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.

My confidence in this share is renewed. I feel ashamed to confirm that i nearly
sold out this morning at 11.30am. I took some time out and looked at the facts as I see them. Once we have the placement price confirmed, 8p is my guess, this should underpin the sp. I have an average of 5p so was never in risk of losses but I, like many had built high expectations and was already looking at a villa in spain!!

The news from ss and valentine (advfn) looks brilliant and i am now more realistic as to the time scale to achieve the goals.

We have lost quite a few weak holders today which will also be good for the sp in the future.
Keep up the good work everyone, a novice like myself appreciates it!!!

cc.

Thoughts on Chaco AGM.

Colombia.

The Alea deal announced on Monday, 3/10, is for a field Graeme Stephens (GS) regards as the best structure hes seen. It holds 30.8 degree light sweet crude. The deal is the subject of a Confidentiality Agreement with Repsol and at this stage the latter have not agreed what they will allow to be released. That is expected in 2/3 weeks. CHP also want to drill the area to establish if the oil reserve extends into the upper sand strata and also to the spill point before releasing more reserve details. Initial estimates of recoverable oil range from 20-70mb. There are two possible routes to get the oil to market (either to the west or east) which, although they involve pipelines and jungles, do not appear any more difficult cf with other areas of the world where oil is drilled. Any terrorist activity is considered minimal/non-existant at the current time.

As far as value is concerned a conservative yardstick would in my view be $5/barrel in the ground and $35/barrel at the wellhead, of which CHP get 25%. On this area alone that would give very large figures for a company the size of Chaco. Interested in anyone elses views given that the current oil price is well above the wellhead price I have suggested.

As for the Placing to acquire CHPs 25% interest there are no details about the Placing price that they would/could give at this stage.

CHP expects to sign an Operating Agreement with National Oil Company of Colombia within 4 weeks and so revenue should start flowing from this block within months.

There are two other exploration areas in Colombia which CHP are hoping to acquire but they have competition for these. I got the impression that at this stage the company would find it unhelpful to have published any information about what they believe could be the potential of these blocks. Since they expect their negotiations to come to a conclusion within the next 2/3 weeks on both areas it is probably better that any further comment is left until CHP can give that info. Both areas also require more extensive and modern seismic techniques to be applied to establish the potential.

I realise that that is not a lot of extra detail on Colombia but I would not wish to be the one responsible for making their negotiating position any more difficult than it is likely to be.

In conclusion on Colombia I think it boils down to whether as a shareholder you believe the mgt. are competent and trustworthy to pull off what could be some spectacular opportunities. There are those who have memories of the GMS days and the lack of progress in Sardinia; maybe that lack of progress was because they were so honest that they could not find a way of doing business in that area? Of those members of the Board I have met at the meetings so far, and the recommendations that I have from another friend who has known them all a very long time, I am content that I do not have anything to be worried about as far as their integrity and ability is concerned. I also believe that the chairman has a personal ambition to redeem the disappointment felt by shareholders over the GMS time and if he could engineer a rapid increase in the sp to give those GMS shareholders a way to choose whether they remain shareholders or come away with a profit from their GMS investment days then he would.

Paraguay

CHP expect news soon on whether they have been awarded a third exploration area bordering Brazil.

Of the two areas awarded so far, the Parana Basin area extends into a known oil field in Brazil. Only 48 wells have been drilled in 50 years so it is considered by CHP to be largely untested and that modern seismic methods will produce good results.
.
In the north, the Curupayty area has only ever had two wells drilled and both showed oil. However, CHP consider both those wells to have been drilled in the wrong places for a true evaluation of the potential.

George Woodcock (ex exploration mgr. of BP) was quoted as saying that he considered the Paraguayan prospects as being in the richest geology sources he had known.

My conclusion from yesterday is that it would have been great to have more information and I think that the company would have liked to provide that but feel constrained at this stage by a combination of regulations governing what they can say and also the current position with their Colombian negotiations. I am extremely optimistic that the remainder of this year should produce news that will propel the sp forward considerably. I have also made up my mind that I want to stay in this for far longer for what I believe will be even greater prospects unless, of course, something new comes to light to change that view.

Regret that the above does not include more data for others to form a view on the sp in the coming weeks but maybe others want to add to this that from their knowledge.

Ultimately, what will make this share fly is a positive drilling report/upgrade of estimates re the amount of oil in the ground. Until this information is to hand, all valuations must by definition be purely speculative.

The positives about the current situation are:

1. The original geological reports - Colombia and Paraguay - look promising
2. Drilling on dry land is presumably nowhere near as risky or as expensive as
drilling offshore
3. The management seemed to have attracted a high calibre director with a track
record. Presumably he has seen enough to convince himself of the potential
4. The governments in SA seem to be keen to support commercial exploitation
of natural resources in a realistic way.

I am staying put. It may (probably will) take 1/2 years to achieve full potential and there will/could be a lot of ups and downs in the sp during this period, but Rome wasn't built in a day.

For short term punters, perhaps oil exploration isn't the right place to be.

Thanks for that sharesure, the price seems to have backed right off, I expect it's a lot of short termers getting out.
A bit more patience is required for this one, but after this flush out I'd expect the price to creep up steadily as WDBM try to pick up stock and people start buying for the news.

Must confess to jumping on the bandwagon and have just bought 50,000@@ 6.73.

Not sure if that is a reckless trade - but the price looks good condidering the potential upside of this share will hold for the medium/longer term.

Baza

bunt1910,

Well done, I wondered who had bought, I would have bought also at that price but I am full already and have no intention of selling.

Am I missing something here, what has changed Chaco have a wonderful opportunity here to become a medium small cap company. I agree it would have helped their case if they had been specific about the field sizes and they do need to let us know about that placing price, if its 8p then the SP will jump to 9p + right away, but as Sharesure has said the management are in negotiations with other parties and details will be sensative, what they have said is that we don't have long to wait for the outcome of the two applications they have applied for and Repsol will allow they to publish details of the field size they have got very shortly.


These short termers and those with no steel just bail out so quick, it makes no sense atall, I bet the price rises later today.

I would be interested to hear other peoples views in particular on the placing price, MPH, are WDBM still high on the bid?

sorry - wromg thread

If only!!!

I think you mean SEO.

Now 1:5 @ 6.6:7 & 50k v 250k

WDBM high bid @6.6

Sharesure
Thanks for the AGM info-any idea when news of the placing will be released?

Bodeng, No; I hope that they will have the option to delay a little until the mkt. settles. With WDBM still soaking up shares the current weakness is only short term in my view.

.

Christ has anyone read Advfn its turned into a warzone!!

SS,

Any updates please mate, we need your info just as much in the worrying times as in the good,

cc

CC, Appreciate your concern. When a bunch of shorters get their teeth into a stock there is not a lot others can do other than use it as an opportunity to increase their own stake, assuming available cash. If anything the AGM helped make me more sure that this mgt. team will turn CHP into a very valuable company in quite a short time - 6 months or so. There will be several points at which CHP will be able to report further progress over the next few weeks eg deals 2 & 3 in Colombia. If either, but particularly deal 3, is successful the effect on the sp should be stunning. Apart from which, I really liked what they said about their Paraguayan blocks (1 & 2) which they will be progressing simultaneously with Colombia. If they also get block 3 in Paraguay in the next few weeks so much the better.
Plenty to go for, (my target is 90p-100p in 6-8 months) and in my view, a share where you just have to sit back and let the events unfold. In the meantime we just have to put with shorters having their fun, but in my view it won't last that long.

ss,

Very much appreciated, rough with the smooth and all that eh?
I have made my bed now and I will lie in it for a year or so and if your predictions come true I will look back and laugh about this week.
I'm sure that many who have jumped ship in the last couple of days will be watching and jump back in just as quick when we get some more good news.

cc

1:5 @ 6.6 : 7 and 50kv250k with WDBM on the high OFFER

WDBM high bid now @ 6.6

Yep - it has moved around , now
4:2 : 6.6 : 7 and 200k v 100k with WDBM on high bid