr P and his HUGE stake in GOO prove profitable!

many buys today are showing as sells, I know 2 people that have bought today at 7p and they are showing as sells when they are in fact buys, I think all trades so far at 7p are buys anything less is a sell so we do have good support

I got in at 7p , red figures ?

FG, Sells at 7p are more supportive than Buys at 7p!- but I agree with you that underlying this quote there is support - maybe clearer when the total order has been filled although perhaps that will not be today.

CYN .. Dont be so bloody hard 0n y/s Cy .For themost part you call it right on the majority of occassions , and at the risk of appearing to be paying u a compliment ,you are 1 of only 4 people in whose postings i take a blind bit of notice . `Anyway am i not correct in assuming you only held a small token long position and r thearby nursing very very minimal losses. Personally being a strict % man i closed 1 of my shorts earliar t./day but retained two others ready for capitulation later this week .Most "buys" today are in fact the closing of shorts as opposed to those going long . Buyers must be CRAZY !!! _KAMIKAZE - Temporary fleeting support at 6/6.5 ...........but when a stock loses almost 50% of its value in a matter of weeks there will always be those fishing for WHAT APPEARS a bargain and is to be expected .....and i while i agree CHP is not a one trick pony ; it is in my eyes nothing but Hardman hype & its assets are nothing but bits of paper reg dubious prospects. Even the half decent acreage needs a big player to bear the costs . ...& what with a plethora of stop losses at 5p .....value -2/3p at best . lncidentally Feld marshall VON SHARESURE { WHO FILTERED ME SIMPLY BECAUSE I WAS VERY SHORT } was chased from the field after my right flank led by trusted friend, Enobabrbus on MF thread , and newly promoted Grand Marshall Aldwick both overan his troops convicingly . .....a'bientot ...@+ J

holding was not minimal but was <50% of my "norm" ...... c'est la vie!

Personally I don't see CHP's fortunes improving much without some kind of find. Market sentiment has been moving away from small O&G E&P companies for a while now, and dissappointments do nothing for sentiment. It's also worth considering that the price will need to move more than 120% to get back to the highs of last year, and over 70% to last months levels. With more drilling to come, and the same odds of success or failure, the downside risk (maybe another 30%) seems too high to me.

In my opinion....

Strawbs.

SS, I can buy online at the moment for 7p and several have done so already.

At these s/p levels i would consider selling up and lock funds into SER (also in Latin America inc. Columbia )who are is at least producing . No heavy cashburn on Expo .Pays for itself .Latest tec has Tapia in California increasing production to 500 bbls p/d . And while they currently produce a mere 4,000 bbls p/m you have to take into account there are a million drillholes in Texas and how many of those produced ? ..18%....And 500,000 wells throughout the continent of USA that producce but a mere 1/2 bbls p/d ......but when totalled equate to 1mbbl p/d .....thats a 29th of daily global production ...Amazing stats huh ? All underlines the importance of small PRODUCERS like SER who have found thier resavoir And where else --but in the shadow of another well ,,,Markets have a downer on pure expos as Strawbs has already stated ....... @+ J .....Also look at GED - Got hammered after a duster ........and still falling ....86p,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,...........,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,..OT Cyn Did you read prez of lran saying lran will continue with its atomic programme / lran has always been in the frontiers of science ,,,blah blah ,,,but most worryingly said lran would not be bullied by the USA and if so it would change its passive policy ,,,,,Centifruges believed to have been installed ......They are on the brink of enetering that exclusive club ...............,,,,,,,,,Boooooooooooooooooooooooooooooooooooooooooom..

TFC ..... am quite sure that Iran is at least close to what it claims ...... confess that though the idea is pretty terrifying, as it is with North Korea, it is difficult to see why any country should agree to kow-tow to UN Security Council on this issue ..... whether or not this will lead to overt hostilities or Israel being sanctioned by US to take out Iranian atomic installations remains to be seen

TheFrenchConnection
Cheers for the SER plug.

tfc - isnt SER one from the so called "Hardman hype" you were talking about?!