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.

Mildly encouraging news out today: oil shows at Mputa plus work begins at Flamant.

Hardman Resources Limited
15 August 2006

STOCK EXCHANGE / MEDIA RELEASE

RELEASE DATE: 15 August 2006

AUSTRALIAN CONTACT: Peter Thomas
Hardman Resources Ltd
+61 8 9261 7600

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

RE: SUCCESSFUL UGANDA FLOW TEST AND MAURITANIA
DRILLING UPDATE

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

Uganda: Mputa-1 flow test update - Block 2

On 12 August 2006, oil was successfully flowed to surface from the sands tested
from DST #2 in the Mputa-1 exploration well, yielding an average flow rate of
300 barrels of oil per day of 32degrees API oil through a 32/64' choke, with no
water production and low gas to oil ratio.

The sand tested by DST#2 is a relatively thin interval (2 - 3 metres), which
gave an indication of hydrocarbons whilst drilling but did not yield definitive
wireline pressure testing results during the original drilling operation. The
gravity of the recovered oil is very similar to that seen in the lower zones at
the Waraga-1 well 19 kilometres away which is likely to be of similar origin.

Final flow and build-up tests are currently being concluded after which the main
oil-saturated sand in the discovery well (965 to 975m interval) will be tested
by DST#3. Testing of this final interval is anticipated to commence later this
week.

The Mputa-1 well is located 220 kilometres northwest of the Ugandan capital
Kampala and onshore 8 kilometres from Lake Albert. The Waraga-1 well is located
19 kilometres to the northeast.


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

Times and dates for Ugandan wells refer to Uganda time (GMT+3 hours), five hours
behind Western Standard Time (Perth).


Mauritania: exploration drilling update - Block 8

The Atwood Hunter drilling rig spudded the Flamant-1 well offshore Mauritania in
Block 8, at 1:15am on 11 August 2006. Over the last 48 hours a pilot hole has
been drilled to a total depth of 1,905 metres to check for shallow gas and
preparations are now underway to drill the main well bore.

Flamant-1 is targeting a large Cretaceous Carbonate platform/reef prospect in an
area of different geology to the rest of the offshore Mauritanian basin, which
holds significant potential, primarily for gas, and is recognised as the best
test of a large regional high with both primary and deeper secondary objectives.
Water depth at this location is approximately 1,400 metres.

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.

The oil flow at Mputa-1 doesn't sound like much, at 300 bopd (150 net to HNR). The good news is, however, that being onshore, there is the potential to put down a herd of nodding donkeys and significantly increase production. It would appear that the oil is also of good quality and so this looks like a good development, IMO.

It's also worth noting that the level just tested was a very thin interval and that DST#3, to be tested over the coming week, is likely to produce oil in greater quantites as the interval is three times the thickness.

I'm interested by the apparent speed of progress at Flamant - hopefully this will also prove rewarding!

Hello soul traders.

Any result is good upwards.

In respect of Flamant, they have drilled a pilot hole with a sniffer on as they dont want any nasty surprises, I hope.

If there is gas and it's under pressure, it is wise to be cautious.

I thought about having more, but I will wait till Woodside report overnight and see that they have to say about thier prospects and plans in Mautiania.

Meantime I understand that Simon Poter is in Uganda, dont know why.

It's not for nothing though, good or bad.

Hi ST,

Saw your post on the DNX thread.

Are you concerned about the Mauritania Energy Ministry messing with the Production Sharing Contracts ( PSC ) ?

It seems like ( although I haven't looked into HNR much ) HNR would face greater exposure then DNX.

Cheers

whatuwwant - Mauritania wont mess around with them, they have just settled a dispute over the terms and Woodside JVP have paid $100m as compensation.

No more trouble from that direction.

Thanks sww !!

Thanks Seawall - without digging through a load of RNS I wouldn't have been able to answer that question!

The good thing is that kind of issue has bren through the mill and is unlikely to reoccur.

I generally know what where and when for Hardman.

Uganda still looks good.

Most feel the oil is deposited in traps caused by the fault lines, and the thought is that these will be frequent throughout the Albertine Graben, however there way well be a large deposit under Lake Albert..................


Nzizi followed by Ngamwa are the next Hardman drills to happen dont know when, it's all slow going there at the moment. These are expected to apparise further the on shore area, but Ngassa will be the first off shore drill, that is being reviewed now as to when and how that will happen.

Peel Hunt:-

"Hardman Resources (HNR) Uganda flow rate FCAST: No Change REC: BUY
After a failed speculative test in basement, there was a successful test on the lower (and poorer) sands in the Mputa-1 well. The preliminary flow rate of 300 b/d could improve with further clean up and we would look forward to further better flow rates in the upper sands. The Hardman share price has been hit hard with disappointment over the Colin dry hole in Mauritania but the further downdraft on the failed basement test was unwarranted. At 58p, the share price is discounting a very poor outlook for the reserves in the producing Chinguetti field and gives no value at all to Uganda. We reiterate our Buy recommendation."
Research Analyst - Tony Alves

Thanks to entrust over on TMF for finding this.

Nice to find my sentiments confirmed by the pro's - good post Seawall, thanks! Good summary in post #16 too!

Don't let me stop right now....click here

Uganda
------
Heritage commenced mobilization of the drilling rig to the Kingfisher-1 wellsite in Block 3A and expects to spud the first well of a two-well initial program shortly. The Kingfisher prospect, which is a large structural high,extends out into Lake Albert and can be conveniently drilled vertically fromthe lakeshore. Exploration prospects have improved substantially following thecompletion of the Waraga-1 well test in Block 2 (which lies immediately north of Heritage's permit) during July 2006 by Hardman Resources (operator). The well test produced an aggregate maximum flow rate of 12,050 barrels per day (bpd) from three zones.

This is the one to watch imo.

Good oil here and Uganda is away.

Here is what Heritage are targeting, (taken fromtheir June 2006 presentation),

Heritage to drill Kingfisher oil prospect in Summer
2006. Potential STOOIP > 1 billion barrels

Number of other high impact targets in the lake
mapped from seismic

Heritage Presentation

i ask whether or not Tullow (TLW), who hold the other 50% interest in Mputa, is a better bet that HNR

cynic always nice to see you visiting.

TLW vs. HNR:- what answer did you come up with?

Mine is probably, Tullow because it is more established than Hardman, the latter currently dependant on revenues from Chinguetti, (with all it's faults).

Hardman are invbolved in drilling currnetly in Mauritania, which keeps throwing dusters, comparable to the sucess rate of Tullow of late, so no difference there.

Hardman could be hit again if Chinguetti is downgraded for reserves, there will be more on that later today once I have seen Woodsides Interims.

Meantime here is another item to read.

FINANCE
Hardman buoyed by Ugandan oil flows
JOHN PHACEAS
393 words
16 August 2006
The West Australian
STATE
59
English
(c) 2006, West Australian Newspapers Limited
"Hardman Resources expects to come up with an initial reserve estimate for its promising Ugandan oil discoveries before the end of the month, after yesterday confirming healthy oil flows from the Mputa field.

Hardman, which reported a combined flow-rate of 12,000 barrels a day from its nearby Waraga-1 well near Lake Albert in June, yesterday reported the Mputa-1 well had flowed at an average of 300 barrels a day during testing of a thin 2-3m interval first discovered earlier this year.

Importantly, testing of the main oil-saturated sands, measuring more than 10m, will be tested later this week. The results should be known by next Tuesday.

The promising results briefly helped Hardman shares shake off pessimism associated with production problems at the Woodside-operated Chinguetti joint venture in Mauritania, pushing the stock as much as 3 per cent higher before it closed 0.5 up at $1.405.

However, the stock is down more than $1 since it touched $2.50 in April on the back of its discoveries in Uganda, where it is a 50-50 partner with the UK's Tullow Oil.

Managing director Simon Potter was in Uganda and could not be reached for comment yesterday, but finance chief Peter Thomas said the Mputa-1 results were a further indication the Ugandan venture would yield a commercial development.

"It proves that oil will flow to surface and encourages us that we will get to a commercial development," Mr Thomas said.

He said little could be read into the comparative flow-rates at Mputa and Waraga because of different reservoir characteristics. However, there was more "volumetric upside" at Mputa than Waraga, he said.

"Conceptual development studies" had already begun with a view to achieving early production, with several different scenarios under evaluation, initially focused on supplying Uganda's domestic market, he said.

Mr Thomas said Hardman also expected to complete initial oil-in-place and likely recoverable reserve estimates by the time it handed down its first half results on August 29.

By then it should also know the results of the vaunted Flamant gas well in Mauritania. The Flamant well was spudded yesterday and is viewed as a potential five trillion cubic feet (of gas) field capable of becoming an LNG supplier to Europe."

From The Sydney Morning Herald

Rememeber this is a newspaper story!


"It seems that Macquarie Equities analysts aren't quite as bullish on the oil prospects in Mauritania as joint venture partners Woodside Petroleum, Hardman Resources and Roc Oil have let on so far.

Early production difficulties at the Chinguetti development have dampened the investment bank's reserve expectations for the Tiof and Tevet projects.

"With no official guidance from the operator [Woodside], we have grown increasingly uncomfortable with our reserve estimates," said analyst Andrew Blakely, possibly in the hope that Woodside chief executive Don Voelte would elaborate when his company's half-year results are released today.

Macquarie yesterday slashed its recoverable reserve estimate at the Tiof project in half, from 220 million barrels to 100 million barrels. And the potential for the Tevet tie-back was cut by two-thirds from 75 million barrels to 25 million barrels".

Briefly from Woodside, "Tevet has always been flagged as a tieback to BH, so no surprise there. Tiof FEED now looking at around End of Q1 2007, with FID June 07?, so first oil around mid to end of 2009 then.

In all, I think everyone got nervous with Woodies report after we got ambushed the last time round with their Qtrly. Ching back up to just over 35kbopd after they fixed the compressor issues (2 out of 3 anyway) in June. AFAIUI, Hardman just had another offload last week. So another paycheck on its way to our coffers.

618 synopsis

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