Chaco Resources CHP (Moderated thread)

Primavera

During the period the seismic data was re-processed and re-interpreted and
structural maps were prepared by the Operator. Four structural leads were
mapped and were named the Cachapa, Sayona, Tonino and Capibara leads and their
locations are shown on the Chaco website presentation.



The two largest and most interesting leads are Cachapa and Capibara and 20km of
new seismic shooting was programmed with the objective of maturing these two
leads into viable drilling prospects. This seismic survey comprises 10km on
each of the named leads and was commenced in late October. This new seismic was
interpreted in November and two drilling targets selected for drilling with an
estimated spud date of the first well in the first quarter of 2007. The
Operator is now close to signing a rig contract for a rig to undertake this
work.



The results of these wells will determine whether the joint venture elects to
enter Year 2 of the Primavera Contract in May 2007 which carries an obligation
to drill one further exploration well in the Primavera E&P Contract block.