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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.

Why would that happen with the assets they hold?

A nice change to see the day ending in blue.

may be cross with hindsight that i sold out of VML at 20p, but am damn glad i was disciplined enough to bite the bullet here.

Looking at the graph they are forming a level of support at 6p, not going downhill. beta is only .3 something so market correction (if we have one before october) is not likely to affect stock as much as some others as they are at, or nearly at, rock bottom anyway, so it could be a good time to stock up if they acheive good results at alea and don't run out of cash. personally will hold what I have left as the spread is the real killer at the moment due to medium term no likely increase in sp. IMHO so if you want to trade best avoided for now as it'll wipe out any gains

Glad i did not bite the bullet here ,looks like we are over the worse for now,and good to see two blue days and a tick up from the 6p lows.

believe that when CHP (and GOO) actually come up with real stuff rather than just prospective maybe

Fair comment Cynic; however, I suspect that the probability of finding oil has increased due to the new management's focus on better prospects.

In my opinion, now is not a bad time to accumulate CHP stock.

Flipper, please could you diss a few of my other stocks, SID haven't moved for a while!!! And LEAD are taking a while to shift up. LOL

Blue morning...... are there rumours flying around?

Yes, rumour has it that I'm going to be less than 50% down soon ! ...Yipee ! ! !

annie - I know the feeling!
blackdown - good call.

I'm glad to say I got out and got into HAIK. Well worth it take a loo,k but not only that it's very profitable. No more messing in stocks like this for me - at least if I do, I'll take all the profit when it's there next time. Good luck!

Another good rise today,were off the horrid lows of 6p now 8p,with no news expected just now i guess this was way oversold,lets hope we get up to 10p soon,just on the known reserves,good news with take us back to previous highs before too long,have a great wkd.

capetown, indeed. It seems the "new" Chaco/Amerisur is starting to attract a bit of attention.

where is the french connection??? i would like to here see his views on chaco now.... maybe others may not , if your out there tfc please make a comeback your opinion is welcome.

hard luck; you got me instead (lol!) ...... merely an observation; you are all getting very excited because the share has had a reasonable day, rising a HUGE 0.50p!!!, on the back of nothing ..... the time to get excited is when the company has something solid to communicate.

Good old Cynic, always there to put a dampner on things. Don't think anyone's getting carried away by this recent meagre rise, but most welcome all the same. As you say tho, until any solid news is announced, the price will surely now just hover around this mark. By the way Cynic, just out of interest, do you still hold these ?

Cynic,actually it is a 34% rise on the back of nothing as you say,its most welcome for those of us that hold,i remember you predicted oxs would be 5p when it fell to 11p,now 60p,so for once wish us holders luck!!!,maybee just maybee they were oversold,as always i do respect and value your postings but sometimes we have to admitt we dont get it right all of the time,wish me luck for a change and not by saying ,I WILL NEED IT,they may yet come good so dont write chp off just yet.

no .... got out a few weeks ago but still keep an eye on it ..... probably foolishly, i still hold GOO, a similar spivvy to gargbage stock, more in hope than expectation.

CT - almost by luck, this board by almost forcing me to constantly preach common sense, has instilled certain amount of discipline in my dealings .... as a result, i have bitten the bullet several times when resiatnces or certain other levels have breached ..... overall, it has been a damn good job, though occasionally, something like VML starts its recovery soon afterwards ...... however, it has also meant that i have made double profits on some (generally good quality stocks) where i have sold at a good profit and bought back in later at a lower price and again taken a profit (or may still be holding at a paper profit) .... RTR, DOM, RTN, SCHE and MPH spring immediately to mind

It's amazing how some people who claim to have no holdings in certain stocks, or believe them to be "garbage", still feel the need to keep returning to post their opinions.
These absurd characters will veer from "this stock is going down to 5p" to "this will drift around 6p until we get some news" to "oh well, it's only gone up a little bit."
If they had said something like "Crikey guys, I didn't expect a 30 per cent rise this week" I could give them some credit. But they won't, of course. They never will because they are always right.
There are a couple of posters who said this week that it would be a good time to accumulate stock - and they were the ones who called it right. They will be quids in - and that's what this game is all about. Now I am hearing "this rise is on the back of nothing". Says who? Some people need an RNS to tell them when to take a dump.