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.

There you go MPH, I am sure my friend will not mind me posting this :-

i asked simon cawkwell on another board his current views on chaco,his reply was roughly as follows,,,he picked up 2million shares in the last placing,at which time he was of the opinion[informed] that chaco had the potential to go to 2,he has not sold any,,,simon i hope you dont mind me posting this here,,,i hope sc will be a regular poster here once the chaco story starts to become clearer.once news on the 3rd field is released ,i think we can look forward to some steady news flow,leading up to chaco becoming a producing oil company by april,with some exciteing assets to test later in 06,07..

Thanks for finding that stewart!

I will be over tyhe moon if it gets to 1 - but that might take a while

mph

Sorry to be a damp squibb, but I think that a $10 - oil in the ground valuation at this stage - is too high.

I would start with $2 and then that would gradually increase that to the figure you suggest, and then higher, as the management prove themselves to be more than just deal makers; production in Alea begins.

Alfred

Thanks for updated calcs MPH

Alfred - I am no aexpert in these matters and bow to your greater knowledge. Looking at the actual share price - and recognising that Chaco completed a major marketing offensive just before Xmas with zilch results - I think your estimate is nearer the mark.

Thanks though to mph etal for updated calcs - helps to keep the adrenalyn flowing

30p sounds more realistic in the short term which isn't bad!

sounds a much more realistic price short term, which is still pleasant to be honest if people have bought at 6-7p, but there's nothing wrong with dreaming

I do hope that no-one would be nieve enough to expect a 100p+ price in the very short term. My calculations were not meant to be a short term price prediction! Mearly an idea of the asset value.
However I wouldn't want to be the one to rule out a three figure sp before next year.

alfred I agree regarding a "confidence discount" for the oil in the ground. I only used $10 per barrel as previously I have used $5 pb and after some research was advised from a contact in the industry that $10-$12 is more like the standard with the spot futures price at $60+

What the calculations do highlight regardless of the price used per barrel is how significant this deal is for chaco and also gives us some idea of the level a potential bidder may have to stump up at some point down the line should Chaco become a takeover target.

A perfectly satisfactory outcome I feel for holders would be for Chaco to do some testing on the fields, certify the reserve levels and then armed with that data approach some larger companies for a buy out deal. The timescale for that would be very short indeed.

Someone paying 7.25p for 136k units

MM's short of stock?

We are starting to see some movement, about bloody time, nice calulations MPH and Alfred,

Bit more activity on level 2 :- 2 v 2 Bid 6.75 Offer 7.1

SS

I have a feeling that we will be disappointed, after past experience, if we are expecting 55% . I think 25% is more likely.

Still, 25% of a lot of oil is still a result.

Remember management expected nothing.

The sp is still below what it was prior to Alea.

Alfred

I am very concerned that we might be building ourselves up to expect too much

too soon and am trying to be more realistic with my own expectations so that we

are not disappointed.

I am in absolutely no doubt that our patience will be well rewarded.

Alfred

Alfred
I agree we have to be sensible but do you have a target SP in mind given 25% is more likely?

I have a 12 month horizon - during which I am looking to see 30p+

It has been stated on another bb that primavera has not been released yet by the existing owner-Is this possible!

Alfred, interesting to see you of all people taking such a moderate approach. in the past you have sometimes been (imho) ott bullish. I too believe the BBs seem to be starting another round of rumour and inuendo based hype - all of which have led to disappointment in the past.

The future of this share should be extremely positive in the medium to long term based on merits alone. The company have been good at informing all at the appropriate time - I expect this to be true in future and therefore remain quietly confident. I'm happy to wait for justified rewards.

WDIK, PDYOR.

camlad

From the FT website:

Oil in Paraguay

Conventional wisdom holds that Paraguay has no hydrocarbons reserves to speak of. Tell that to Chaco Resources and CDS, two small companies listed on Londons AIM. Chacos engineers believe drilling in 1997 when the last of 48 wells were sunk missed the areas most likely to contain reservoirs, says Martin Gro of Chaco, which has offices in London, Perth and Asunci. Two sites are being re-visited, both in basins that have yielded hydrocarbons in neighbouring Brazil, Argentina and Bolivia. Chacos geologists are busy reprocessing historic seismic data with modern computer programmes and equipment.

Chaco has better prospects in Colombia, where it has teamed up with a string of joint venture partners on three projects. In the most advanced in Putumayo - fields being worked with Repsol YPF could contain as much as 37m barrels of oil. Extraction industries are famously high risk. But amid energy and commodity prices, improved technology and falling exploration costs are opening new opportunities in the sector, giving investors a wider range of opportunities to choose from.

Additional reporting by Adam Thomson in Mexico City

thanks schiff
FT article

The article suggests that Chaco has the third application-any other views?