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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.

ged flying!

GED .... yes sort of, but up 10p on minimal volume with 5p spread

pablo,,i like them juicy like mango,,,please much soono

Pablo Escobar,

Post No. 3462 - Any clues of exactly what we should wait for and within what timescale please?

Sharesure,

How confident do you remain on this and now that the sp appears to have settled at this level, when can we expect upward movement in your considered opinion please?

Thanks.

Stop bugging poor old sharesure, he's in exactly the same boat as many of us still holding. If you want a punt, do so, if not, stick your spare cash in your bank account....here's hoping

martin ... your comment is right in essence, but there are plenty of other plays on which to place one's money ...... certainly it sometimes looks to me as if some "friends" here have far far too great a proportion of their portfolios in what can only be described as out and out gambles - e.g. CHP, GOO, SEO, SUB, and so on ..... very very very occasionally, one of these comes good, but imo one might just as well have stuck a pin into the stew pot as to try logic in picking one for the long term ...... buy these stocks if they have visceral appeal, but the wise man will be prepared either to cash some in when decent profit appears on the back of hype (the usual cause!) or to cut and run when it looks to be horribly wrong.

I agree. In my view, this is a medium term prospect - say 1 to 2 years. It is unlikely that there will be any substantial upward movement until CHP has some proven reserves. That might be during 2007, but more likely to be first half of 2008.

Annie, Martin is right. I did think that CHP was perhaps more certain of earlier success than many other explorers because of the team involved. In spite of what we have been through with PLO and then Primavera I still do but I think that apart from possible news on Paraguay and director/institutional buying in the run up to the 4th quarter and just maybe more acreage around the latest field there will be a period of inactivity. I am holding for the 4th quarter because if I am right then all of my holding will qualify for maximum taper relief. I also do not think that the current team would have got involved if they didn't think Alea and Tigra were excellent early production targets. Neither would the recent placing instsitutions. I also believe that the current mgt may be operating a policy of under promise - over deliver, so would expect things like timescales/outputs to be more than met.

Sharesure,

Thanks for that, I've held since August '05 and will continue to do so.

Blue Oar are apparently preparing an investor note re Chaco following their tour of CHP's blocks. It is likely to be encouraging and might confirm that the new Colombian block has considerably more oil in place than Platinillo - something the company has not yet commented upon.

Thanks Sharesure, we could do with some cheerie news.
2517

Hooray some good news hopefully.8-) Any idea when this note may come out.

the chart is bleak indeed with a dead cross between 25+50 dma having formed a week or two back ..... no obvious support level so some really good and solid news will be required if a meaningful revival is to be seen

with some reluctance, chart(s) below .....

The BO note would explain all the buying then, not.
If it was that promising and imminent the price would be rising not falling.

Hear from another bb that there is potential good news imminent!!!

and of course whoever that is will have the ear of the indiscreet CEO who told whoever it was in strictest confidence? ..... was it Maestro by any chance? .... lol!

I dont normally believe in south american whispers, BUT this one might be hopeful.

even if just wishful thinking rather than factual .... lol

Clarity through communication resulting in confidence is the future objective correlative.
The oil in Alea has not gone anywhere.
We still have 25% of a guaranteed 38m barrels which in oil-speak could result in a max of 70m plus barrels. At say as little as $10 a barrel to Chaco, nay Amerisur Resources, that equals quite some income for a small producer

How should this guaranteed equity alone be demonstated in terms of share price?