AMER.L Regulatory News (AMER)

27 Oct 2005 07:00

Chaco Resources PLC27 October 2005 CHACO RESOURCES PLC ("Chaco" or "the Company") Placing to raise up to approximately £5 million The Company is pleased to announce that it has conditionally raised £5,080,840(before expenses) through a placing ("the Placing") of 84,680,667 new ordinaryshares of 0.1p each in the capital of the Company ("the Placing Shares") at aplacing price of 6p per share. The Placing proceeds will be used to fund itscommitments under its joint venture with Repsol Exploracion Colombia S.A.("Repsol") in Colombia. The Board of Chaco Resources plc announced on 3 October 2005 that it had enteredinto a farm-in agreement with Repsol to earn a 25% interest in the Alea Field inColombia's Putumayo Basin (the "Alea Field") by funding certain appraisaloperations. The Company's financial commitment required to earn the 25% interest is cappedat US$7.4 million for the first phase of appraisal of the Alea Field. Chaco hasagreed to fund the cost of re-working existing seismic coverage, re-entering andtesting an existing discovery well, which flowed oil at 533 bbls/day in 1988,and drilling a new step-out well to determine the possible lateral extent of thefield (the "Project"). The funds raised by the Placing will enable Chaco to meet its obligations forthe Project. Any funds raised pursuant to the Placing but surplus to thoserequired for the Project will be used for general working capital relating tothe Company's ongoing activities in Colombia and Paraguay. It is anticipated that application will be made for the Placing Shares to beadmitted to AIM on 1 November 2005. Chairman, Jon Pither, commented "This successful fund raising in what was aweakening oil sector market has highlighted the intrinsic value of the Aleadevelopment project. We also believe that investors in the placing recognise theopportunities the Company has to identify additional low risk development andexploration projects in Colombia through its excellent local contacts in thecountry." Further details of the Project and the Company's other projects are contained inearlier announcements released by or on behalf of the Company which can also beviewed on the Company's website*. Enquiries:- Martin Groak, Finance DirectorChaco Resources plc Tel No. 07949 209 301 Marc YoungDaniel Stewart & Company plc Tel No. 0207 776 6550 Simon RobinsonPark Green Communications Tel No. 07887 985 671 *Website: www.chacoplc.com This information is provided by RNS The company news service from the London Stock Exchange