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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.

Sharesure
Some news would be welcome as there is a lot more to come

Sharesure,i did do some of my own research,would not have bought this stock if it were not for the contributions you have made,GOOD or BAD i take FULL responcibility for the outcome of chp,i have a feeling its going to be awsome longterm.Cheers MR

If they don't get something out soon on Hardman report/newspaper rumours we'll be drifting back to pre-xmas levels....DOH!!!!!!!!!

Yes Christmas is approaching fast.....

Like I said, reckon this Wednesday.

With the market off 90 points issuing news today would be pointless. Not a good market to do anything in at the moment.

I can't see these nervous markets going away anytime soon.
Perhaps they would be better off putting out news/info as and when, if only to support recent price's and take us to a wider audience?

sharesure...when is a good time, recently....

I wouldn't be surprised not to see anything before September now we're in the summer doldrums. Geopolitical concerns escalating with Israel/Lebanon, Iran unresolved, North Korea causing nervousness in the Far East, oil pipeline attacks in Nigeria, oil rising over $75pb....it goes on. Another red day in NY and perhaps we're yet to see the carnage (not necessarily CHP) but broadly across all markets. After all we haven't had any sort of capituation yet. Perhaps we're nearing great opportunities in some stocks. Might be best to take a long summer break and open a nice crisp bottle of Sauv Blanc and enjoy the sunshine.

vistauk, agree, the market is difficult to read other than that it seems a very nervous time with none of the optimism of 3 months ago. That can be a good thing in that there is no froth on share prices,; I do not think that there is with CHP's sp at the current time and I am sure that none of the last Placing institutions think that either.
In spite of all that I would still like to see now what Hardman and Co have to say about CHP's prospects, particularly if it gives a range within which shareholders can decide how optimistic or pessimistic they wish to be at any one time. After all there will be opportunities to re-assess prospects over the next few months as GED drilling on the next door block at Primavera probably before CHP do the same; GED's drilling results would give an indication of oil strike rates which CHP might expect. I hope that CHP's report includes plans of their blocks which show what has been found nearby because there have already been several good oil finds already.
Also the Hardman Report will not be the only news to come out in the short term.

Sharesure, do you expect as and when the Hardman report becomes available this will be posted on their website as I know they don't put everything up there - perhaps we need to register as a private investor?

Greyhound, I think that if you want a hard copy, registering with CHP either by calling or on the website needs to be done now. I know that the company is anxious to ensure that everyone gets the information at the same time because it is price sensitive, and that not all of the information would be that easy/possible to put in an RNS eg plans of their Colombian blocks and information on neighbouring blocks/oil finds.

Sharesure, appreciate that. I'm already registered with CHP for email updates and do speak with Martin Groak from time to time. I was wondering how they'd best disseminate the information as I'm not expecting an RNS for this.

WISH i could top up at this SP level,12 a gift!,guess this is why cash is king ,to be able to take advantage of these dips and turmoil,good luck all

Slightly off topic, but another one of my oils, Emerald Energy having success with another well in Colombia - so there is oil out there guys!

Congratulations on emerald greyhound,lets hope there is loads of oil down there for all of us!

I'm a lot more bullish on Chaco and endeavouring to hold as long as possible - certainly to reap the best tax advantages.

We've got a small piece in the Daily Express today according to the other side.....
Chaco Resources was steady at 12.5p as traders suggested that a bullish report on the Colombia assets was on the way to fund managers...

If anyone has yet to get themselves registered on CHP's website for email updates now would be a good time to do that since I think that might be the most likely way to ensure that as a private shareholder the Hardman Report is received at the same time as brokers/press receive it.
The Daily Express expects it to be bullish; I am confident that they are right on that since CHP at the current sp looks to be far too low. Not a ramp on my part, just my assessment of their potential over the next few months, with or without a difficult market.
Incidentally, regret that my prediction that the Hardman report would be out this last week proved to be wrong - timing of CHP's news flow is in my experience difficult to master; the main thing is that the eventual news, when it has come out, has so far always exceeded expectations.
Apart from Hardman Report there are at least 3 other news items which might be announced relating to new and existing areas.

Sharesure
Thanks for your post-hope you are right about resisting a takeover until we get full value for our investment.