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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.

Courtesy of Moneylender on ADVFN who went to the AGM:
Overall it was a very positive and constructive AGM, all resolutions were passed and all directors were present. GC opened the meeting introducing all of the Directors and then proceeded with the routine business. The main presentation was put forward by John Wardle, who was quite happy to answer and explain any questions or points as they arose.
The main points are that Platinillo1 will be drilled first due to the availability of a Rig. This will take place soon and will take apx 30 days to complete including testing. It is my interpretation that by end of August we will have the result of this drill. This will then be followed by the Re entry to Alea in Q 4 along with another drill by end of the year. If all three are successful then we could be producing circa 3500 bopd by year end. There will be a further two wells targeted, dates to be agreed, totalling five for the Alea licence.
Alea lies some 8 kilometers North of the Victor Hugo field in Equador and lies on the same faults, although it is not being fed, by this much larger field.
If both the upper and lower sands are oil bearing then I think we will have a field that
Has some 70 to 100 mmbls and if we are able to negotiate Repsols share in full that will mean 60% to us.

Fenix, of which we have nearly 50% is targeted to produce somewhere between 17 and
64mmbs of oil. Its comprises of La Luna source rock that has produced several large fields in the surrounding areas and there are lots of live oil seeps along this fault.

Paraguay is progressing but is a much longer time scale. It is likely that a farm in will be announced in the next 12 Months on a 50/50 basis. There is also a 4th licence that is in application, Alta Parhana South, 1.2mmha.

There are several near term projects being negotiated and will be announced before year end. Prima Vera and PLO are both dead and buried and will play no further part in the company expansion.

Overall John Wardle gave a very precise and informative presentation and came across as very positive and excited with the various prospects in progress, especially the Fenix one. Institutional support was necessary as the cash to continue current operations was rapidly being depleted. Now with the completed Placing the management have the funds necessary for ongoing projects and any near term prospects that are offered.

I personally am much happier that we now have a management team in place that have the confidence and ability to make CHP(AMER.L) a profitable and successful company.

I cant get a quote up with amer.l HELP!

Ive found it just AMER

Well done.
Certainly been a little confusing this morning.

Sharesure are you starting a new thread on this?,it would be appreciated by MANY.

Time to move over to AMER.

Capetown, I will do early next week as I suspect that there may be a few announcements to kick it off.

Suggest that this thread is terminated and anyone interested in posting in the future moves to the Amerisur thread. I'll re-establish the graphs in that thread when I have figured out how to do it unless someone else knows how and can give me the links to them.

Couldn't find the new thread, sold today however at a 50% loss.......

Some may be happy that you couldn`t !! - not nice to read - bad luck