______

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.

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?!

So it would seem Rob , but im talking about SERS prospects and not the crap Hardmans have a habit of producing on their behalf ........... lf you witnessed the effort that goes into research into a smallcap you would never invest again ,,,,,Sheeesh man ....CHP pay Hardmans a fee to manufacture that crap / obviously they will err on side of mass optimism and paint CHP to be a "future" gem ! l see analyists EVERY day ....Reg- Smallcaps ..Most read no more than website, talk to management, read past history and spice it up with a few rumours derived from city watering holes ....... spend perhaps a couple of hours composing utter nonsense and then cite estimate on future S/P /P/R/Roce , / EPS,/ DPS ect ect and then have a half educted guess at fundementals.. aND TALK OF CHaRTISM AND MOST DONT KNOW BEYOND SIMPLE STUFF LIKE mda OR ema LET ALONE T/A with c/sticks patterning or simple chasing the upper Bolly or SAR ....@+ J ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,Driver - Well im glad to please you and will sleep easy tonight in that knowledge ...lol ..Juste teasing D ...,,,,,,,

I would like to plug AFR , low risk for the sector it is in .

so would i Roly . So would i ..lol lts paying for my g/f and i to spend a month in Dubai .....lol

CHP i think is an overhype company, much like SEO in the past. I am still holding but tempted to let go.

Like cynic also out.

98 ..... i thought carefully about it too, but could find no good logical reason to stay in ...... though it is possible that CHP will come good, perhaps even in my lifetime, there are much better repositories for investment in the meantime.

TFC .... don't know when you last went to Dubai, but the Jumeirah section is now truly vile! .... in future, shall be staying at The Creek

cynic
In your lifetime pretty soon then.

OT ......Cyn lnput much valued as always even now even reg my holidays ..lol ...... l am off to Cape VERDE set of lslands in MAY and Cyprus in June - as trading vols thins out as you English set about your social season of inverted SNOBBERY -Henley , Newmarket and Royal Ascot , Wimbledon and Stella/A , Lords Oval , Cowes ect ect .................. NOWPLEASE DONT TELL ME ITS TURNED INTO A ghetto of the likees of LA OR N/Y .........Juste teasing C Dubai - 2001- but that was work not pleasure .....

The management team has been strengthened and needs to be given a chance to prove itself. In my view, now is exactly the wrong time to sell out. Alea is a certainty - the only issue is how much oil is present.

I suspect that many successful oil explorers have experienced a couple of dry ones before striking good. Hang in there but be realistic about the outcome.

driver .... just a couple of weeks to go, and then i shall be free to come and haunt you all

cynic
You're doing that already.

g/f utterly freaked now by your descrition of Jumeirah .....All she sees is the sanitized holiday progs with ultra-expensive shopping complexs/ baking weather/ luxurios opulence , ...You know what i mean ..lol @+ J .......................................................................................................CHP . 7p ? You got ripped off .......lt will be 5p soon as another painful wait will have mms shaving of tiny ticks at random for fun and quick cash ,,,and as the heavyweight shorters and stop losses kick in ..lts Chacos Stalingrad .....Sorry if you dont like it ; and its only MY CALL ok m/ b @+ J ls CHP qouted legally or illegally on Frankfurt/Bremen Berlin ? ,,,lf so this CHP will be blown out of the sky .,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,Driver, oh Driver .. .,,,lol,,lol l like you (i think ) .lts your sense of humour and ability to find the most obscure sites and all of them either helpful or downright funny as shown by foto of C .....................

It is very apparent that today there has been a significant buyer in the background grabbing shares as they become available. I suspect that we may see an announcement in the next few days that our new chairman has picked up a significant extra amount of these. I hope that he is not the sort to resort to blind trusts to tuck away independent holdings.

without sounding obvious, but TFC, you have your own objectives/agenda which you have openly admitted. Clearly predicting 5p would be beneficial for you as you have a short position. It is much easier to scare investors into selling than to influence their buying position. Not being personal, but i hope you are forced to close your short, not just because i dont particularly like shorters but because it would be benficial for both me and other holders.

p.s do you have some form of keyboard tourettes?? your 'comma' key and @ key is taking a battering :)