______

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.

capetown- this may do well overtime but at the moment cant see how they can give it such a high cap at this stage.

c.30m- 4p would be generous but 50m is ridiculous imo. but as mentioned it is a retail favourite so it may well rise on the back of nothing.

Sharesure
Do you think tomorrow is agood time to buy or better to wait?

the chart tells its own story ...... now tell me why you think it is good idea to buy

Cynic - we are all well aware of your views in respect of this stock.

at least my views have some logic rather than just wishful thinking ..... and i see you do not disagree with the above ..... i actually held for a long time (by my standards) but came to the conclusion that this is basically a rubbish stock, as it must be admitted is GOO which i still hold ...... though x,y or z stock may at some time in the future come good, there is probably a better than even chance that it/they will fail like SEO, ELP, BFC etc, and therefore common sense dictates your money, or at least 97% of it, would be much better invested elsewhere.

AGM statement confirms what a number of us predicted. This should mark the start of a steady improvement in the sp as each part of the statement is now put in place. The acquisition of Repsol's share of the Platinillo field would take Amerisur's share to 60%. 3 wells by the year end could mean 3000 b/d production - enough to provide good cash flow to borrow any further funds for speeding up the development of Fenix. New areas in Colombia likely in Q3/4 and then a deal in Paraguay.

always assuming commercial oil is found

Cynic, I certainly agree with you that the sp of this company isn't going anywhere that is likely to be of interest to investors until it finds oil in commercially exploitable quantities.

Investors have always known this anyway.

the big Q is then, "Why invest?" ....... there is always plenty of time even after the event, otherwise one is just playing the sentiment game

or you hold off until too late & miss the boat...

that's bad logic ...... plenty of other fish in any case and odds of disappointment here (and GOO and lots of others) far outweigh the chances of this being a genuinely asset based rocket ....... or to continue your proposition, do you feel there was no really good money to be made with Tullow or Cairn or BP or any number of "proper" oilies once they had properly established themselves?

I totally understand your point Cynic and this is obviously wishfull thinking on my behalf, but the initial jump on any announcement of commercial quantity discovered could be quite significant, considering how quickly the sp dropped when the dusters were announced. As you state, there are much safer options out there in the same field with much less risk attached, but i personally am carrying too great a loss to sell these at the moment. Be interesting what the market makes of the AGM today, if anything. I do see your point tho to be honest

ah! so now the truth is out ...... i sold out several weeks ago, also at a distasteful loss, as i did with VIY ...... nursing a loss in hope against hope of a recovery is bad investing ..... done plenty of that in my time, but am now rather tougher on myself - thank goodness!

each to their own pal, i'll sit on mine & grit my teeth

Interesting news today although the first RNS was hardly an exciting read. But plenty to feel pleased about: Platanillo work ahead of schedule, rig booked, poss early drilling, plans to buy Repsol's share to make us the majority partner and doubling our interest in the block. Clarke and Wardle double their holding etc

and the market clearly says, "And so what!"

Cynic, don't mean to sound rude, but if you've moved on from Chaco, why don't you concentrate your time & effort on shares that you do hold, rather than constantly slagging those you don't ?

he slags the ones he does -so i wouldnt worry.

Still hold these but sold GOO on monday shy of their 9.5p high having bought @ 6.45p (many months ago I was double my money). Also sold BLVN a holding from FAO days, at a loss, I still hold SER and unfortunately PELE. I am quite prepared to sit on CHP(what's the new epic?), as I believe there will be value at some stage, and would buy back into GOO around 7 -7.25p. So I am streamlining the number of co,s in my higher risk portfolio having also sold PROV @ cost. Two I will let run are DEMG and LEAD, imo both excellent long term growth co,s. Sorry for rambling on.
2517

AMER.L from 8am tomorrow