______

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.

Fair enough Sharesure, thanks.
Had a browse at Sefton yesterday so have little doubt what the report could do for us.
Am considering a further top-up at these levels but would now have to sell something to do it.
Decisions, decisions........

Alex, can't believe you've "top sliced" SER already, let the sellers get out over the next few trading days so you can get bigger profits... Hardman are putting 3p estimate on this which I think is too high. Should still see stability at round 1.2 in the coming weeks......

Sorry Sharesure thread is for CHP I know just had to say that. Going by the Hardman report for Sefton, Sharesures analysis of "1m barrels is worth 1p on the sp" seams a rather modest discounted calculation. I'm sure there are many that share the opion we should expect to see more!!

Explosive, The date for the release of the Hardman Report and its contents are price sensitive - in the right way judging by the Presentation comments in May. I know what I expect to see but if I put that on here I would probably be told I am mad, ramping the stock or worse - so let's wait until it's published. 1p per 1m barrels is a conservative calculation but although the price of oil is currently well above the figure I used to arrive at that, it may not always be. Of course it could go even higher courtesy of Iran/Pres. Bush. The purchases of a couple of oil explorers by Anadarko and the premiums paid are also likely to help sentiment here because Chaco is unlikely to be left independent for long once others see the scale of the asset potential in both Colombia and Paraguay

As Paraguay is at such an early stage can we assume that the Hardman report will give us very little for our acreage there?

I'll be off line for a few days now, wonder if I'll miss anything?????
Good luck Chacoers, see you soon.

I'm hoping the Hardman report will verify CHPs oil assets in full or part. Should the report do this Sharesure then I too am expecting big things and a markup...

should the hardman report say anything, I'm expecting loads of cash
should it not, i'm expecting not alot....

I'd just like to say, CHP, I f**king love you.

blimey

you shorting it KEAY??????

KEAYDIAN, do you know something we dont?, if so what is it?

We need the Hardman Report to get some upward movement.

016622: Nope, bought a while back at about 16p

Piscec: I know bugger all, I'm a newbie to all this share trading malarky. Which also answers 016622 question, I know nothing about shorting.

KD.

I had same thoughts as pisces all day, just dashed them now. Anyone know when the hardman report was commisioned, and how long do these things usually take, are they all encompasssing or do they come out in dribs and drabs?

lots of questions any thoughts.

well wether news out soon or not just topped up again, too good a price not to.

steveo, out of available funds but I'd be topping up as well if I could.

Like Sharesure has pointed out, the timing of the Hardman report is price sensitive...... Everyone would like a heads up on this one but in reality its not going to happen... Sit tight and patience will prevail. On the subject of topping up I'm 23% down on CHP overall and am holding all the shares I'd like to risk on this one. Everyones different so please don't take that as negative context, wouldn't be holding if I was anything but positive on CHP and the likelyhood of good profits!!

Quite overweight on this one now... but have a good feeling so topped up again.
Last placement went at 15p so that should be an indicator of some institutional confidence at that price.

market conditions have brought this temporarily down...as this is a rollarcoaster, next move should be back up (only thing to keep in mind is... have we reached the bottom yet?)

:)

We could use an update of some kind.

bodeng, it must be a positive update, look what's happened to VOG, their holders were keeping on about news and when it arrived the shares plummeted.
2517