ANH Approves Boundary Change for Chaco's Puerto Lopez Oeste Block

Chaco Resources has secured a change in the eastern boundary of its Puerto Lopez Oeste block in the Llanos Basin of Colombia. The governmental hydrocarbons agency of Colombia, the ANH, has formally notified to the Company its approval of a modification to the boundary of the Puerto Lopez Oeste Block which will result in the inclusion of the majority of the large Metica South lead.

Metica South is one of two interesting potential prospects identified as a result of the reprocessing and interpretation of existing seismic in the Puerto Lopez Oeste Block, which was completed in September. The other is the Metica. Both are plays in the prospective Mirador Formation.

To mature these leads into prospects will require further seismic acquisition and therefore a 100km new seismic program has been contracted which is due to commence on October 23rd. The geology of the Metica lead is defined by the Metica 1 Well, drilled in 1985 by Elf Aquitaine immediately to the northwest of the Metica lead, which recovered crude oil in a drill stem test of the Mirador Formation. Current mapping shows the well to be situated just outside the closure of the Metica lead.

Commenting on the boundary change and the results of the seismic interpretation, Mr. Graeme Stephens, Technical Director, said: "This is a very pleasing result. The new boundary allows us to maximize the potential of this block, where we were originally targeting a much smaller play. The Metica lead in particular, with further seismic control, will, we hope, develop into an attractive drilling target and the Metica Well has already proved the existence of an active oil migration path in the area. "