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.

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.

if speculative, then probably take the money and pick up some more SOLA (don't know Ariana), for though Tullow is a top notch company, oilies are not really the place to be at the moment

Cynic, I'm inlcined to agree that I want to reduce my (considerable) exposure to oils (for reasons of not wanting to get those exposed bits badly burned :o) )

Ariana (AAU) is a teeny-weeny gold exploration outfit finding huge amounts of gold in trench samples in Turkey. They have just begun a proper drilling campaign which is due to report in late Nov. In mkt cap terms it appears undervalued compared to its peers, yet its chances of success seem to be better. I could see it doing what Patagonia Gold (PGD) did when it announced finding "bonanza grades" at Huemules a year or two ago. My gut says go for it, as I have wanted to for about a month now; am just having a quick squint at the figures.

I have done the deed; HNR out, AAU in. And a smile on my face :o)

soul -a bird in the hand is worth two in the bush.

Tullow is dropping off, which I expected, and this will continuee for a while so forget the exchange for shares and take a bite of what you fancy, when you want it, not when they say you can have it.

You may get a bigger mouth full.

The view I take is that TLW will be there for a while - and since I see the likelihood of a threebagger even in the farily near term for AAU, I know where I want to put my money right now. Cynic is right about the iffy oil situation, although a cursory glance at TLW indicates that they have decent prospects and I'll certainly give the company fuller consideration in due course.

As for mouthfuls - AAU is cream cake and I feel a trip to the bakery coming on :o)

Flamant yet another duster.

How lucky are we?

Unbelievable - I'm afraid that that news would not have gone down well with me had I still been holding! Big sense of relief . . . . :o)

Seawall, have you seen Forum Energy (FEP)? Looks like it's doing a VOG!

Yes I have seen it thanks soul.

All this and only on 3d of what the company already knew, unless I missed something

Might be worth shorting soon if only I did that sort of thing.

Hi SWW, I've seen your comments on the thread now. FWIW I seriously wouldn't short FEP at these levels. The issue here is that there has been both confirmation (of a kind) and that the company's profile has been raised. I guess most of the papers will be covering the story tomorrow, so I could envisage a lot more people piling in on this one.

I'd wait for bad news before trying to go short.

All IMO, I don't short sell anyway so am not an expert!

soul - it escapes me why this assets had no effect on Sterling when they had it?

Not that it matter too much I suppose, and I see what you mean about raising the profile.

Yes it is looking like there are more legs to it, but I also recall that VOG did a double and then the bubble burst although I did not follow why.

Dint get me wrong, I am pleased that punters have had some cash out of FEP, it so often goes the other way.

Anyway, it's one for me to follow just to see what happens even if I don't buy.

Well done, I wish I had seen it this morning,but my mind was elsewhere as usual.

http://www.advfn.com/p.php?pid=nmona&article=17071357

"Substantial Shareholding

RNS Number:8481J
Hardman Resources Limited
03 October 2006

STOCK EXCHANGE / MEDIA RELEASE

RELEASE DATE: 3 October 2006

AUSTRALIAN CONTACT: Richard O'Shannassy
Hardman Resources Ltd
+61 8 9261 7600

LONDON CONTACT: Patrick Handley
Brunswick Group
+44 207 404 5959

RE: NOTICE OF SUBSTANTIAL SHAREHOLDING


Hardman Resources Ltd was notified on 29 September 2006 that Newton Investment
Management Limited hold 39,428,236 ordinary shares in the Company, representing
5.43%.

Huntleys Broker Nore(no link, posteed by aka hooter on HC.(Thanks H)

"Event Last Update - 02/11/2006

HDRs share of 3Q06 Chinguetti production fell 26% to 458kbbls close to expectations. Sales volumes fell 34% to 563kbbls. Two oil liftings substantially reversed HDRs underlifted position. Only around 15kbbls remain outstanding. The average price achieved fell 6% to US$60.30/bbl. The ~US$10 discount to spot reflects uncertain Chinguetti production levels and new crude status. A lengthy unplanned shutdown in late August and early September impacted output. Reservoir delivery was otherwise fairly stable and facility availability high.

Barring the possibility of Tullow Oil withdrawing its A$2.02ps cash offer for HDR, the fundamentals take a back seat to the corporate maneuverings. The bid strengthened share price remains within our Hold zone. We feel the likelihood of a counter bid is somewhat reduced since our last report. The bid was already set at a substantial premium to the pre-offer price, HDRs board is on side, an A$14.7m break fee is payable and the Flamant gas prospect proved dry. If other bidders are there, they may wait for the explanatory memorandum and independent experts report due in mid November before moving. Candidates include Woodside, British Gas, Dana Petroleum and any number of other international oil and gas companies yet to gain a foothold in Mauritania. Shareholders will vote on the merger scheme of arrangement in December.


Business Impact: Our $1.95ps valuation and earnings forecasts are intact. Long term assumptions remain a US$60/bbl oil price, A$/US$ exchange rate of 0.76 and a 15% discount rate for Mauritania sovereign risk. HDRs underlying attractions remain the strong balance sheet, single digit forward earnings multiples and strong exploration potential. Negatives include development risk, potential for ongoing Chinguetti underperformance and sovereign risk.

Forecast Impact: --

Recommendation Impact: Unchanged. (Last updated: 02/11/2006

Event Analysis

Quarterly Production 2Q06 3Q06 % Chg
Gross Production (mmbls) 728 542 -25.6
Entitlements Share (mmbls) 622 458 -26.4
Sales Volume (mmbls) 856 563 -34.2

Sales Revenue (A$m) 73.9 44.2 -40.2
Realised Price (US$/bbl) 63.9 60.3 -5.6

Net Cash (A$m) 136 139 +2.2

--
HDR said measures to improve Chinguetti field underperformance are progressing. The first infill well Chinguetti-18 will drill from late 2006 to increase field deliverability. It targets a currently undrilled segment of the reservoir. A production increment of around 10,000bopd gross or 0.7mmbls annually net to HDR is expected. There appears to be little evidence of support from water injection to the reservoir. A review of the estimated recoverable reserves is ongoing and results are anticipated by year end. Expect a substantial downgrade. Tiof development concept definition studies continue. Expect some delay and potential cost inflation Project sanction remains scheduled for mid 2007.

HDR is spending $65m on exploration and appraisal this year and next.

The 16.2% Aigrette-1 exploration well is drilling in the Dana Petroleum operated Block 7. It is 43km along trend from Pelican-1 gas discovery and has 0.7tcf (115mmboe) potential. The 21.6% Kibaro-1 (130mmbls) will follow Chinguetti-18. Drilling in 2007 and 2008 is to focus on prospects within tie back distance of Chinguetti and Tiof. Patudo is a 40mmbbl prospect 6km west of Chinguetti and Batrachus, a 35mmbbl prospect, is 15km SW of Tiof. This follows a lackluster exploration run on larger targets and seems a sensible lower risk move, reducing capital cost requirements.

Uganda Upside Beckons
A successful production test of the onshore Mputa-1 yielded a sustained 810bopd confirming reservoir quality and potentially commercial, albeit fairly modest, flow rates. Initial estimates are for 100-300mmbls of oil in place and recoverable volumes at Mputa-Waraga of 30mmbls. A study has begun on an early production concept that could supply a local power station and mini-refinery. The Nzizi well is to spud in November to test the up-dip potential of the Mputa structure. It represents near term upside. The main targets however remain the larger prospects under Lake Albert. HDR is looking to accelerate exploration and appraisal of discoveries made

For old times sake I wilkl keepo this upodated till they disappear.

I no longer hold as I put th cash elsewhere..

http://www.hdr.com.au/documents/news/00514_ASX%2016%20Nov%20-%20Nzizi%20Drilling%20Update%20and%20Chinguetti%20Reserves.pdf

"Exploration Area 2: Nzizi-1
Since the last report on the Nzizi-1 well, logging operations have been completed and pressure
measurements taken.
Good oil shows were encountered during drilling over a gross interval of approximately 180
metres, directly above basement, in a similar section to that encountered by the Mputa-1 well, 6
kilometres northeast of Nzizi-1.
Wireline logs and pressure measurements indicate an interbedded sequence of oil bearing
sands and shales. No fluid samples or testing operations were planned for this well as it was
drilled in a slimhole configuration and consequently it will now be plugged and abandoned.

The vote was around 90% in favour.

Bye bye Hardman Resources.

http://imagesignal.comsec.com.au/asxdata/20061218/pdf/00679287.pdf

Top riser today.

This one keeps on rising.

Wished I had bought in July.