______

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.

Some very large buys today. I'm guessing the 500K trade at 3.33 pushed the price higher late in the day. Don't think it was reported until an hour later because of the size. Most of the other trades appear to be in big blocks of 50K or more. Wonder where we'll go tomorrow. :-)

Strawbs.

It would seem the contract for Primavera has been awarded to Chaco and has been signed by Argosy as the operator, posted on competitors board.

You can find it in the guts of the ANH website. Just a one-line mention. Search "primavera" then go to the link for "contratos firmados en 2006". You will see PV at the bottom of the page.

25
112
Primavera Argosy 9/05/2006 E&P 146,100 (area) 2 pozos, Rep 300 km 2D

http://www.anh.gov.co/html/i_portals/index.php

Nice find Stewart - Is this what cause todays little tick up - or do you think there is more news in the pipeline ?

The Times May 12, 2006

Rumour of the day

Aim-listed Chaco Resources, the Latin American oil and gas explorer, rose on word
it is close to receiving a presidential decree from the Paraguayan Government under
which it will secure its third concession in the country. If granted, the large size of
the concession, called Bohemia, is expected to see Chaco seek a farm-in agreement with a South American major.

Chaco Resources PLC
12 May 2006


AIM: CHP
12 May 2006


CHACO RESOURCES PLC

('Chaco' or 'the Company')

Exploration and Exploitation Contract for Primavera Block in Colombia is
Finalised

Chaco Resources Plc (AIM:CHP) announces that the Exploration and Exploitation
Contract for the Primavera Block in Colombia was finalised on May 9, 2006
between Argosy Energy International as Operator and the Colombian Government
(ANH).

Participating interests in this contract are:

Argosy Energy International (Operator) 15%
Chaco Resources Plc 55%
Expet S.A. 30%

Chaco is committed to fund the first year's exploration programme of
reprocessing and reinterpreting 300km of existing 2D seismic in the block and
drilling two exploratory wells. Chaco will also put infrastructure in place
such as access roads, etc. The estimated cost of this programme to the Company
ranges between US$2.5m and US$4m depending on locations of wells and
infrastructure required.

Technical Director, Mr. Graeme Stephens commented 'This is an exciting new
exploration project for Chaco. A number of large undrilled structures have been
previously mapped in the block and some old existing wells located immediately
to the east of the block which appear to be off-structure have had good oil
shows . '

his is now the third Exploration and Production (E&P) project Chaco has
undertaken in Colombia, with the other two being a 25% farm-in to the Alea
oilfield in the Putumayo Basin, operated by Ecopetrol, and a 54% equity in the
Puerto Lopez Oeste E&P Contract in the Llanos Basin, operated by CCSA.

-Ends-

For further information contact:

Martin Groak, Finance Director
Chaco Resources Plc
Tel: 07949 209 301
Website: www.chacoplc.com

Marc Young
Daniel Stewart & Company plc
Tel: 020 7776 6550

Simon Robinson / Ana Ribeiro
Parkgreen Communications
Tel: 020 7493 3713


Notes to Editors

Chaco Resources PLC
12 May 2006


AIM: CHP
12 May 2006


CHACO RESOURCES PLC

('Chaco' or 'the Company')

Exploration and Exploitation Contract for Primavera Block in Colombia is
Finalised

Chaco Resources Plc (AIM:CHP) announces that the Exploration and Exploitation
Contract for the Primavera Block in Colombia was finalised on May 9, 2006
between Argosy Energy International as Operator and the Colombian Government
(ANH).

Participating interests in this contract are:

Argosy Energy International (Operator) 15%
Chaco Resources Plc 55%
Expet S.A. 30%

Chaco is committed to fund the first year's exploration programme of
reprocessing and reinterpreting 300km of existing 2D seismic in the block and
drilling two exploratory wells. Chaco will also put infrastructure in place
such as access roads, etc. The estimated cost of this programme to the Company
ranges between US$2.5m and US$4m depending on locations of wells and
infrastructure required.

Technical Director, Mr. Graeme Stephens commented 'This is an exciting new
exploration project for Chaco. A number of large undrilled structures have been
previously mapped in the block and some old existing wells located immediately
to the east of the block which appear to be off-structure have had good oil
shows . '

his is now the third Exploration and Production (E&P) project Chaco has
undertaken in Colombia, with the other two being a 25% farm-in to the Alea
oilfield in the Putumayo Basin, operated by Ecopetrol, and a 54% equity in the
Puerto Lopez Oeste E&P Contract in the Llanos Basin, operated by CCSA.

-Ends-
Maybe this is not the only news we'll get today; Bohemia block news is likely to be next

Bohemia news can't be far away, no smoke without fire etc etc.

Morning Sharesure and all - Excellent news (as you predicted) - the future is looking rosy.

Here is to the next RNS which cannot be far away

Cheers Baza

Offer already up to 20p pre opening ??

Sharsure,fantastic news,think lots of buying yesterday from people who knew this as coming?

There's certainly a lot happening, it's going to be an interesting day, not to mention year.

All great stuff, things looking very exciting for today.

A lot of small scale selling.

A lot of small scale selling.

Can`t wait till this bottoms out, never ceases to amaze me how many day traders there are following chaco.Surely anyone in their right mind wouldn`t sell these now.Looks like the momentum has slowed down as i speak, would be nice if they went the other way now.

Do not lose sight of the fact that a licence is a long way from production

Cynic i appreciate that but cairn energy used to be these sorts of prices in its infancy ,as sharesure said.At present we are not buying a licence but huge potential even i`me excited about this one.

Cynic,anyone who bought at 15 last week and sold @18.5o have done very well,as a longterm holder i am happy to see this happen just as it did on the last rns,short term and long term traders will all do well with CHP

Only a lunatic would short this stock now and only a short-termer would sell at this juncture. When the Bohemia concession in Paraguay is announced (hopefully in the next RNS) that is when we would need to re-think the upside potential here. Primavera is an excellent block and should make CHP a much larger company but Paraguay has the potential to make it vast. I don't think many have yet focussed on that potential.
Re the possible Placing of 30m shares I have no back-up to support the rumour that CHP have issued those shares or at what price. I would prefer that they leave issuing them until we are at least firmly north of 20p.