Puerto Lopez Update

18 Jan 2007 12:22

Chaco Resources PLC18 January 2007 18 January 2007 CHACO RESOURCES PLC ("Chaco" or "The Company") PUERTO LOPEZ OESTE - UPDATE Chaco Resources Plc (AIM : CHP), the oil and gas explorer and developer focusedin South America, announces that the Operators, Expet S.A. and ConsultoriaColombiana S.A., have advised that the new seismic data does not indicate thepresence of structures large enough to be considered commercially viable.Consequently, the Company has decided to withdraw from the next stage ofexploration. The Company expects to be able to acquire an alternative investmentopportunity. Technical Director, Graeme Stephens, said today "The new detailed seismic thatwe ran over the two leads in the block did not support the earlier mapping andindicated that while potential targets were present, they were far too small tobe of commercial interest. This is the smallest of our interests and ourwrite-off on this area is not expected to exceed £0.9m. One advantage of reaching this decision at this time is that it enables us todevote funding which was earmarked for drilling in this block for targets ofhigher potential. We are currently in the final stages of negotiating such anopportunity and expect this to be finalised and announced in a few weeks' time." Competent person: Technical information in this announcement has been reviewedby Graeme Stephens, the Company's Technical Director. Mr Stephens is a qualifiedgeologist and has been a member of the American Association of PetroleumGeologists since 1970. For further information contact: Nicola Brookes, Finance Director Chaco Resources plc Tel: 01494 431195 Lindsay Mair Simon Robinson / Clare Irvine Daniel Stewart & Company plc Parkgreen Communications Tel No: 0207 776 6550 Tel: 0207 851 7480 Notes to Editors: Background Chaco Resources Plc is an oil and gas exploration and production company whosestrategy is to pursue hydrocarbon exploration and development opportunities inSouth America. Chaco currently operates in Paraguay and Colombia. The Puerto Lopez block was Chaco's second venture in Colombia where afundamental change in the fiscal laws and an overhaul of the state's managementof hydrocarbon exploration and production permits has created a very favourableinvestment environment. Chaco teamed up with strategic joint-venture partners(Expet S.A.) who have many years of experience operating in Colombia and throughwhom it has been seeking to participate in exploration and production (E&P)concessions Two interesting leads were identified as a result of the reprocessing andinterpretation of existing seismic in the Puerto Lopez Oeste Block, which wascompleted in September. To mature these leads into prospects required furtherseismic acquisition and therefore a 100km new seismic programme was contracted.This was to enable the Company to identify the location of the planned well. Itis on the basis of this new seismic data that the Company has decided towithdraw. More detailed information on Chaco's activities in both Colombia and Paraguaycan be found on the company's website: www.chacoplc.com Chaco Resources plc has offices in the UK, Western Australia, Paraguay andColombia. This information is provided by RNS The company news service from the London Stock Exchange