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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.

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!

I wish I had taken note of the doom and gloom of cynic last month, could have saved me a packet. Getting a bit cheesed off waiting for this news but the best things....

So do I!

Quiet today, any views on the current state of play?
Don't know whether its a great top-up opportunity or not at the moment?
I topped-up at 14.5p thinking that was cheap!!!

sharesure you are very quiet . there is news next tuesday . says ludlow.

dibbles, not that it's anything to go by, but I know a couple of trader friends in the city who've been watching and bought in today.

greyhound
well they haven't inspired any confidence as they haven't bought many.

Tanker, Just away and really not much new to say. I am wondering whether the release of the Hardman Report is being held back because it will likely contain info useful to competitors about existing areas and that might prejudice other operational matters. I don't know anything in particular but have just been piecing together snippets of information which might add up to something quite good. Even so the Hardman Report is apparently price sensitive (for the right reasons!) so it would be nice to see it in print.

Cynic, we both hold SEO, GOO and CHP then, appologies if you took offense to my doom and gloom statement, its actully quite nice to see some contrast inbetween ramping on these shares whilst we wait for news. Haven't even read the VOG thread as of yet, this bull one week, bear the next market has taken its toll and I'm out of available funds to invest. As I'm sure many are also....
One thing I do know though was Sharesure said sell Griffin when they were in the early 90's, he was right with that one so fingers crossed his luck runs in threes.... Of course I've done my own homework in CHP and same imagine the 's but hey everyone in is optimistic!!

If only every time I heard there was news this day or that it was true!!! Lets hope something comes soon, would be good to have some big positives. Very frustrating at present. Not unlike the football, but would be good to go on holiday on a high after the last month!!!!! if you are interested in ramping VOG thread is very positive, hope predictions come true!!!

explosive, thanks for the 'vote of confidence' re GFM. CHP has a great deal going on at the moment - the Hardman Report will come along sometime/anytime, don't think that it will necessarily be the next RNS - however we are now in for a period of more meaningful news.

We are also in for a period of higher oil prices. The last few weeks crude has traded at the bottom of it's recent range. Whilst US reserves have increased I don't really see that anything has fundamentally changed. I suspect crude will start rising again back over $70...$75. Without wishing to sound like the bearer of bad news, winter is coming, the US hurricane season is here and a further squeeze in energy prices is more likely than not.

Not to mention the view of the US embassy in Baghdad - a leaked document suggests it's getting to breaking point there and could conceivably lead to a pull out. Once they stop talking to each other it can only get worse there and in Iran. Would make Colombia seem like the bastion of civilised government.

Yep the price of oil can only go one way..... And right with it those hurricans, tidal waves, cold winters, earthquakes, landslides, floods and fires.... Makes you wonder when a replacement for global oil will be found. Wasn't that long ago we kept the coal shed on the end of the house full and were a manufacturing nation rather than a service orientated one......

topped up again after topslicing SER, what a day!

Will be interesting if Hardman have the same effect on CHP!

Cor blimey.

Hardman reported needed.

Sharesure

Curious to know why the change in stance over the expection of when the Hardman report is likely to be released,You are now saying this report, you think will not necessarily be the next rns whereas previously you were saying you believed it would follow very shortly after the GS report.

Peter

BKK2, Regret that I cannot say more at this moment as it would be letting someone down.

birthday tomorrow....must be out today!.....????