______

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.

Nope just the French

2517GEORGE - it's Go Industry GOI, if you're wanting to know the name of the co on the enclosed RHPSG flier.

Long-suffering shareholders in Chaco Resources, which has plugged and abandoned two wells in recent weeks, could be set for some respite if market gossip around the oil explorer proves to be accurate.

The Central American specialist was said to have secured rights to a proven prospect within Colombias huge Magdalena field, which has yielded more than two billion barrels of oil. A farm-in deal would lead to Chaco taking a 50 per cent interest in the prospect. Its shares, which have lost two thirds of their value over the past year, slipped a further p to 6p in spite of the talk.

http://business.timesonline.co.uk/tol/business/markets/article1701650.ece

It is hard to believe CHP anymore after 2 PROVEN prospects which have failed.

excellent news!!

25/04 09:11 - Chaco Resources: Farm In Agreement With Fenix Oil

Edited Press Release


LONDON (Dow Jones)--Chaco Resources said Wednesday that it has signed a farm-in agreement with Fenix Oil and Gas SA, to earn a substantial interest in the Fenix Block, an area of 24,117 hectares located in the Middle Magdalena Basin of Colombia.

Chaco will earn a net 48.75% interest in this block by paying 100% of the cost of a 3D seismic survey of approximately 100 km^2 during the phase 1 period of 18 months and drilling one exploratory well to approximately 8,000 feet in the phase 2 period of 14 months. The operator of the block is Fenix Oil and Gas SA. Chaco is fully funded for the phase 1 commitment. Monies are currently held in escrow by Banco de Credito in Bogota, Colombia.

The assignment of interest to Chaco by Fenix under the farm-in agreement is subject to approval by the relevant Colombian government authority, Agencia Nacional de Hidrocarburos ("ANH"). This approval has been formally requested and is now being processed.

The Middle Magdalena basin lies between the eastern and central ranges of the Andes mountains and has been a prolific producer of oil over many years with discovered reserves of approximately 1.9bn barrels of oil and 2.5 TCF of gas in over 41 distinct fields. The Fenix Block is located in a thrusted section of the basin which is structurally complex, and is on trend with some of the most significant discoveries in the area. Recent renewed exploration success in the basin by other operators has been largely due to the application of modern 3D seismic technology and enhanced structural modelling techniques which have enabled the accurate mapping of complex structures.

An existing well in the Block, La Tigra 10, currently shut in, has produced over 30,000 barrels of 23degreesAPI to 33degreesAPI oil during testing and intermittent production since 1969. This well will be one of a number of existing leads to be detailed by the new 3D seismic survey.

John Wardle, CEO, said: "We are very excited by this new opportunity which gives Chaco exposure to a third very prospective basin in Colombia. An active petroleum system in this structurally complex basin has generated large volumes of oil but the difficulty in the past has been to properly delineate potential trapping structures using 2D seismic. Now that modern 3D seismic, coupled with structural modelling techniques are being used, the discovery ratio has improved significantly. We are confident that our extensive 3D survey in phase 1 will confirm a number of high potential targets, the best of which will be drilled in phase 2."

Giles Clarke, Chairman, commented: "This agreement is a sound illustration of the direction the new board is taking this Company. We are focusing on working up lower risk opportunities aiming to deliver significant medium term cash flows through strong high level relationships in Colombia."

"Our new partners in this block have a wide experience in both the oil and gas and industrial sectors in Colombia, which, in combination with our team's experience will enhance the efficiency of the project. We look forward to working with them to explore this outstanding block. The board believes this new relationship has important potential for Chaco."

Competent person: Technical information in this announcement has been reviewed by John Wardle Ph.D., the Company's Chief Executive. Dr Wardle has 23 years experience in the industry, having worked for BP, Britoil, Emerald Energy and Pebercan, and is a trained drilling engineer.


(END) Dow Jones Newswires

Apart from the new block news today, does anyone know when the next drill is forecast?

Havn`t seen the spread so small - is that a clue to what is going on

I think we should have some more info on Alea to come now also. Bigger % and hopefully a drill date.

SD---------Many thanks, much appreciated.
2517

Pablo seems like you got it right, any more news?

Upon first glance that RNS appears quite encouraging until it reveals they only have sufficient funds for phase 1 of their plans -namely seismic and magnetic imaging ect ect . As for the ACTUAL drilling (phase 2) they have insufficient monies . After delays, and 2 dusters , and the new boards aversion to small PI s l would expect they will be currently racing around the city with their begging bowls. ..........Yet more dilution .And even if more finance is made available theres 14 months to wait even before any drilling takes place @ Magdelena ..... \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\' ..No news ,or even the briefest of mentions Alea is again rather disturbing .................l have read all their hype before reg PRIM so why will this Magdelena project have any different outcome.. CITY NOT IMPRESSED; BUT PI'S JUMPING BLINDLY ABOARD THIS SHIP OF FOOLS....@+ ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,ls this your idea of juicy news Pablo ? About as juicy as a 3 year old orange ....

I think Giles Clarke is astute enough to be aware that todays RNS will do nothing more than perhaps prevent a further short term drift in share price. Institutions will not be particularly impressed by the possibilty of "jam tomorrow" and he must come up with more tangible prospects which can be exploited within a shorter timescale to preserve credibility. I am reasonably confident that he will do so.

Re: Post 3390: many thanks Stockdog. Now we can do our research!!!

Annie 38 - I agree absolutely with what you say. The credibility of CHP's management team has taken a severe knock, and it will take time + some tangible and positive results of their endeavours to remedy this.

And so what if the Magdalena field has produced 2bbls ,,,,,,,,,,Ghawar produced 62 blln blls and once yeided 300,000 bblspdoe and is now in scarey decline .........................l fully blame the inadequcy of the board reg CHP . Utter useless miscreants who were complete novices and never set foot near a well until they formed CHP after effinf up gold prospect GMS.

i am a long term holder and have been since the early days and often visit this site and read with interest.
i agree with annie "jam tomorrow" indeed. i am still in profit but they have taken a severe knock over last few months. Long term i may well still recoup recent losses but this mgt team need to pull out there fingers.
i for one am not impressed at this time.
come on giles impress us!!!

1 thing what loose on the swings gain on the round abouts aslo been on since early days

I suggest that it is highly likely that CHP will drill Alea in the short term. This seems to be the most likely prospect and, if successful, will generate income which could then be used to fund exploration in the larger concessions.

It's about time chp communicated with their shareholders whether yhey like them or not. The rns' regarding the spudding and results have been appalling, only released when their hand has been forced.
What is happening regarding Alea, they need to get Alea producing and pronto, they can't do that unless they become the operator.