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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.

If anyone has any suggestions for info. which could be included in the header to make it more useful, let me know. KJK's financial estimates are near the start of the posts and maybe projected impacts on the sp of each area would be a useful way of reminding us why we are CHP shareholders.

Sharesure,

I have closed the other thread and posted a link to this one.

Primavera Region (in red):

Comment in the prospector section of Shares magazine this week. Apparently we had plenty to smile about, as the share price shot to within a fraction of the all time high of 18.5p. Made me smile anyway. The comment, that is. :-) Hopefully the newer lower price will encourage some late comers. Also features on the letters page.

Strawbs.

This is the sort of stock that many who take Shares magazine wish it would write more about. Plenty of letters to the editor and no doubt he'll respond as he has intimated in his postscript to that letter.

Another appreciated post sharesure

Thanyou

goo worth a look!.

Capetown, I did respond to an email you sent via MAM; did you receive it?

Sharesure,have not recieved email from you,but thanks for getting back on here,i am away,for couple days now,look forward to more news,

Very dissapointing reaction to the news, only one solution!
#
add more, got to be the buying opportunity of the year!!!!!

Yes it is disappointing, I hold several oil stocks some for over 2 years, whilst CHP has done extremely well for me and I will continue holding for the long term, I can't help feeling that investors, particularly in oil stocks are looking for far too much from the sp. Sharesure your number crunching looks absolutely compelling and I certainly do not question your figures, but surely the professionals have run their slide rule over CHP, yet from the way the sp is reacting, it would seem that they have a vastly different (lower) valuation on CHP.
2517

ellio- i would question your choice of buying opportunity of the year- i would suggest goo at current levels!.

2517George, The numbers were prepared by KJKelly; as for the market catching up on this one, it will. I'm sure many on here will have had examples of being able to buy stocks at well below the sp the company's prospects merited. April will apparently see a round of meetings with analysts so that may prompt more interest although the best way for CHP to justify its optimism is to drill some holes very soon. I think we'll find that they are very keen to prioritise Primovera because of its potential size and the speed with which it can be drilled because of the shallow depth.
For the moment I suspect that all we can do is let them get on with it and prepare for what we all hope will be stunning results.

Thanks Sharesure, looking forward to positive drilling.
2517

Sharesure - Chaco does the rounds beginning May

billstickers :Thanks, I thought that some were planned in second half April. However, I think there may be some earlier activity on other fronts before then which will provide a bit more market interest. Hope so, because the sp is being pushed around too much even though it's the CGT time for many.

Nice to see the comment in Shares having such a positive effect. :-( Maybe tomorrows IC will have better luck. This low volume seems to be giving the MM's far to much freedom to play around with the price. I'm starting to wonder now just how low we could go! Typically annoying since I've got no spare cash! :-)

Strawbs.

Stwabs,

Yes, I've learned my lesson this year and that is to ensure sufficient spare capital to take advantage of end of financial year drops in SP in order to top up stocks already held.

Lizard fuck off ramping goo and go away, all regular chp holders i think this could go to 12p at current rates.The shareprice is falling on a daily basis since the rns and it will be a brave person who calls the bottom.However i feel once the downward momentum has stopped there will be a marked correction back up to the 15p levels.It`s just too good a company to be dragged down to these levels but that`s what market makers do for a living.

Can that kind of language be kept for ADVFN please.