Chaco Reports Llanos Basin Duster

Chaco Resources Plc said that drilling of the Sayona-1 well in the Primavera block in the Llanos Basin of Colombia has been completed. The well, which was operated by Gran Tierra Energy, was drilled to 3,460ft into the basal sands. It did not encounter commercial quantities of hydrocarbons and will be plugged and abandoned. Chaco Resources had a 55% interest in the well.

The drilling rig will be demobilized once abandonment operations are completed. The two drilled structures appeared to have valid structural closure and the lack of commercial hydrocarbons could therefore be due to an insufficient source charge or hydrodynamic flushing of the reservoirs by formation water. Further study is required before any firm conclusions can be reached.

The current exploration phase terminates in May 2007. The Company is integrating the well data into the geological model in order to evaluate the future exploration potential of the block.