After researching this company this week and giving it some thought I have decided to start a new thread with a header that perhaps more accurately reflects where this company is at present.

Hardman has interests in production at its Chinguetti field, offshore Mauritania, where it is currently producing a net 7,000 barrels of oil per day (bopd). This is set to increase as more wells are drilled towards in Q4 2006 and into 2007.

The exploration portfolio is also very strong, with numerous fields being tested over the next eighteen months (see below for more details).

The share price has taken a bit of a battering in the last few months, in common with many E&P stocks, but could in my view be ripe for a turnaround (further explanation follows).







I have done my best to evaluate HNR's prospects.

I was helped by info from the Report to Shareholders for the Quarter Ended 30 June 2006 - see Hardman's website www.hdr.au.com for details

Current Chinguetti production of 37,000 bopd (7,030 net to HNR) and 6,000 from recently-tested Waraga could together justify a market cap of 407 mil using an oil price of $64 as in the last quarter, profit ratio 17% of turnover, P/E 15.

HNR also had 57 mil of net cash at quarter end after debt is taken into account.

Add the cash figure to production-related capitalisation and you have a co with a justifiable market cap of 464 mil, or 63.8p a share. Current SP is 59 / 61.5.

Basically the SP dropped earlier in the year due to the uncertainty over Chinguetti's production figures, caused by unexpectedly low well pressures. The field was supposed to produce 75,000 bopd and is now only producing half of that. Remedial drilling is due to be carried out to create another three wells which should generate another 30,000 bopd total (5,700 net to HNR).

It would seem that the Ching problems have been pretty much priced in now and that the market is looking to further good news from continued drilling.

On my modelling of the situation you basically get all of HNR's other prospects for free. Juicy ones include the potential for a number of 1-billion-barrel-plus discoveries offshore Guyane, which I have been following through my interest in Northern Petroleum (NOP). However, it may be a while before a number of these are drill-ready, plus of course they do have to find commercial hydrocarbons.

To my mind the portfolio seems broad enough to offer a real chance of some big successes.

The SP may jump if Mputa-1 is successful. There is also the possibility of a net 900 bcf of gas at Flamant-1, which spuds shortly.

With lots more drilling promised into 2007, the programme looks to be capable of producing a lot of good news.

Having been bearish on this stock before, I'm now beginning to like the look of what I'm seeing. The current SP is a test of the 59p level hit in mid-June and also December 2005.


DRILLING TIMETABLE.

I have attempted to put together a drilling calendar. It's probably a bit rough and ready, but here goes:

NB No liability will be accepted for the content or accuracy of this list as drilling schedules, etc, may be subject to all kinds of changes. Please refer to Hardman's website and/or news releases for confirmation.

Current (Aug 2006) Drilling Mputa-1, Uganda. Possible net potential 6,000 bopd similar to Waraga-1? Operator: HNR

Current (Aug-Sep 2006) Drilling Flamant-1, Mauritania. Net 900 bcf gas. Operator: Dana

Q4 2006 Chinguetti EDIT: Drilling 1 additional well, Mauritania. Net 1,900 bopd Oil. Op: Woodside

Q4 2006/Q1 2007 Drilling Aigrette-1, Mauritania. Net 16.2% primarily gas. Operator: Dana

H2 2006 Tevet, Labeidna and Banda (estimated net 500 bcf Gas) discoveries, Mauritania, to be evaluated as tie-backs to the Chinguetti facilities. Tevet fast-tracked for development decisions by end 2006. HNR net interest 21.6% or 24.3%, Op: Woodside

Q4 2006/more likely Q1 2007 onwards, Suriname onshore 25-well programme, HNR net interest 40% in a prolific S. American oil province (adjacent fields total 1 bn bbl oil in place, producing 13,000 bopd). Op: Staatsolie

?Q1/Q2 2007 Drilling Kibaro-1, Mauritania. Net 31.5 mmbl oil. Op: Woodside

Q2 2007 onwards. Chinguetti, Mauritania. Up to 4 additional producing wells, plus two injectors to be drilled. Net 7,600 bopd Oil, possibly. Op: Woodside

Proposed 2007, Guyane, drilling various prospects 1 bn bbl oil or more (6 targets according to NOP), HNR net interest currently 97.5% but likely to be reduced on formation of JV. Op: HNR

H1 2007. Tiof, Mauritania. Net interest 21.6% Op: Woodside. Decision due on investment in Tiof. First oil possibly due in Q3 2009, possible initial 10,000 bopd net to HNR.

Late 2007 - Tanzania: Maturation of seismic prospects to drillable status. Net interest 50% Op: HNR

2008 at the earliest: Falklands, drilling. Net 22.5% Op: FOGL


Comments on errors or admissions are welcome. This summary does not include a range of seismic prospects and other potential leads for which dates have not been finalised, many of them in Mauritania.

The potential for the Falklands prospect is huge and I acknowledge Xmortal for having drawn attention to this on his thread of July 2004, however I feel that there is a lot more strength in the portfolio as listed above which will provide both cashflow and a significant lift in the SP long before the Falklands prospects become a reality.

Counting on my fingers (!), there are between now and the end of 2007,something like 13 drilling and/or production instances.

Considering that many of these prospects could add 10p per share in NAV, even if only a few are succesful (and we know that many are dead certs, e.g. Ching and some of the other Mauritanian prospects), one could easily see 1 a share on the basis of a couple of good new discoveries. Something like Flamant-1 could add 20p per share NAV by itself if estimates of recoverable gas are proved correct.

Note: EDIT: We are awaiting a review of reserves for Chinguetti due to the production issues metnioned above. This could halve the previous estimates and accounts for much of theSP wekaness at present.

All in all, I consider that Hardman is getting to the stage where it could be due a turnaround in its SP performance, and where forthcoming exploration and production lend the company an air of credibility as a potential multi-bagger with interests in billions of barrels of oil. EDIT: this may take slightly longer than previously anticipated as the run of disappointing news at Chinguetti is stretching the timetable.

As always, please DYOR, all IMO.

Woodside half yearly briefing.

Because you can read it as well as I can.

Good stuff, SWW. Looks as if the potential resources at Mputa could be quite large - again good news, particularly if they can up the eventual production by using pump-jacks.

This is interesting stuff .

It shows that Heritage have subdivided up theri southern licenses and are attemping a farm in. it should be bourne in min=d that their southern exploration wells hit oil which was CO2 saturated and therefore uncommercial to produce. CO2 is not present north of that well.



Here is some more with an eventual timescale from John Morely.

http://naturalresources.andnetwork.com/index?service=direct/1/Home/top.fullStory&sp=l49426

More oil deposits found in western Uganda

August 16, 2006, 6 hours, 30 minutes and 49 seconds ago.

By ANDnetwork .com

Hardman Resources, the company prospecting for oil in Western Uganda, has struck more oil deposits at their second well, Mputa-1, further elevating Uganda's hopes of joining the oil producers club.

By Muhereza Kyamutetera & Elias Biryabarema
Mputa-1 lies 8 kilometres from Lake Albert and 19 kilometres southeast of Waraga-1 well, the first well in western Uganda to be tested for commercial petroleum production.

That well, after flow testing all of its three sedimentary zones, was found to possess a daily crude oil output capacity of 12 000 barrels.

In a press statement on Tuesday, Hardman said tests conducted on 12 August on the lowermost zone of Mputa-1 well located in Block 2 of the Albertine Graben yielded 300 barrels of oil per day. Block 2 is jointly owned by Hardman and Ireland-based Tullow Oil with 50% shareholding each.

Immediately the news of new oil discovery hit the Australian Stock Exchange (ASE) where the company is listed, its shares rose markedly, trading 1.4% higher than the previous prices.

The release explained further that the oil whose viscosity (liquid thickness) is a good 32 API is not contaminated with water and has a "low gas to oil ratio".

Oil discovered at Mputa-1, Harman said, is much similar to that found at Waraga-1 well, 19 kilometres away indicating that the two hydrocarbon reservoirs may have a similar origin.

In total, Uganda can now at least produce over 15 000 bopd, a great figure, according to local petroleum experts, considering that some of the African petrol giants like Nigeria, Angola and others started with smaller fractions of the capacity already confirmed in Uganda.

According to the government geologists, the size of the oil deposits that have discovered are a good sign Uganda might produce in millions of bopd when commercial exploitation eventually begins.

However, Hardman country manager John Morley downplayed the possibility that the Waraga reservoir spreads this far.

"We are talking about a distance in between of 20 kilometres and it is extremely unlikely that the reservoir comes this far but once again, this is why we are doing the tests," he said on phone.

He added that it is still a long way before Uganda can make any confirmation of commercially exploitable oil.

"We are just 2% through the process and it will take us at least another 18 months to know exactly what it is we are up against," he said.

After this initial test, Mputa-1 well has now been shut-in for pressure build up and final tests on its bottom most zone will proceed over the weekend.

Hardman's continuing strike of more oil will sustain the nation's soaring euphoria that erupted several months earlier after the first announcement by the company that it had found commercial quantities of oil in western Uganda.

It also anchors the hope that Canada's Heritage oil & gas, which is due to start drilling the Kingfisher prospect on the shores of lake Albert, might also discover oil there since it appears to be the same oil field.

That's a very up-beat article on Uganda's prospects, SWW. Be nice if the zone does extend all the way from Waraga to Mputa, but I think we can dream on :o)

Interesting about the timescale too - I didn't think it would take that long to do the feasibility study, but I guess they now have to design and cost out the whole infrastructure and that will take a while, especilly given that Uganda is virgin territory. However, with the success that has taken place so far and the activity of other oilers in the neighbourhood, it augurs well for the future and for possible co-operations.

st - Ugandan Government want the oil yesterday, and they are about to do anything they can to get it, including fast track production and tax breaks.

My guess is that if Hardman and co do not fall out with them, it will be 12 months start to finish, then a refinery built which will take a good while longer.

You are correct about adjacent oilers, the proviso still being what is found at Kingfisher and in the rest of Hardmans acreage.

I also hold a wedge of TRP which are stashed away should I ever need them.

Word of warning, some dont think much of the acreage for TRP, however I have them as a small punt, also Peter Kingston is the CEO, he is of SOCO fame.

From SOCO website:-

2. Peter Kingston
Non-Executive Deputy Chairman and Senior Independent Director

A member of the Board of SOCO International since May 1997 and Chairman of the Remuneration and Audit Committees.
A petroleum engineer who has worked in the oil and gas industry since 1965 in various roles.
Formerly, a founding director of Enterprise Oil plc, going on to become Managing Director (Technical)and a director of Elf-Enterprise Petroleum Ltd.
Currently, Chairman of Tower Resources plc and a Director of Plexus Energy Limited, a social and environmental advisory network

Email form Heritage

"Attention Business Editors:

Heritage Oil spuds Kingfisher-1 exploration well in Uganda


/THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, Aug. 17 /CNW/ - Heritage Oil Corporation (TSX: HOC) today
announced that it has commenced drilling the Kingfisher-1 exploration well in
Block 3A, Uganda.
As reported last month, the Kingfisher-1 vertical well will be the first
in Block 3A's initial program. The well will target a large structural high
that is expressed at surface on the lake-bed and has been defined by two 2D
seismic surveys. Kingfisher-1 will be drilled from the lakeshore to a
vertical/total depth of up to 4,000 metres, targeting multiple pay zones. The
well should take approximately 75 days to reach its total depth. Heritage is
the operator of Block 3A with a 50% interest, while Tullow Oil owns the
remaining 50%.
Exploration prospects for drilling in the Lake Albert area have improved
substantially following the recent completion by Hardman Resources of the
Waraga-1 well test in Block 2, which lies immediately north of Heritage's
permit. Hardman Resources (operator) and its joint venture partner, Tullow
Oil, reported in July 2006 that the well test produced an aggregate maximum
flow rate of 12,050 bpd from three zones. The oil quality of 8,400 bpd was
33.8 degrees API, while the remaining 3,650 bpd was 18.6 degrees API.
Heritage's Chairman and CEO, Micael Gulbenkian, commented: "Our
preliminary work in the Lake Albert area suggests that we are exploring in a
promising area and Hardman's recent success there reinforces our own
conclusions. We look forward to successful results from Kingfisher-1."

Seems you came on board at the right time soul.......

Ministers inspect oil sites.....

"Ministers inspect oil sites
Sunday, 20th August, 2006


Fred Kayizzi and Amlan Tumusiime

THE ministers for energy and mineral development on Saturday flew to western Uganda to inspect the Mputa 1 oil well sites in Hoima district.
The trip was reportedly on the instructions of President Yoweri Museveni.

The ministers also witnessed the conclusion of the 10-day testing exercise at Mputa oil well.

The latest tests at Mputa on Saturday established a maximum flow rate of 800 barrels of oil per day jumping from a flow rate of 300 barrels a week ago..................."

Thanks to xmagx on HC.

Of course there is still the thicker area to be resolved, but it is looking very good.

I hope so, Seawall.

Tiny tick-up this morning, too. If Flamant produces the goods it could be all systems go.

HNR Bid: 59p Offer: 62p Change: 1.5

The thing with Mputa will be for the co to develop the field using multiple wells - five or six wells producing over 500 bopd each (not forgetting that HNR have a net 50% interest!) begins to make a noticeable difference to the bottom line.

seawall* .... just caught up with your comment to me of 16th .... i decided to buy into TLW as much as anything else because i have sufficient "very speccy" stocks and as you rightly pointed out, TLW is very substantial and still has plenty of upside

Hi cynic, l I try to have a balanced view across the board.

Sometimes I miss the obvious, but I am glad yuou went for and are happy with Tullow.

I have held them in the past and they were good to me.

Thanks for taking the time to read through all the posts and replying.

Uganda

Great result, and more to the point it looks like better is to come.

Well done Tullow and Hardman

http://moneyam.uk-wire.com/cgi-bin/articles/200608220700139366H.html

Uganda: Mputa-1 Flow Test Update (Block 2)

Hardman has completed a successful testing campaign at the Mputa-1 discovery
well. Since our last announcement on 15 August, the upper sand interval has now
been tested on natural flow. Results from both zones tested are summarised
below:

Test Perforated Interval Choke Flow Rate Oil Quality
(metres) (bopd) o API
Lower Sand Zone (DST 2)1,118.0 - 1,126.0 32/64' 300 32
Upper Sand Zone (DST 3)966.5 - 974.5 40/64' 820 33
TOTAL 1,120

The test results prove not only that the oil at Mputa is mobile, but also that
the reservoir sands are capable of producing dry oil under natural flow at
potentially commercial rates. The latter aspect is particularly significant,
given that the Mputa reservoirs are at shallower depth, and are hence at lower
pressure and temperature than the corresponding reservoir units at Waraga. This
positive test result therefore expands the operating envelope over which typical
Waraga and Mputa crudes (32 degrees API) can be produced and eliminates pre-test
concerns over oil viscosity and fluid properties at these shallower depths.

Although laboratory confirmation is still awaited, the gravity of all oil flowed
at Mputa is similar to that found in the lower units of the Waraga-1 well and is
likely to be of similar origin. The Mputa-1 well is located 220 kilometres
northwest of the Ugandan capital Kampala and 8 kilometres from the shore of Lake
Albert. The Waraga-1 well is located 19 kilometres to the northeast of Mputa-1.

This concludes the testing programme at Mputa-1. The well is presently being
suspended and the rig and test crew are being stood down. Initial guidance on
volumes will be included in the company's Half Yearly Report on 29 August 2006.

Hardman Resources Managing Director and CEO, Simon Potter, commented:

'The positive test results from Mputa are particularly important given that we
map more oil in place in this resource than at Waraga. Natural flow from the
reservoir at these pressures and temperatures are indicative that production
rates could potentially be commercial. Further, collectively the results to-date
indicate that oil from the source interval deep under the lake can migrate all
the way across the rift valley to the boundary fault and thus potentially over
the whole licence, considerably upgrading remaining prospectivity.

The joint venture has presented potential forward options to the Government and
is currently in discussions concerning the way forward on each of exploration,
further appraisal and potential development concepts.'

Equities in Block 2 are:
Block 2
Hardman Petroleum Africa Pty Ltd (Operator) 50.0%
Tullow Oil 50.0%

nice result! ..... happier to have TLW rather than HNR though .... it may be that HNR will provide more fireworks, though as we have seen elsewhere with small stocks, it can be up like a rocket and down like the stick.

Quite right cynic.

This has worked out well for both today.

Tell you what, have a look at my other interest in Uganda, TRP.

http://www.moneyam.com/InvestorsRoom/posts.php?tid=10226#lastread

Morning all, I'm happy with the Mputa results which seem to indicate that HNR's Uganda projects have a bright future.

Good to see that Flamant appears to be making very quick progress towards its target depth.

Nice rise too: HNR Bid: 63.5p Offer: 65.5p Change: 4

From HB's Broker Round Up today:

KBC Peel Hunt has buy ratings for Hardman Resources (HNR.L), Tullow Oil (TLW.L) and JKX Oil & Gas (JKX.L),

Good stuff!

Hardman Resources Ld - Half Year & Chinguetti Update
RNS Number:9918H
Hardman Resources Limited
23 August 2006

STOCK EXCHANGE / MEDIA RELEASE

RELEASE DATE: 23 August 2006

AUSTRALIAN CONTACT: Simon Potter
Hardman Resources Ltd
+61 8 9261 7600

LONDON CONTACT: Patrick Handley
Brunswick Group (UK media relations)
+44 207 404 5959

RE: ADVICE REGARDING HALF YEAR 2006 RESULTS AND
CHINGUETTI UPDATE

Advice regarding Half Year 2006 Results & Chinguetti Update

Hardman Resources Limited ('Hardman') wishes to advise that it will issue its
Interim Results for the Half Year ended 30 June 2006 at 7:30 am WST on 29 August
2006. A copy of an Investor Presentation relating to these results will be
placed on the Hardman website www.hdr.com.au shortly thereafter. The Interim
Results announcement will include additional details on the performance and
outlook for the Chinguetti field offshore Mauritania and provisional estimates
of oil volumes discovered to date in Uganda, following the successful test
results announced earlier this week.

To date, the Chinguetti field operator, Woodside, and Hardman have advised that
the estimated reserves of the field are under review following the significantly
lower-than-expected production. The operator has now advised that the updated
reserve estimates, reflecting the re-appraisal of its geological and reservoir
models, will be provided by the end of 2006.

As an interim measure pending more detailed data being available, Hardman will
provide in its Interim Results announcement its view on those aspects of the
field's potential which can be commented on reliably at this stage. This will
include volumes of oil in place, which as confirmed by the operator have not
materially changed, and estimated recoverable reserves from the existing Phase 1
and planned Phase 2 wells which formed the original development plan. The wells
in this original plan are not likely to recover significantly more than 50% of
the original 2P (proven and probable) reserves estimate of 123 million barrels.
It is not possible at this time to provide a reliable estimate of complete 2P
reserves as this will have to take into account additional recovery from other
future wells in a re-assessed development plan. Ultimate recovery will also
depend on the benefits from the proposed 4D seismic programme in early 2007 and
application of different technical solutions (eg well designs) from those in the
original development plan. The corresponding net entitlement reserves under the
production sharing arrangements are expected to be reduced by a lesser
proportion than changes to the gross field reserves.

Not good news for the SP - a pity as I had thought that this might have been priced in already.

Still, the prospects for the firm going forward rest on more than just the issues at Chinguetti, and once these have been clarified and the uncertainty reduced this may pave the way for more consistent SP growth. I hope!

IMO, PDYOR.