Nathaniel Chalobah's loan spell at Watford was set to expire tomorrow, but the two clubs have reached an agreement that will see him remain at Watford until the end of the 2012/13 season. The Chelsea website had the announcement, ending any chance that he'd be recalled to Chelsea to help cover for the injured Oriol Romeu.
In the short term, this will likely mean continued regular minutes as Watford push for promotion. He's firmly established himself as Watford's best midfielder by this point, so it would seem that without an injury he'll likely see plenty of time on the pitch.
With the loan now covering the remainder of the season, it would seem unlikely that Chelsea would continue to insist on Chalobah sitting out cup ties. We'll have to wait until the weekend to know for sure, but seeing him involved in their FA Cup run wouldn't surprise me at all (assuming of course that Gianfranco Zola plays anything close to a full strength squad).
What happens with Chalobah next season is still very much up in the air, as it would not surprise me at all to see him fighting for first team minutes this summer. That's a long way off though, so for now we should just sit back and watch him continue to improve. Forza Watford!