The approval states that Bohemia's application meets current legal and economic requirements and that the Government Executive has adjudged them to be in order.
The Evaluation permit granted gives the company the right to initiate the evaluation of the area for a period of one year. This work will comprise the gathering, and reprocessing of the historical data related to the block and the environmental licensing required for field work, after which the Company will enter the exploration period that covers the following four years.
Further to the application the process for the concession of the Exploration and Production contract ("E&P") has been approved. According to the Paraguayan Hydrocarbons law, the E&P contract shall be submitted for ratification to the Paraguayan Congress once executed by the Government Executive and Bohemia S.A.
Once the E&P contract is executed, the Company will allocate approximately 0.9 million ordinary shares to the vendors of Bohemia, in accordance with the Share Sale Agreement dated 27 September 2004. A further 8.2 million shares will be allocated once the Congressional ratification takes place. It is hoped that the entire process with respect to this block will be completed before the end of the second quarter of 2007.
A map of the block can be found on page 16 of the Company's Annual Report & Accounts for the year ended 31 March 2006 and in the Company's presentation given at the Annual General Meeting held on 10 October 2006. Both the Annual Report and presentation, together with further details of the Company and its projects, are available on the Company's website, www.chacoplc.com.
Technical Director, Graeme Stephens, said today: "It is exciting finally to acquire this block in an atmosphere of increasing industry interest in hydrocarbon exploration in Paraguay. The block sits adjacent to the gas productive Brazilian side of the Parana asin and contains the same stratigraphy. We look forward to evaluating this very large area which, at 4.5 million acres, covers an area equivalent to over 200 average North Sea Blocks."
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