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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.

s/s
We are all hoping that the meeting arranged By Stewart will be informative.

Beunos tardes amigos. I tell you another secret, buy chaco now, they cheap now but no for long. soon they be muchas dinero. When I no no but I hear everything good with Alea. better than before. Alea look sweet like honey. 7.25 is cheeep, watch the puzzle come together and with Gilesy boy .

Hasta lluego amigos

lol Pablo, you put it so well....

Good strategy from the new management team: get all of the bad news out of the way and then it is onwards and upwards.

Welcome back Ss and thanks for the header update.

You're starting to sound disillusioned and I don't blame you. My patience is starting to get thin too.

My own view is that some holders were a bit optimistic in terms of timescales. This was never going to happen overnight.

So Pablo
Are you based north of the Rio Bravo in Houston, Tejas?

Pablo - I have always wanted a beautiful ranch. Do you think that will be possible?

What like Rancho Hermosa dave?
That's the nicest one around.

Uponthe...
That would be ideal. I am told it has had a super makeover thanks to some visionary dudes from the Lone Star State. But you know what the most important thing is: location, location, location!

Has anybody checked what time Pablo posts to see what time zone he is in?

Come Pablo, don't be shy. We won't tell anyone!

Chaco proposing name change at the AGM. How about "Found F**k all Resources"
Looks like a year to wait for Alea.

pablo

you said we should buy at 7.25p as it was very "cheeep", got any more good tips?

beunos dias amigos, news to come is to look at,no today results.
juicy like mango, sweet like honey.report come soon and look nice. I top up today 300k. My amigo wardle buy nice, not for loss. watch my friends, weak sell now.

'The new Board anticipates an improvement in exploration results' It would be difficult not to, Amerisur Resources WOW. We shareholders seem to be forever looking further into the horizon. Andy with CHP's drilling record, maybe it's the answer to the UK's landfill problem so I suggest 'Waste All Resources'. Ha! Ha! However in fairness the new board should be given a chance to prove itself.

elaborate please

george .... why? .... has your wallet not been badly damaged enough already?

cynic, thanks for your concern,---------It's true I do have a paper loss, but what choice do we have other than to crystalize the loss or run with the new team in what is a promising area for producing oil. I have several oilies. some with not insignificant holdings, some doing ok others not so, but my main holdings and always will be (thank goodness) are in what are deemed value stocks.
2517

ditto