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.

CHP looks like it may have finished the correction of last Tuesday's 8.8p high. I managed to get in at 7.6p this morning and will stay long while above 6.9p.

lynnzal

Be interested to hear your logic on why 8.8p was overpriced, everyone is entitled to their opinion but have you read the recent RNS's and postings. The company is very undervalued, it actually has proven oil reserves and in addition applications due in Colombia and Paraguay.

I assume lynnzal used the word "correction" in a technical sense - a retracement, not a putting right of something that was wrong.

What's the hurry - since you all profess to be long-term holders. What else were you going to do with your money even if the price was 12p - sell? That's short-term in my book - which is what I'm in for.

Hi Stewart, I have not stated that 8.8p was overpriced, the market did that when it sold off down to 7.55p last Friday. However, I would suggest that the 32% gains over 3 days may have prompted a few of the short term players to take profit. I'd be interested to see the maths behind the 'undervalued' in terms of recoverable oil etc.

Stockdog, a correction/retracement can be "putting right of something that was wrong". Perhaps the market rallied too high too quickly? 30% over three days or 43% higher over 8 days....Rarely do these markets run in a straight line.
However you may want to look at it, the inference is that it is a 'blip' in the underlying trend (higher).

At the moment I am a short-term holder of this stock and wish I had bought in at lower levels, as I too may have taken profits (and maybe bought back in again).

Regards, Lynnzal

stewart3250,i hold lots of chaco shares too, but until the oil is out of the ground and in the barrels and being transported out of a particular location i don`t think the price will rocket. Like stanelco a lot of patience will be required,but once the oil starts flowing then so will the shareprice.

Pisces, Stewart is right in his calculation of the value of the oil in the ground; when it is at the wellhead it becomes worth much more ($35/barrel cf $5/barrel) I think that the lag in the price at the moment has more to do with the need for the mgt to re-establish a reputation for delivering the goods after the GMS history (not actually their fault, more the fault of Italian bureaucracy and the rest!).
I would bet on an announcement this week on the other two Colombian wells and possibly the 3rd Paraguyan prospect provided the Colombian Authorities don't hold up the decision process.

Could be a while then Pisces - is that what you are saying ??

Not sure I have that patience
Baza

Hi Lynnzal,

If you look back on this board you will see the maths regarding a fair valuation regarding the ALEA field, look at posts 615 and onward, you will see quite a few estimates, really depends on the $ valuation in the ground that has been used.

Lets assume $10 x 38.1M Barrels = 381M *25% Chaco share = 95M / 474M shares / 1.75 /$ = 11.4p

pisces, shareshure
with all due respect, how then do you explain EEN' s sp, which hasn't rocketed and they're now producing 4000+ bpd, from the same country.though 1 do not know what the reserves total

As a holder of both stocks, I'm expecting a rerating for both EEN and CHP and would not be surprised to see EEN at 6 in a couple of years.

Stewart
Are you adding in anything for Paraguay?

bodeng, I just simply valued ALEA, nothing for Paraguay, would estimate currently 4p , nothing either in respect of the two applications in Colombia.

I have said many times why does the share price not relect the valuation, I can only assume it takes time for the market to fully include the valuation, rather puizzling though. If Chaco were actually selling and producing oil it may be different, but I take
ddoc2 point on board regarding EEN, interested in others views.

ddoc2, I haven't followed EEN so cannot really comment. Oil in the ground has a value; I used $5/barrel to apply a heavy discount; others would probably be correct in thinking that it should be double that figure. At the wellhead (another 4-5 months?) it will be worth at least $35/barrel, or more at current oil prices. The enormous potential of Paraguay as an oil producing country is in my calculations at next to nothing which is arguably too pessimistic.

Stewart, thanks very much for the quick response.

4 V 1 on Level 2.

WDBM high bid.

Very quiet since yesterday morning!

Looking at the Trades today, I have good reason to know that the Sells are not all Sells. Anyone else get the feeling that a false impression is being created? I can only think that a few MM's want to get some stock in preparation for some more news, or as that just cynical??

Nice 500,000 buy at the close!

Chaco Resources PLC
10 November 2005


Chaco Resources Plc ("Chaco" or the "Company")

Director/PDMR Shareholding

The Company was informed on 5 November 2005 that Jon Pither, Non-executive
Chairman, purchased 833,333 new ordinary shares in the placing on 4 November
2005 at a price of 6p per share.

Mr Pither now holds 983,333 ordinary shares representing 0.2 per cent of the
company's issued share capital.

Someone posed a good question on another bb, does the non-exec's purchase mean chp can't announce price-sensitive news for the regulated time now or doesn't it apply with placings?