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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.

Only suggesting you take a look. Chaco can still come good but there's still lots of "ifs". Then make your own judgement

i'll support your slightly off topic comment ..... you obviously made a good move, and well done for that.

for others, i would just draw your attention to my comment on CHP a few posts back re 9.00 being a resistance

With placing at 6p end of next month, my target would be sub 6p if I decide to re enter this stock.

Good for you

there are a couple of rather bad tempered or hungover posters on the threads this morning .... lol!

A bit like seo and its the same amount.

DRIVER, HI THIS IS OILYRAG, NOT OILYWAG OF SEO INFAMOUSY. MY HANDLE HAS AN R IN IT NOT A W. I HAVE JUST GLANCED THROUGH 60 PAGES OF DRIVEL TO PROVIDE YOU WITH A LIST OF POSTS BETWEEN 12 JAN 2007 UNTIL 2 APR 2007 ON PAGE 208 OUT OF 223 WHEN I DECIDED THAT I HAD, HAD ENOUGH. HERE IS A COMPREHENSIVE LIST OF POST NUMBERS MADE BY OILYWAG. 23210 23210 23381 23468 23462 23619 23627 23752 23797 23898 23923 23940 23943 23959 24051 24119 24121 24123 24127 24129 24136 24148 24160. THIS IS WHERE I STOPPED LOOKING. I HAD STATED BEFORE TO SOMEONE THAT I HAD NEVER POSTED ON SEO THREAD, I WAS WRONG, I POSTED ONCE POST NO 23463 ON 3 FEB 2007 ON PAGE NO 1174. ALL I DID WAS TO INTRODUCE MYSELF TO OILYWAG AS WE HAD BEEN CONFUSED ON ANOTHER THREAD. I DIDN'T EVEN GET AN ACKNOWLEDGEMENT FROM HIM. IT DOES ANNOY ME WHEN PEOPLE ASSUME THAT WE ARE ONE AND THE SAME, BUT I ASSURE YOU WE ARE NOT. THANKS FOR TAKING THE TIME TO READ THIS AND I WOULD JUST LIKE TO REITTERATE, SEO, ME, NEVER.

so now you have it, from the engine driver himself ..... suppose you could change your handle to toerag to avoid any chance of confusion ... lol!

I'm clad you got that of your chest OILYWAG sorry oilyrag as in I'm the driver not the oilyrag, I have never assumed for one minute that you where the same I know you deal in oily stocks and the other oily in Well seo and oily Wife and girl friends mmm a bit confusing.

I was just pointing out that seo raised the same amount 15m and look what happened the sp as long as chp spend it in the right direction they shouldn't have the same problem.

not a dig at anyone, but just a wry observation ..... over the last few days, a number of "friends" have got very excited because there was a lot of traffic and/or sp went up by 0.25 or even 0.50 ....... today, the table has turned, for whatever reason, and sp is down 1.00, also on quite heavy traffic, but (almost) nary a comment

Sorry driver, I thought that because I mentioned a target price to get back in, that you were suggesting that oilywag had mentioned this price on SEO, and because of previous mistaken identity I assumed wrongly that you were having a go.

The drop is overdone..as it was before. This 'placing' has been in the bag for a while now by all accounts.
More news on Alea and 'other projects' soon.
More Alea and more EL Tigra/Fenix, I believe.
Low risk, high return is the motto as GC said recently.

being cynical (qui? moi? mais non!) one might think that the rise over the last few days has been manipulated in some way, so as to take up any surplus stock lying around and thus ameliorate the effect on sp of this 6p placing ...... certainly there is no guarantee that 6p will provide a floor, but whether it falls through it without bad news is, i would have thought fairly unlikely

I thought you were the french connec. just for a second. lol.

i hope i write a little more succinctly than he!

oilyrag
Apologies accepted

Uponthelowdown
Upon the low down, what's that all about?

Exactly what it says. More Alea = higher percentage of the oil contained.
Let them get on with it. I believe they are making progress and so do the investors who stumped up 15m.
More Fenix is more fenix farm-in's.
Wait for the news. Just a matter of time.

Up on the lowdown.
courtesy: Chris Smither singer/songwriter.

Cynic,i go away for one day and........,
I thought you were keeping an eye on these for us holders??,

Guess a placing is better than a rights issue,i am still hopefull.

Where is everyone- is it the calm before the storm.

Wating patiently. We have had a reasonable amount of practice so far. Probably going to be three months or so before anything serious happens.