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.

***OTHER ASSUMPTIONS FOR CHACO VALUATION***

The current share price is 15.25p and the base case for net present day value per share of Chacos oil assets is 264p, excluding the potential benefit from a change in the rate of corporation tax in Colombia.

Lets have a look at the effect on Chaco of some other assumptions for the oil price and exchange rate. Remember the base valuation per share is 264p.

Upside:
US$75 oil price share price valuation for Chaco 321p
US$/ exchange rate 1.60 valuation 286p
Primavera resource at 600m barrels valuation 436p
Colombian corporation tax rate being reduced from 38.5% to 28.5%, which is being put forward this year valuation 301p
Combination of the four above valuation 666p

Downside:
US$55 oil price valuation 206p
US$/ exchange rate 1.85 valuation 250p
Primavera resource at 200m barrels valuation 160p
Colombian corporation tax rate not reduced from 38.5% to 28.5%.
Combination of the four above valuation 119p

My Best View:
US$65 oil price.
US$/ exchange rate 1.75
Primavera resource at 400m barrels
Colombian corporation tax rate being reduced from 38.5% to 28.5%,

Combination of the above valuation 341p per share.

Too high? I dont think so. Chacos management is highly competent and cautious, which is why I believe they have been conservative in their 350m bls figure. Most probably I am also too cautious in my 400m bls figure

In two years time Paraguayian oil/gas assets will have been explored and developed and additional Colombian assets will (IMO) have been acquired. I have only included the Paraguay assets at 4p per share or 18m in total.

If you want any other assumptions used do let me know and I will run them through for you.

KJ

Then why is CHP not moving up?

KJ,

Even at 119p it still looks very good! Happy to wait for confirmation that the Contract has been signed.

Maybe we should close this thread and stick to Sharesures .

Aldwickk, Although I am biased, I agree. It wasn't my intention to hijack this thread, merely have as its header the events which should unfold, even though I suspect they are not going to be in that chronological order!

This thread as now been closed, please go to new one, on link below.

http://www.moneyam.com/InvestorsRoom/posts.php?tid=9730#lastread

goo worth a look!.