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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.

how come it took 4 hours to disappoint?

Cos the MM's took 4 hours to realise they couldn't rip off investors with a hugh spread!!

Anyone hearing or having access to Tom Winnifrith's page, hearing a buy tip, target 40p?

Grethound
Heard the same on the other bb.

Greyhound
Heard the same on the other bb.

Greyhound / Bodeng

TW's comment, made at market close yesterday, is a one line sentence published on his own BB.

Suggests Report out Monday and mentions 40p, but with no specific timescale or recommendation.

40 pence?

3 months - very possibly, v short term I think 22 pence top

Markets are looking good-Hardman report today would be great timing!

Chaco gets a mention in the Daily Express - something about it rising on rumours of a bullish update from Colombia. Anyone seen it?

Yes it says rumours in the city on a bullish brokers update on its Colombian operation

D Express market report by David Shand: "...while rumours a bullish update was imminent on its Colombian oil prospects fulled a 0.5p rise to 12.75p in South-American-focused oil and gas explorer Chaco Resources."

sharesure, any news on hardman report!

If nothing has changed with potential for CHP then 13p again was too much of an opportunity to get back in so I have done exactly that this week.

jameel106, Nothing I can put on here. all is going well on that front and other items CHP are progressing. There is some teeenage scribbler who is trying to rubbish CHP on another thread; he is known to be pathetic but claims a team from Peel Hunt are about to short CHP for no other reason than they wish to exploit the difficulties companies now have in reporting significant news. That should be an interesting tussle since the Hardman Report should confirm a few comments which have been made on here concerning just how oily some of the prospects are. Any determined drive to lower the sp prior to that report being issued (at any time from now) will be met as a buying opportunity. What CHP has which it will announce either with Hardman or either side of it which has not yet been reported or predicted is going to be a major building block in making this company an exceptional investment.

Jameel .... as Sharesure intimated, there are always a bunch of idiots somewhere who will try to (de)ramp one share or another ..... pay attention to what the likes of sound analysts like GedW, who is also on this board but under another name, rather than the ramblings of the likes of me!

I think the shorters are going to have a play for a while. At least til the Hardman report comes out. Heres to it being sooner rather than later.
I dont believe all this crap about "it will be out Monday for sure".
I dont think anyone knows when its coming unfortunately and until then we are at the mercy of the players.
If it does come Monday great. If not then I think we will see a loss but this is all short term. The report will come and the oil will come also and then none of this short term Bullsh*t will matter!!
This time next year Rodney we will be millionaires!!
Up the Redmen and Come on England lets have a performance!!

.

cynic, it could all be bluster by an insignificant little shorter ( who seems to lack GCSE English!) to close an existing position having missed that opportunity last week. There is no reason why CHP should go weaker now since nothing has changed other than we are nearer to the next RNS than we were last week. The fact that the institutions who took part in the placing very recently paid 15p when they were shown the potential, supports a higher sp than the current sp. Normally I reckon institutions expect to buy at a discount of at least 20% on a Placing. I hope that this time the next series of RNS' will be sprung on the market rather than the timing being so openly trailed before they arrive.

Every thread I read has been infected with the doom and gloom of Cynic....

i hold CHP (and GOO), though i confess to being less than enthusiastic about certain shares (SEO!) ..... by the way, if you think i am all doom and gloom, read my paltry postings on VOG!