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.

This will be all right long term, and the long bit may not be too far away imo.

KBC Peel Hunt on Oils

Decent post, SWW, thanks.

sp now looks interesting and worth a play. Company looks as though profits now on the up and sp going other way! Mmmmmm any price under 50p a share and I'll be in also as of tomorrow.

Hardman Resources Ld - Mauritania Drilling Report
RNS Number:1413J
Hardman Resources Limited
19 September 2006


STOCK EXCHANGE / MEDIA RELEASE
RELEASE DATE: 19 September 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: MAURITANIA DRILLING UPDATE


PAGES: 1


Hardman Resources Limited ('Hardman') provides the following update on its
exploration drilling operations:

Mauritania: Exploration Drilling Update - Flamant-1 (Block 8)

Since the company's last report on 12 September 2006, the Atwood Hunter has
drilled the Flamant-1 exploration well to a depth of 3,299 meters. Current
operations are preparing for wireline logging.

Flamant-1 is located in 1,414m of water approximately 210km from the shore and
195 km North-West from the Pelican-1 gas discovery in Block 7.

On completion of Flamant-1, the Atwood Hunter will drill the Aigrette-1 well in
Block 7.


Equities in Block 8 are:
Block 8
Dana Petroleum (Operator) 41.5%
Hardman Resources Ltd 18.0%
Roc Oil Company 2.0%
Wintershall 25%
Gaz de France 13.5%

Times and dates for Mauritania wells refer to GMT (Mauritania time), 8 hours
behind Western Standard Time, Perth.

All reported depths (except water depth) are referenced to the rig rotary table
(RT). Hydrocarbon shows will be only be reported after all required logs have
been run and evaluated.



SIMON POTTER
CEO & Managing Director

2 to 3 days then.

Fine by me!

BTW, seen SOLA? Taking off nicely, it would appear.

A nice tick-up this afternoon, on turnover of more than 1.1 million shares.

HNR Bid: 50.5p Offer: 52p Change: 2.75

Makes a nice change :o)

Announcements
A$1.47 Billion Recommended Offer for Hardman Resources from Tullow (25 Sep 2006)

Hardman today announced that it has entered into an agreement with Tullow Oil Plc for the proposed acquisition by Tullow for all of the shares in Hardman.

Sold out of Hardman a few weeks back as although I consider them a good company with great prospects the SP has been frustrating. As a holder in Tullow I am well pleased and the price being paid appears cheap considering where it was a couple of months back and where it could have gone to. The Tullow Management have obviously been reading your post's ST.

It is cheap and there are a loyt of losers out of this for Hardman, but I have to say I am not one of them and am happy to take the shares.

Well done soul.

Not a jibe cynic, you asked a good question.

Now you have the answer.

cynic - 10 Sep 2006 10:15 - 67 of 82
why should any predator want to buy Hardman?
seawallwalker - 10 Sep 2006 14:37 - 68 of 82
LOL

You cynic, you!

Such a laugh.

it will be interesting to see what value that will put on our shares. I paid 58.44p for my shares. I hold 10,000 shares. This is very good news. The share price should rise nicely. Andy do you know what this offer values our shares at? Good luck to all holders.

Janet I think I read 79p

no offense ever taken Seagoon ...... indeed Hardman has been taken out, and jolly good luck to all holders, whether in at the cheap or the expensive end ..... Nevertheless, i will repeat what i wrote somewhere some time back ..... just because the big oilies are stuffed full of cash, does not mean that all and every minnow with just a sniff of assets becomes a target .... yes, a (very) few will be gobbled up, but picking the right one is akin to spotting the winner at the Grand National, or even choosing Foinavon to pull it off.

cynic, just to tidy upom here, yes I agree with you entirely.

I have sold my 10,000 at 76.95 pence. I decided to take my profit. I am happy with this. take care all.

Can anyone advise wether it would be better to take the cash offer or the Tullow shares?

"Hardman Resources - Agreed bid from Tullow HOLD

Tullow has secured the recommendation from the board of Hardman for a cash bid at A$2.02 (79.79p) per share.... a reasonable premium for the Ugandan discoveries and ...full value for the Mauritania assets (...in ...light of the downgrades on Chinguetti). ...possibility of a higher ... bid cannot be ruled out. However, ...Tullow knows more about the Uganda assets than anyone else ...and ...the Hardman board is now bound not to talk to potential competing bidders...Hardman having raised 60m at 98p per share back in April this year, this capitulation really does not cover the board with glory.

This is an excellent opportunity for Tullow to broaden its production interests and development portfolio and to deepen its position in the more promising parts of the Ugandan exploration play on which early success points to potential resources of several hundred million barrels...

we remind readers that our Core NAV estimate for Hardman is 60p and risked exploration value is 34p. Assuming the shares move straight to the bid price, we believe there is little to be gained from gambling on a higher bid but it is certainly worth holding on to see what may happen.

Tony.Alves@kbcpeelhunt.com

For what it's worth, I say good bye to Hardman Resources who have been very good to me over the last 3 years having bought and sold in peaks and troughs.

This last period has been sticky as it went the wrong way for a while but I have been sorted out by Tullow's bid and I walk away with 17 per share.

Pointless waiting in my case, I'll have the money and look to buy in cheaper at Tullow, maybe maybe not.

Good luck all.

Well, that was a nice surprise as I logged in just now - the Tullow offer price puts me on a profit of about 27% which ain't bad for a couple of month's patience!

I'm still making up my mind whether to take cash (so I can have either another chunk of SOLA or a pop at Ariana Res) or opt to receive the TLW shares.