Nice one SWW thank you, looks very very good.

March 2006 Brochure Here




Thanks to djalan for this

Aspect Huntly Broker Note.(No link, taken from hotcopper).

Hardman Resources Limited (HDR)

Chinguetti Lays Solid Platform
Recommendation: Buy 17/03/2006



Note: Marker indicates price of $1.98 at publication date.

Investment Rating
HDR's strategy is to secure large prospective acreages in greenfields areas and add value prior to farm-out. The exploration portfolio includes offshore Guyane and Eritrea, onshore Uganda, the Timor Sea and the Falkland Islands. Focus is on the Atlantic Margin Areas in deepwater operations. It is hoped the assets can generate value-add similar to the Mauritanian interests. In JV with Woodside Petroleum, HDR's 19% Chinguetti Field began production in February 2006. Chinguetti could be followed by the Tiof development boosting annual equity production to in excess of 10mmbo from CY09. This would see HDR generating after tax earnings approaching A$500m, assuming a US$60/bbl oil price. HDR is a suitable oil exposure for aggressive, growth oriented investors with a stomach for exploration and tangible sovereign risk.



Result Description
First Chinguetti oil flowed on February 25 with capacity reportedly achieved within a matter of days. HDR's 19% share of 75,000bpd peak production transforms it into a cash-flowed producer, lowering the risk profile considerably. The company says Chinguetti's cash contribution for FY06 is likely to be ~US$140m with a low initial operating cost of US$4.50/bbl. HDR recently entered into oil hedge contracts to satisfy debt financing requirements. Around 2.6mmbls of US$44/bbl put options have been purchased, paid for with 2.5mmbls of US$69/bbl sold calls. The options cover the 27 month period to June 2008 and are equivalent to around one quarter of expected production for the period. Chinguetti lays a solid platform for growth including tie-back candidates Chinguetti phase 2, Tevet, Tevet Deep, and Labeidna. Labeidna-1 has been deemed a sub commercial discovery but CEO Simon Potter believes thicker channel sands are located downdip and adjacent. Labeidna is a candidate for appraisal later in the year.


Impact
Our FY06 and FY07 earnings forecasts are 25.6cps and 27.8cps respectively. These are not so much changes to our previous forecasts, rather they reflect HDR's switch to December year end reporting to synchronise with major joint venturers. The company will report a one-off six month result to December 2005 in the transition period. Our forecast is for a loss of 1.2cps exclusive of any exploration write-offs. Our valuation is $2.65ps. Long term assumptions remain a US$60/bbl oil price, A$/US$ exchange rate of 0.76 and a 15% discount rate to reflect sovereign risk. Within the valuation we add $0.46ps for the worldwide exploration portfolio which includes Banda and other Mauritanian prospects excluding Chinguetti/Tiof.


Recommendation Impact (Last Updated: 17/03/2006)
Unchanged.
Price data based on previous close.
Previous Close Market Cap
$1.96 $1,292 (million)
52 Week High/Low
$2.56 - $1.62
Sector
Energy


Intrinsic Valuation
$2.65


Risk High
Company Beta 0.88
Sector Beta 0.96


Year 2005 2005 2006 2007
NPAT ($m) -10.00 -8.2 169.5 184.1
EPS (c) -1.53 -1.20 25.60 27.80
% Change -83.46 -21.57 -2,233.33 8.59
DPS (c) -- 0.00 0.00 0.00
Franking (%) -- 0 0 0
Dividend Yield (%) 0.00 0.00 0.00 0.00
PER -129.08 -164.58 7.71 7.10

Source: Aspect Huntley analyst estimates

2 Year Price Chart






--------------------------------------------------------------------------------
Event Analysis


Studies continue on HDR's 21.6% owned Tiof field. Modelling has hinted at around 1bn bbls of oil in place but the reservoir is complex with thin channel sands and unproven connectivity. WPL reported a potential recoverable reserve of 289mmbo. A phased development may be the way forward to avoid over commitment of capital given the technical uncertainty. HDR's strong balance sheet also puts it in an excellent position if/when the 21.6-24.3% Banda gas field is progressed. Banda has an indicative 1-4TCF (170-670mmboe) of gas and is another appraisal candidate for later this year.


As covered in our last report, convincing Mauritanian exploration success has eluded the partners since the initial Chinguetti/Tiof/Banda discoveries. At that time, the exploration slate, post initial success, read one from eight wildcats. Since then, 18% owned Faucon-1 in the Dana Petroleum operated Block-1 discovered subcommercial hydrocarbons, and both Zoule-1 PSC-C Block 6 and Dore-1 in PSC-B were dry. One from 11 would you believe! And the u2DCone' is the 50mmbl Tevet discovery, to be tied back to Chinguetti.


Mauritanian exploration will kick off again in 2Q06 initially targeting shallow water prospects in PSC A including Colin/Colin Deep. In total there are eight firm and at least two contingent exploration wells within the US$60-70m budget. Colin is a 150-200mmbl Miocene target. Kibaro is next in PSC A, followed by a well in PSC B, Flamant in Block 8 and a well in Block 7. Flamant and the underlying Flamant Deep prospect are two of a number of large carbonate platform/reef targets in Block 8 differing from the rest of the sandstone hosted offshore Mauritanian basin. Half the world's oil is derived from carbonate hosted fields of which Santos' much vaunted Jeruk discovery is an example. Flamant has potential to contain 5 TCF of gas or 1 billion barrels of recoverable oil. It's high risk but one to watch. Awatt and Bogue are contingent wells. Exploration will be followed by Chinguetti Phase 2 infill late 06/07 or near-field exploration and/or Tiof infill.




Diversification in the Plans


HDR wants to add a second revenue stream outside Mauritania and it could come from Uganda where 50% owned Block 2 covering 1,700sqkm of the northern part of Lake Albert and surrounding onshore. The company's first two operated wells have been deemed discoveries and numerous follow-up prospects exist. Mputa-1 yielded a 10m interval of black, waxy oil although wireline tests are needed to confirm fluid or column heights. Approximately 19km to the north east, Waraga-1 discovered a gross oil column of 32m. The partners are currently logging and sampling this light oil. While not conclusive, drilling results have confirmed a working petroleum system providing encouragement for appraisal and further exploration. Planning is underway to test Mputa and/or Waraga and for further wildcat drilling. Uganda has maintained relative political stability since the early 1980s and the country has been experiencing consistent economic growth. HDR signed its Production Sharing Agreement for Block 2 in October 2001. The area is under explored and prior to recent activities had only one well drilled by Shell in 1938.


Our FY06 and FY07 earnings forecasts are 25.6cps and 27.8cps respectively. These are not so much changes to our previous forecasts, rather they reflect HDR's switch to December year end reporting to synchronise with major joint venturers. The company will report a one-off six month result to December 2005 in the transition period. Our forecast is for a loss of 1.2cps exclusive of any exploration write-offs. Our valuation is $2.65ps. Long term assumptions remain a US$60/bbl oil price, A$/US$ exchange rate of 0.76 and a 15% discount rate to reflect sovereign risk. Within the valuation we add $0.46ps for the worldwide exploration portfolio which includes Banda and other Mauritanian prospects excluding Chinguetti/Tiof. The new Mauritanian Government is headed by a Military Council committed to hand over to an elected civilian government by March 2007. The government is currently disputing the validity of amendment agreements to PSCs. HDR has said its initial estimate of the potential impact over the life of Chinguetti ranges from US$0-20m for its 19% share. We view the dispute as symptomatic of working in the third world environment. Potential investors must factor in the very real sovereign risk.


Expect no dividends for the foreseeable future with the focus on capital appreciation. Funding is in place for committed expenditures - net cash was A$41m at end December. Over 140 prospects have been identified across all eight blocks in Mauritania with more than 40 of these potentially each containing in excess of 100mmbls each. Mauritanian LNG potential is sitting as a sleeper with the Banda and Pelican gas accumulations to be appraised. LNG can be a great long term business builder. The comprehensive exploration/appraisal program from 2Q should hold market interest. WPL's sale of its 10% stake in HDR for $118m opens the register to potential acquirers. We retain our Buy recommendation.

SWW,

Some good information there, thanks.

By Barry FitzGerald
March 20, 2006
Page 1 of 2 | Single page
GARIMPEIRO

Advertisement
AdvertisementTHE Woodside-led joint venture operating in Mauritania's offshore waters is within a week or so of shipping the first cargo of oil from the Chinguetti project. Assuming all goes to plan, the shipment also a first for Mauritania will go a long way to easing investor concerns that the current spat between Woodside and the Mauritanian Government over the details of other offshore contracts of works is just that, a spat that will be resolved once the chest-beating on both sides is out of the way.

Max de Vietri, the Perth-based managing director of Baraka Petroleum, will not be dockside to wish the Greek oil tanker carrying Chinguetti's first oil bon voyage. But he might as well be.

As already well documented, the self-described extrovert with the Bathurst high school rock band pedigree is largely responsible for getting Australians involved in the hunt for oil offshore Mauritania in the first place, introducing Hardman Resources to the play. Hardman later brought in Shell and after it shot through, Woodside.

Fast-forward and de Vietri is now doing his own thing in Mauritania through Baraka, focusing on the Muslim nation's onshore oil and gas potential. The group's market capitalisation of $78 million (27 a

share) tells you there are big expectations for the stock.

Stand by for some peripheral deals to be announced in the weeks ahead covering the sweep of the group's activities in West Africa. But the main event for Baraka remains the drilling of the Heron 1 exploration well in onshore coastal Block 20 in Mauritania.

Assuming no delays from weather it can rain in the desert Heron should be put to the test by the drill bit in August-September.

This is a prospect that Texaco was set to drill until Iraq's 1990 invasion of Kuwait convinced US oil groups they were best off at home for a while.

Baraka and its partner, the mighty Chinese oil outfit CNPC, have a consultant's report that ranks Heron as a 465-million-barrel oil target, with a recoverable potential of 132 million barrels (Baraka's share would be 35 per cent or 46 million barrels).

It is that sort of potential and that is all it is until the drill bit proves otherwise that will make Baraka a stock to watch in the months leading up to Heron 1 being spudded in, let alone drilled to total depth.

Uganda update

"Uganda: Block 2 - Waraga-1 Wildcat

The Waraga-1 well has been cased and suspended at a total depth of 2,010 metres
pending the commencement of a well testing programme. Weekly reporting will
resume once the testing programme is about to commence.

Pressure tests and samples from the lower zone of interest between 1,780 and
1,930 suggest the presence of two oil columns in a number of sands of varying
thickness and quality through a lower net section. Oil samples recovered from an
excellent reservoir sand at 1,893 metres appear to have a similar gravity to the
oil recovered in another, previously reported, shallower zone at approximately
1,700 m. Pressure data suggest that this shallower 32 m gross interval
represents a 45 m light oil column in a better net reservoir sand section.

Testing of this well and the Mputa discovery will provide better information on
the reservoir than is available from the wireline logs and confirm oil
properties. Additional appraisal drilling is being planned to determine the
location of oil water contacts and target potential improved reservoir
intervals.

Waraga-1 is located 19 kilometres to the northeast of the recently drilled
Mputa-1 oil discovery well and 41 kilometres southwest of the Butiaba Waki-1
well (drilled in 1938). Waraga-1 tested a structural prospect with identical
geological targets to the oil bearing reservoirs seen at Mputa-1. The Waraga
prospect was defined by the 2005 onshore seismic survey and the geological risk
was significantly reduced by the success of Mputa-1.

Looks very good to me........

Seawall

Your post on iii says that you expect news on Friday
'Friday's results will explain a bit more on Uganda I am sure'

Could you let me know which results you are expecting ?

Thanks very much

Cameron

HNR has agreed a Farmin Agreement with Ndouv Resources that will result in HNR acquiring a 50% interest in the offshore and nearshore Tanzania Portion of the Ruvuma Basin.

This is in exchange for HNR funding 100% of the 2D onshore seimic survey.

Cam - I believe you have yopur answers to all of this?

If not ask and I will point you in the right direction.

ps I am poo bear on advfn, I tried without success to change it to seawall but it keeps flying back so I gave up.

In respect of this stock?

Game on!

Are these possible take-over bids from either China or India true?

Technotamed - no one really knows, there has not been a reaction in the sp, so it may just be fancifull thinking.

Meantime the dispute between the Mauritanian Government and Woodside is resolved.

Dispute resolved

A bit more in this report from The Age

http://tinyurl.com/n6adw

"Woodside Petroleum has resolved a dispute with the Mauritanian government, agreeing to pay more than $US50 million to the government in a 'profit oil bonus'.

A Woodside spokesperson said as part of the resolution Woodside, and joint venture partners Roc Oil and Hardman Resources must pay a combined $US100 million profit oil bonus to the West African government.

He said this provided the government with an early revenue stream from the recently-commissioned and Woodside-managed Chinguetti operation, where otherwise there would have been a delay in any benefits.

Woodside's share of the profit oil bonus payment is $US53 million based on its 47.3 per cent stake in Chinguetti.

Hardman has a 19 per cent stake and Roc Oil a 3.25 per cent stake and it was not clear how much they would need to contribute to the bonus payment...................
..........The joint venture partners must also provide a $US1 million environmental bond to the government and move operational control of the recently commissioned Chinguetti operation to Mauritania."

buyers in at 1 pound today could be going to push at the high of 106p,is there any mention in the shares mags.hoping for 200p by year end.

That would be nice cellby and if things go as hoped you may see more than 2, but if they don't.............!

Same as any other E & P, except I am very optimistic that this will go well, (all imo and nag + dyor etc)..

Steady as she goes, just how I like it.

I have copied a couple of posts from TMF that cover and disect todays news,

(Superhard)
March Quarterly Report:

http://imagesignal.comsec.com.au/asxdata/20060424/pdf/00608196.pdf
Suriname Announcement:
http://imagesignal.comsec.com.au/asxdata/20060424/pdf/00608195.pdf

___________________________________________________________________________________


(618)"Hardman ... has signed Heads of Agreement with Suriname's State Oil Company, Staatsolie Maatschappij Surinam N.V. ('Staatsolie') and its affiliate, Paradise Oil NV, to acquire a 40% working interest in the onshore Uitkijk and Coronie concessions in Suriname, South America. Hardman is now in the process of concluding ...arrangements for a third party potentially to participate in a small portion of Hardman's acquired interest.

The concessions are both large and prospective, covering a total area of approximately 3300 km2, and lying directly adjacent to Suriname's main producing oil fields, Tambaredjo and Calcutta (Figure 1).... Hardman will earn its interest via the funding of an initial exploration campaign of up to 25 wells capped at a maximum expenditure of US$ 8.5million; drilling is anticipated to commence in the 4th quarter of 2006..."

Another fairly low cost entry to new acreage, and it's in line with their focus on Atlantic basin plays although this is onshore acreage. With drilling of up to 25 wells commencing in Q4 this year, they are not mucking around!!! I like the acreage because of its proximity to the Tambaredjo oil field, which as per previously discussed by Scotty and Dean at the 2004 Melb presentation session, is a very prospective region with the clear presence of a good source kitchen, now all they need is a good migrating path and a trap! *Tongue in cheek* :)

In the Qtrly Report, the information I find most useful was the bit on Tiof...


"...The concept being optimised by the field operator, Woodside, is based on a dry tree unit, either a tension leg platform (TLP) or possibly a spar platform, with a light-weight integral drilling facility. Under this scenario, initial development would cover the central area of the Tiof field, with subsequent further development to be determined once production history has been obtained.

The key advantage of this proposed route... is that drilling and subsea equipment costs would be significantly reduced, thus bringing down the economic threshold of recoverable reserves per well. However, this concept does carry a higher initial facilities capital cost than a leased FPSO, with project capex indicatively in the range US$650-700 million. Given the complexity of the Tiof reservoir, and particularly concerns about the connectivity within the reservoir, reducing costs per well may be a key determinant of ultimate economic recovery. The next step would be a joint venture decision anticipated in the current quarter to take the selected concept forward..."

Sounds like very prudent risk management. For those of you wondering what a DTU is and its purpose, here's a useful PDF to read (page 4 to 8)...

http://www.slb.com/media/services/resources/oilfieldreview/ors00/win00/p2_9.pdf

Also, it sounds like they are very close to reaching an consensus over the proposed action plan going forward.


"...At this stage the concept is provisionally for six initial production wells which would access reserves in the region of 40-60 mmbbls and first oil should be by 2009. With the facility having some 15 to 18 well slots to allow for future expansion, there would be considerable potential for additional reserves to be accessed from further development drilling. Potential reserves could be further enhanced by better-than-assumed reservoir parameters. Indicatively, the first phase would be designed to handle oil production of approximately 50 mbopd. The Chinguetti FPSO could be used for final processing and storage prior to export, at least for the initial phase of development, although a dedicated floating storage and offtake vessel is also an option..."

So if we assume the impact of an additional 50MBO of production from Tiof by 2009, that's a significant boost to Hardman's earnings. Of the top of my head, with the expected upfront capex as well as the equity position of each JV partner very similar to Chinguetti, the DCF model should reflect approximately double the current 2009 expected earnings estimate. Actually, it would be slightly less then double because of the lower general consensus oil price projection for 2009 - which is around US35-US40. But based on that and a start up date of Q1 2009, Hardman should be earning around 250-300 million by 2009 - or more if higher oil price is sustained through till then. Based on today's price, that would put Hardman on a perspective PE of between 6.5x to 5.4x.

And that's not including any projected earnings from Uganda, which if found to be productive and commercial, would definitely be producing before then given that they are onshore/near the lake-shore. While on Uganda, testing equipment is already being mobilised on site for production testing of Mputa and Waraga. A second rig is also being mobilised to drill Mputa-2/Mputa-C at the same time. Should be quite an action-packed two months to say the least.

"Hardman Resources in placing of 65.9 mln shares at 98p UPDATE
AFX


(gives production details)

LONDON (AFX) - Hardman Resources Limited said it plans a placing of up to 65,918,810 ordinary shares at 98 pence each to finance accelerated appraisal and exploration plans.

The placing represents up to 10 pct of the current issued share capital of the company.

Hardman said that, with the Chinguetti field now in production, further discoveries offshore Mauritania awaiting development, and the recent successes in Uganda, it has successfully built a balanced portfolio of exploration and production assets as a platform for future growth.

The company said it now has a set of attractive investment opportunities and in view of these new investments, the board decided to carry out the fundraising announced today.

In Uganda, the company proposes to make further investment to appraise the

recent play-opening discoveries, Mputa-1 and Waraga-1. Looking ahead, Hardman said it has started planning for drilling large offshore prospects beneath Lake Albert and will also likely acquire additional 2D and 3D seismic data to extend coverage over the onshore oil trend. Hardman said it expects to spend at least 20 mln usd in Uganda over the remainder of this year and next.

In Guyane, some 10 mln usd of the proceeds of the placing is anticipated to provide funding to test the prospectivity of different play types by drilling at least two wells. Drilling is now most likely to commence in 2007, subject to rig availability.

The company said it has also been pursuing a number of attractive new venture opportunities, of which the recently announced ventures in Tanzania and Suriname are the first to be signed-up.

Out of the proceeds of the placing, 25 mln usd is allocated to specific new venture proposals, including further Atlantic Margin exploration new ventures at an advanced stage of negotiation.

Hardman also said it proposes to bid for acreage in the upcoming Trinidad licensing round.

Any left over proceeds from the placing will be allocated to increasing working capital, including support for any new venture commitments, and reducing reliance on the Group's existing project finance facility.

Operating cash flows from Chinguetti are presently strong, notwithstanding that production levels are currently below oil facilities capacity, Hardman said.

The reduction is due principally to lower deliverability from the northern wells. This will not be compensated by over producing from the southern wells, which would likely cause gas and water handling issues, the company said.

Hardman said its cash earnings and net debt and cash forecasts for 2006 will be affected by the actual production for 2006. However, the Hardman board said that current high oil prices, if sustained, should more than offset the reduction in forecast cash earnings for 2006."


The last placing was very slow to clear, so I am not too amused with thus, the consolation is the plans and advanced negotiations they are in.

On a grand scale of things, what's another 65 million shares?

A healthy pick up for any possible predator I suppose.

seawallwalker not at much of a giVerway price,unlike the last placeing.sold out yesterday when they started droping.comeing back later see where the price lands. ps. pVr moVing neVer toped up.

Hello hello, cellby.

No, not really a give away, not too amused really, I would normally have sold at the same level you did and for the same reasons, but decided to hang on because of lots of positive vibes, trouble is those vibes were telling me to sell as well I think.

I had some PVR the other day, looks good.

I may just knock off a few more......... you writing style reminds me of someone else?

wish it reminded me of some else who could spell.