______

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.

Price still dropping but on low volumes.

Bound to be a little boredom that news has been delayed because of new AIM Nomad rules. What is announced I am sure that the underlying story will then turn out to be better; the Nomad's intervention might prevent us getting as much as the institutions were told in terms of the potential which convinced them to go for the Placing (apparently well over subscribed ), what comes out will be free of 'puff' and therefore all the more reliable for it and likely as not will prove conservative as the announcements are subsequently backed up by work on location.

On another BB a poster by the name of 'superdealer' is saying that the delay in news is a bad sign. I have very good reasons to believe that that is the opposite of the reality. I have posed him the following question:

A question for 'superdealer're#5577 : which news do you think would be harder to issue under the new AIM guidelines? -
a) The mgt. previously thought that one of its blocks contained x barrels of oil. It now doesn't think that there is any there at all.
or,
b) The mgt. previously thought that one of its blocks contained x barrels of oil. It now believes that it contains between 8x and 10x barrels of oil.

Couple that with a recent Placing at 15p where in this 'nanny state' we are regressing into a situation where private investors will get less news than institutions because they cannot be trusted to sift puff from truth.

I don't wish to be accused of ramping or 'stealing CHP's mgt.'s thunder but I think you can figure out the answer to that question. If ever there was an example of 'bad news always travels fast' I think that this will demonstrate that the converse is also true.

Posters like superdealer don't concern me, you can see through them right away...
I can't pretend that the current trend in the markets does'nt concern me though!!!
No doubt the good will come through in the end but if investors start turning to cash it could get messy in the meantime.

Agree Dibbles - the market now testing investors' mettle. This reminds me of 1998 and hoping the outcome is the same. The institutions are there to get in as the private investors get out. We've been here many a time before - just not for a while. Meanwhile some good news from CHP would be welcome....soon!

Inflation up again today mainly due to higher energy costs...
Looks like this won't be over any time soon..

dibbles, the US inflation data is also due shortly and is expected to be up. It looks like interest rates are firmly on the up around the globe, a price everyone will have to pay. Those in cash will be best placed, hence the sell off globally. However there will be some positives (value investors) and, unless there is a recession the need for oil will still be considerable, hopefully to the benefit of co's like CHP, all imo of course.
2517

Anybody have any idea when drilling is likely to comence

Peter

BKK2 They are currently in the rainy season so not much gets done other than getting Environmental Impact Surveys completed, site roads sorted, rigs ordered and seismic interpretation done so that when they start drilling they make it as certain as it is possible to be that they drill in the right places. I suspect GED will get some drilling results through on their Primovera block next door before CHP and that will give a good pointer to what we can expect from CHP.

THANKS Sharesure

Guessed it would be a way of yet but I think like many,just hoping some positive news will not be too far away.I guess we will hear first of a contract re the rig which would then give us an idea of what is planned.

Peter

BKK2, in the short term it is worth keeping the 1p/1m barrel 'rule of thumb' value for Chaco as a guide. That has been calculated on a DCF of 10% and $60/barrel oil price. So far the 9.5m barrels at Alea and 5.5m barrels at Puerto Lopez (CHP's share only) correlate with the current sp. The market currently does not seem to want to give any credit for the potential of Primavera (although as yet CHP has not given any real info. as to what may be there) and the Paraguay areas.
I am hoping that the Hardman Resources independent Report will give a range of 200 - 600 m barrels for Colombia alone, without the added value that might accrue if they are allocated other areas in the future.

I think at times like these you have to stay calm and be prepared to react.
Therefore I will be moving all spare cash to a local rubber pants manufacturer...lol

So true dibbles, a storms brewing in global intrest rates and speculation is running high. Best to battern down those hatches and wait it out unless something concrete is announced and effects the state of play.

Some nice late purchases just going through on the close. Trying not to look at the screens until September might be the best option!

Carnage all around and Chaco stays firm. Encouraging to see.

but so even more curiously did Isoft, yet it had appalling press yet again today

interesting..... (?)

RNS OUT

Chaco Resources PLC
14 June 2006



14th June 2006

CHACO RESOURCES PLC
('Chaco' or 'the Company')

OPERATIONS UPDATE


Chaco Resources Plc (AIM: CHP), the oil and gas explorer and developer focused
in South America, announces an operations update on its prospects in Paraguay
and Colombia.


PARAGUAY:


Curupayty Block (Chaco Equity 100%)


Reprocessing of existing seismic lines commenced in late March and is proceeding
on schedule for completion in early July. Interpretation of the seismic is then
scheduled for July and August. With interpretation complete the company will
then review the results and decide whether to proceed to drilling or proceed
with a farmout campaign.


San Pedro Block (Chaco Equity 100%)


Data collection is continuing prior to commencement of seismic re-processing.
Some difficulties were encountered in locating the old seismic tapes but these
have now been located in the US and are currently being copied.


Canindeyu Block(Chaco Equity 100%)


This block is still pending award from the Paraguayan Government.


COLOMBIA:


Platanillo Block(Chaco Equity 25%)


Joint Venture meetings have been held recently with the Operator, Ecopetrol, and
the operating team put in place. Rig availability is currently being evaluated
and seismic re-processing of Alea data is about to begin. The Operator has
offered the Joint Venture a drilling slot in its current contract with a helirig
but is also seeking a cheaper option. Re-entry of Alea 1 is scheduled to
commence in last quarter 2006. In the interim the Environmental Impact Study is
under way.



Puerto Lopez Oeste Block (Chaco Equity 54%)


Re-processing of existing seismic data commenced in late March. Preliminary
indications are that a Mirador stratigraphic trap is not present, but a
conventional Mirador fault play has been indicated in the Block. Further
re-processing of the data and final interpretation will be required before the
size and shape of this feature can be determined. This is scheduled to be
completed in late July. After the interpretation is complete the Joint Venture
will then programme and shoot a minimum of 100 kms of new 2D seismic to properly
delineate the prospect. This is likely to occur in August and September with
processing and interpretation to follow in October. The nearest Mirador fault
trap is the Apiay Field of about 100mm bbls located about 80 kms west of the
Puerto Lopez Oeste Block. A decision whether to proceed into the next year and
drill one well is required in December.


Primavera Block (Chaco Equity 55%)


The Primavera E&P Contract was signed by the Operator, Argosy Energy
International, on May 9, 2006. This block covers an area of approximately
146,000 hectares in the north eastern part of the Llanos Basin.


Ten undrilled leads and structures have been previously mapped in the block with
indicated areas of closure ranging from 4 sq.kms to 40 sq.kms.


Re-processing and re-interpretation of seismic will be required to confirm this
mapping.


A number of wells were drilled some years ago immediately to the east of the
Primavera block all of which appear to have been off structure and most of which
appear to have been prematurely terminated above the prospective Mirador
reservoir. Many of these wells had oil shows and one, El Miedo 4 did not reach
the Mirador Formation but recovered 97bbls of 19degrees API oil from the Carbonera
Formation, an Eocene Formation which overlies the Mirador.


The main Mirador reservoir of Eocene age lies at a depth of less than 4,000 feet
in the block, and after mapping is complete two structural targets will be
selected for drilling commencing late in 2006.



Competent person:Technical information in this announcement has been supplied or
verified by Graeme Stephens, the Company's Technical Director. Mr Stephens is a
qualified geologist and has been a member of the American Association of
Petroleum Geologists since 1970.



Further details on the Company and its projects are available on the Company's
website:
www.chacoplc.com



For further information contact:

Nicola Brookes, Finance Director

Chaco Resources plc

Tel: 01494 431195


Marc Young Simon Robinson / Ana Ribeiro

Daniel Stewart & Company plc Parkgreen Communications

Tel No: 0207 776 6550 Tel: 020 7493 3713



This information is provided by RNS
The company news service from the London Stock Exchange

Now GS's report is out of the way, the Hardman Report can be expected to follow within a few days. That should help quantify want is believed to be the potential in each of the blocks. In particular the comments relating to the PLO block should be very positive if they follow the mgt's excitement at the Presentations.

Sharesure

I hope you are right about the Hardman report giving some potential figures
as todays RNS tells us very little that was not already known.

M