LONDON (AFX) - Chaco Resources PLC said it is proposing the reverse takeover
of two Paraguayan companies -- Amerisur SA and Bohemia SA -- from Candey SA and
Daniel Sztern in exchange for 27,322,404 new ordinary shares in the company.
It also plans to raise up to 750,000 stg before expenses in a placing of
36,585,365 new ordinary shares.
The company's shares were suspended on Sept 3 and it said it expects this to
be lifted today. It has called an EGM for Nov 15 to approve the acquisition and
placing plans.
Amerisur holds two oil and gas prospecting permits in Paraguay and is the
registered applicant for exploration and exploitation concession contracts over
the same permit areas. Bohemia holds registered applications for an oil and gas
prospecting permit in Paraguay and for an exploration and exploitation
concession contract over the same area.
The exploration areas covered by these three applications comprise a total of
approximately 48,000 square kilometres of the Curypayty and Parana Basins.
Chaco said these basins extend respectively into Bolivia and Brazil, where
commercial oil and gas production has been established for many years from
similar geological sections.

cc

If we assume that the placing is at roughly the current sp, then they would need t issue a further 53 million shares to fund it. That would mean that there are 443mn shares in issue.

If we also give this oil a value of $5 a barrel (in the ground) then chaco's share should be: 25% of (50mn *$5/1.76) = 35.5mn. This should be all profit and is based on a 50mn barrel field. On a PER of 2 the sp would be around 16p. This would ignore all other assets, developments.

SS

Some questions for the AGM

1. What will be chaco's share of future oilfields?
2. What role will EXPET play, if any, on developing the first field?
3. What role, if any, will EXPET play in developing future fields?

Cheers

Alfred

Alfred, Ok, I will ask. Given the amount of recent sells and the price holding up because WDBM are high bid that all signals to me that tomorrow should be good for the sp.

Its good to get some positive talk. I'm starting to get a little worried but am holding tight. I get the feeling peoples expectations have fallen from where they were. I still feel 20p is realistic but maybe the time scale is a lot longer.

cc

sharesure,

If this is deemed to be a stupid question (i'm a novice ) please ignore.

Will there be any further dilution for future fields?

cc

CC, It depends when those opportunities present themselves. If the come after the first Colombian area comes on stream (?6months?) then a dilution may be unnecessary. If before that it is highly likely.

CC

I can give you my thoughts on share dilution, there would only be a dilution by an issue of further shares if funding was not available from chaco itself, I suspect they will try and bring oil on stream quickly to give themselves a + cashflow and use this cash to fund other developments.

Its all about timing it will depend on the revenue streams and how quickly they would wish to develop any further fields. The companies aim is profit and to enhance shareholder value, they will not want to dilute if they do not have to, remember the directors have options and so it is in their interest not to dilute.

Sharesure
Will you ask for the latest update on Paraguay at the AGM.

Thanx for all the info guys, this is not the time to panic 'sell'.

I read somewhere ' the stockmarket is made by the impatient giving money to the patient' (something like that!)

cc

Bodeng, Yes, certainly intend to; although it has taken a back seat with all the focus being on Colombia recently, I think that a partnering deal on the vast Paraguay licence areas could be a good move. A deal with say a company like Petrobas would give huge credibility in the region to CHP

SS,

from my point of view there are a number of areas I would like to see clarified at the AGM:-

1. what is the position with the rights acquired with Bohemia SA? There has been no announcement that these have gone through parliamentary approval for transfer to CHP and therefore CHP has not issued the agreed shares for that area. So when is that expected to happen?

2. the seismic results for all 3 Paraguayan areas were to be re-analysed using modern techolnogy/facilities and the results published (I thought by end of September). When will there be information available on the findings from these analyses and when might we know more about where CHP will be initially drilling (and who CHP will be partnering with) ?

3. How many shares were authorised in the recent placement and at what price per share? The directors had the authority to use up to 125M, but we haven't seen how many they have issued or are committed to issue for Colombian deal(s)?

4. I also echo Alfred's questions about the role of Expet. Are they involved in the deal which has just been announced - in which case CHP is actually paying $7.5M for 12.5% of the future profits? When will we be hearing about (further) deal(s) involving Expet? In particular, previous company information referred to a TEA area which CHP had applied to take over for e&p from an existing holder under the new regulations. We had been told that the incumbent had not counter-offered within the allowed 30 day period, but we have had no further information on that deal?

5. It is known that security is an issue in the Putumayo area. There have been numerous reports of damage (by rebels and drug cartels) to drilling rigs and to the pipelines in the area. The recent rns gave no information or comfort on the current status of unrest in Putumayo and how secure the area is for CHP to be working there?

I know you won't be able to ask all of these questions. I also know that even if you could ask, it is unlikely the company can give answers to some (unless the deals have advanced to point they can do so). However, these are definitely areas that I would expect the company to provide some information about and also some comfort to shareholders to remain loyal and committed. Without good answers to some of these issues, there is high probability for a large sell off of shares tomorrow.

Hopefully you can bring back some good news.

Thanks,

camlad

Camlad, OK, will try to cover those points with mine.

Sharesure, best of luck

MPH are WDBM showing any signs of still soaking up stock? The opening price doesn't look right for a company about to announce good news in 3 hours time. My personal expectation is that the AGM should add at least 50% to the sp, possibly more. Obviously not a view shared by those dumping stock ahead of the meeting. Anyone any thoughts?
Thanks, Stewart.

Hi Sharesure, WDBM is indeed high on the bid. Anyone selling stock this morning is just giving it straight to the man in the know.

Thanks, MPH. All the trades so far seem to be small. Better for CHP to have a share register with fewer larger shareholders anyway!

sharesure,

Are you still as confident of the long term outcome as always. You seem to be a man 'in the know' more than most so your reasurance/doubts would be valuable.
Hopefully the AGM will assist you in this answer.
cc

CC,

He has probably set off by now, not sure if he has a lap top with him.

After all this time I cannot understand why anyone would sell 2 hours before the AGM, if there was bad news there would have been a flood of sells and I mean large sells, only about 500,000 in total and WDBM seem to be taking them all, some have sold @ 7.5p.

I am in @ under 6p average and am confident of a good outcome at the AGM, but you need to hold your nerve or let the MM's pick up your stock on the cheap.

Only other observation would be that prior to excellent news you usually get a number of buys and we have not seen that at the moment, perhaps anyone who wanted in was already in. IMHO

I agree stewart, why anyone is selling prior to seeing the full details I don't know!!

I'm looking forward to seeing the whole picture and indeed seeing sharesure's comments.

What time does the AGM start?

Alfred

Alfred,

11.00am