Chaco Resources Says Seismic Work Completed at Primavera Block

Chaco Resources

Chaco Resources says the seismic work and interpretation reprocessing on its Primavera Block and the investigation of more cost effective rig options at Platanillo have been completed. Both blocks are located in Colombia.

Primavera Block (Chaco Equity 55%)

The interpretation has indicated four conventional Carbonera fault trap leads in the northern half of the block which need further seismic control to advance them into drilling prospects. Chaco has therefore approved the shooting of two new seismic lines over the Cachapa and Capibara leads and this shooting is scheduled to commence imminently. This will be followed by processing and interpretation of the date due to be completed by December. At that time the form and size of the structures can be confirmed and drilling locations selected. The Operator, Gran Tierra, is in the final stages of selecting a suitable rig for a spud anticipated in January, 2007.

Platanillo Block (Chaco Equity 25%)

Chaco Resources says that Ecopetrol, the operator of the Platanillo Block in Colombia, has advised that it is actively investigating other rig options to the very expensive helicopter- supported operation that would be necessary to commence the re-entry and drilling program before January 2007 (the end of Year 1). In addition ECP is holding high level talks with the ANH, the government body which administers E&P (Exploration and Production) contracts, to guarantee that the timing implications of using the much cheaper land rig option are approved by them. The results of these negotiations should be known shortly and Chaco will advise the market as soon as any update is received from the Operator.