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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.

CHP is a failure...bail out before it goes to 2p.

Crazy to sell now. Alea is worth more than the current sp.

Be interesting to hear what Sharesure & Fatgreek have to say after ramping this.

if so bd - WHY not drill this acreage first?.

I had to sell some this morning at a 50% loss. I thought we'd have made it this time. No point selling the rest.

Perhaps because they know Alea underpins the shareprice, maybe they want more heavyweights on board or perhaps rig availability for Alea. I'm sure there are a variety of reasons...

Selling's pretty light considering.

greyhound only if top end reserves are proven.
with their recent quotes on Primavera i have ? on it.

Sure, but that's the nature of the business. Everyone's decision whether to sell or not.

why is it crazy to sell out now? ...... i suppose you can be a masochist and continue to hold CHP along with SEO ..... now i know why i love this BB; as mentioned before, because it makes me keep hammering home reality into my own little brain (as well as a vain attempt to convert others!)

Don't forget NOP had the same abandon well problem and the price dived dramatically to something like 70p I remember and yet today it has rocketed up to 134p at best this morning when I sold out yet again. These oil explorers are notorious for jumping up and down on news and if you get it right you can make a packet...NOP has worked for me everytime ( I have been in and out about 8 times over 3 years, doubled, tripling and even quadruapling my money each time) but I must admit to not being so skilled on CHP, its not an easy game to play but GOO is another one that has also made me a lot of money but only once so far. So be careful and remember this is just a game but one where you can win or lose alot of money and no matter how good you are at it you can't win them all.
Di
Di

Aldwickk thanks for correcting me.

So your saying to me that when there is a market sell off, which there will be. traders will take there profits, people who are short will only make money from speculitive stocks and not the bigger ones.

What aload of crap which planet are you on.

As for tfc your a gambling fool, from my experience i have found that you have to be patient and wait for the opporunity, trade less make more, and dont listen to twats like you.

People should take responsibility for their own investment decisions and slinging insults does nothing more than emphasise your own naivety. Personally I'm not bailing out, but then again I've probably held a lot longer than others and the pain is less severe.

Greyhound .... i agree .... heated debate is fine ..... personal abuse is very dull and childish and shows a lack of ability to express oneself rationally or logically or even just ones gut feeling

considering yet another duster the actual spread has improved since the bell ..........rather bizzarre ..............it would be typical for CHP to issue another rns later today saying ,,,,,,,,juste teasing we juste dont want small pi s.. ......lnstitutions must be rather peeved at 11p .....New Boy ......Whose rattled your cage u prick. As with SEO ,NML , PET and a host of stocks after that l was RIGHT again . This is an effing stinker .....Wait until the big players get to their desks at around 10-30 ,,,,,,and the fat lady will be singing

TFC .... what makes you think "big players" don't get into their offices until nearly lunchtime!

TFC...as with all stinkers some of us have actually made money on them...ok NML was a big failure for me ...but SEO...oh no...the best share I have owned to date 4p- 26p...even now at 1p it periodically goes up 30-40%...its just making sure you are trading up at the right time for me as I don't go short on anything other than indices.
Di

but you're a girlie ands so much more astute than us blundering blokes ... lol!

glad you admit it Cynic!!!!!:-)

always been a smarmy git around and about pretty girls!