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.

News will come through in time we will have to wait!

Chaco Resources PLC
27 October 2005


CHACO RESOURCES PLC

('Chaco' or 'the Company')

Placing to raise up to approximately 5 million

The Company is pleased to announce that it has conditionally raised 5,080,840
(before expenses) through a placing ('the Placing') of 84,680,667 new ordinary
shares of 0.1p each in the capital of the Company ('the Placing Shares') at a
placing price of 6p per share. The Placing proceeds will be used to fund its
commitments under its joint venture with Repsol Exploracion Colombia S.A.
('Repsol') in Colombia.

The Board of Chaco Resources plc announced on 3 October 2005 that it had entered
into a farm-in agreement with Repsol to earn a 25% interest in the Alea Field in
Colombia's Putumayo Basin (the 'Alea Field') by funding certain appraisal
operations.

The Company's financial commitment required to earn the 25% interest is capped
at US$7.4 million for the first phase of appraisal of the Alea Field. Chaco has
agreed to fund the cost of re-working existing seismic coverage, re-entering and
testing an existing discovery well, which flowed oil at 533 bbls/day in 1988,
and drilling a new step-out well to determine the possible lateral extent of the
field (the 'Project').

The funds raised by the Placing will enable Chaco to meet its obligations for
the Project. Any funds raised pursuant to the Placing but surplus to those
required for the Project will be used for general working capital relating to
the Company's ongoing activities in Colombia and Paraguay.

It is anticipated that application will be made for the Placing Shares to be
admitted to AIM on 1 November 2005.

Chairman, Jon Pither, commented 'This successful fund raising in what was a
weakening oil sector market has highlighted the intrinsic value of the Alea
development project. We also believe that investors in the placing recognise the
opportunities the Company has to identify additional low risk development and
exploration projects in Colombia through its excellent local contacts in the
country.'

Further details of the Project and the Company's other projects are contained in
earlier announcements released by or on behalf of the Company which can also be
viewed on the Company's website*.

So - are we likely to see a further weakening of the share price until more news happens ??

I wouldn't have thought so bhunt. Institutions will have wanted more than just a token discount. If they are paying 6pence then Chaco's worth 8p+ immediately, even without any other news.

The calculation that Martin Groak did in an e mail to me earlier suggested Chaco is worth at least 12p now.

Before Colombia was even mentioned the share price was 4p.

Net value to Chaco @ $50 per barrel = 30million minimum.

Those involved in the placing have got a very good deal and it was suggested earlier that the placing was oversubscribed.

mabel

perhaps I am being impatient - I was kind of expecting this to have jumped to 7p on the news of the placing - so am a bit disappointed. Perhaps as the placing seemed to be common knowledge - it was already priced in ?

Fingers crossed

Baza

Sharesure/others - with the placing announcement is it possible that a timeframe with regard to Colombia announcement is in the offing?

Sharesure
Do you expect the SP to rise today just on the placing news?

Its seems very quiet, almost like people are not sure about the 6p placing, personally I am glad it is now done. If its done @ 6p then I would have expected a rise to 7.5p or even 8p as it would have discounted, the investors would have had alot more information than we have.

It would have been better if they could have announced more on their applications at the same time, mabye more later today, both are now due, the first is overdue, thats good news I would say

.

Stewart, I agree the placing was well known and probably priced in. There is no reason now why this shouldn't drift upwards from here. 6p is now a nice springboard to jump from.

Put yourself in the shoes of the Institutions. You would not invest hard cash in anything other than a golden egg.
Your bonus for investing the cash with chaco? Shares at a hefty discount to the true value.

Well lets just hope so MPH-I must say I too am quite pleased with a 6p placing-means most of here are feeling safe with a good investment, knowing the placing is at a discounted price.

I do agree that it should drift towards to 8p mark-well hoping at any rate......!

The 6p placing should put a floor on the sp at least and its not often you get a chance to buy on the open market at similar.
I think future newsflow from Alea & Paraguay should ensure we have a sound steadily growing investment with potential bluesky opportunities that could be announced anytime.

Well lets hope so - I am just a tad cynical at the moment

Nice round up Dibbles! :-)

just bought 10000 more now have 180000. very happy.

why do all my dealings come up as a ?

Price steady and a v. tight spread, seems to say the risk is much reduced on this one with prosects of positive news from Colombia nd Paraguay - agree price should rise from here. So I've put a toe in the water mid-morning after all early day volatility has had its chance and stayed inn bed.

The dog reverses his stance - largely due to preceived reduction in risk post fund-raising.

Good luck to us all!

sd

BTW - my purchase at 6.65p is among the green ?'s today - so I assume all otehrs are buys too. The sells are all at 6.60p. The 500k T sell looks like it could be one of the placees passing on stock to the retail market. Price holding, so looks good on average, I'd say.

Why so quiet all of you today?

sd

Just wondering what a placing actually means.Is it purely aimed at institutions because of the volumes involved and why at a premium to the current shareprice, isn`t that unfair on all smaller holders. I currently own 500000 of these but i didn`t get them at 6p. Any comments welcome.