CWA1 over thye road posted this from the Telegraph

"Share price 98.25p -1.75
Questor says Buy

The news in February that oil has begun to flow in West Africa came as some reassurance to investors in frontier exploration venture Hardman Resources.

The Australian company, joint listed on Aim, has been digging holes in hard-to-find places since 1987 and is now shaking a tin at London investors for $100m (56m), via a placing of 65m new shares at 98p a share, to continue the search. The money will be used to finance exploration in Uganda, Surinam and even further afield like the Falkland Islands.

But it is the Mauritanian deposits that offer the most immediate and meaty returns. Oil from the Chinguetti field, where Hardman has a 22pc stake, is now flowing at 65,000 barrels a day but it arrived too late to provide revenues in the first quarter. Results this week for the three months showed a loss of A$46m (19m).

Current flow from Chinguetti is slightly below forecast but an inflated oil price should more than compensate.

Fortune has favoured the brave souls who got on board at 25p in 2002. Though the shares are being diluted, there should be further upside considering the company is revenue-generating. However, this is one for courageous investors only."

Can't say I feel I am any more a hero than any other E&P investor holding these.

Now If I held some others in this sector, I would have to be raving........

Down overnight in Oz, to $2.29AUS = 94.44 pence mid.

I'll have to see if and how much more this drops to see if I takle on some more again, but I now feel justified in doing what I did, when I did.

I still have a largish holding having sold a third on Thursday.

HC report a Merryl Lynch downgrade, but there is no link, and no substantition to this so take it as it stands for now.

"Merrill Lynch 01-May-06 3 Neutral, Medium Risk - -
The broker has reduced Chinguetti production forecasts, raised capex and raised exploration write-offs. This all conspires to take earnings down 44% in 2006, 23% in 2007 and 9% in 2008. Valuation falls 2% to $2.10."

Bit of a rough ride on the good ship Hardman recently.

Today's news from the Uganda drilling can be read HERE


Further to fall over the summer?

Only if they miss a target in Uganda at Mputa-2, otherwise this trend will reverse rapidly.

Well soul, what a good call you made.

Time for a reversal?

SWW, I seem to have this unfortunate habit of making gloomy predictions that then come even more true than I would have dared to imagine. SEO being a case in point.

I have long suspected that what "HNR" really stands for is "Has No Reserves". :o)

Seriously, I haven't looked at this one for a while now, but I do remember thinking about 12 months back that a valuation of over 900 mil for this company looked way too steep. I'm not sure what price tag is appropriate at present, but given that the market is undervaluing everything in spite of rampaging commodity prices, I'd encourage people to be thorough in their research before making a punt.

The summer isn't yet over and gut feeling tells me that only then will buyers return in great numbers as far as the broad market is concerned. EDIT: the SP reverse may come if current drilling is successful, but the market has been paying little heed to good news of late and it may not bring sustained relief.

If I get some time I may look into HNR again and will of course post any constructive comments.

For those who haven't seen -drilling update out today.

Hardman Resources Ld - Uganda Testing Programme
RNS Number:3747H
Hardman Resources Limited
08 August 2006

STOCK EXCHANGE / MEDIA RELEASE

RELEASE DATE: 8 August 2006

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

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

RE: UGANDA TESTING PROGRAMME

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

Uganda: Mputa-1 flow test - Block 2

At 08:00 on 6 August 2006, flow testing commenced on the Mputa-1 discovery well
in Block 2. Tests of three intervals are planned at this location. Operations
commenced with a speculative test on the fractured granite basement play where
hydrocarbons were encountered during drilling. This test recovered only minor
amounts of oil, likely due to a restricted and tight fracture system.

The two principal tests aim to confirm fluid characteristics and flow potential
of oil bearing sand intervals similar to those successfully tested at Waraga-1
in the last quarter. The testing of the first of two sand intervals should
commence towards the end of this week.

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 drill rig was released by the operator Woodside on 5 August
2006 following the plugging and abandonment of the Colin-1 well and has been
relocated to Block 8, to drill the Flamant-1 exploration well. The well is
expected to spud by the end of this week.

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.

SWW, apparently they tested Waraga successfully, but I can't find an estimate of oil in place. Have you seen anything?

EDIT Waraga-1 flowed at 12,000 bopd on test. That'll do nicely. (50% net to HNR)

SWW, prompted by your question above, I've tried to evaluate HNR's prospects.

I was helped by info from the Report to Shareholders for the Quarter Ended 30 June 2006 Available here

Current Ching production of 37,000 bopd (7,030 net to HNR) and 6,000 from 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. Conservative enough?

HNR also had at least 57 mil of cash at quarter end (this is unclear as one set of figures gives them around 97 mil). EDIT - both figures are correct; 57 mil is the net figure after debt is taken into account.

Take the lower cash figure and you have a co with a justifiable market cap of 464 mil, or 63.8p a share. Current SP is 58 / 61.

Basically the SP dropped earlier in the year due to the uncertainty over Ching's production figures. 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.

I haven't looked into all the prospects yet, but 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.

I'd like to dwell on the prospect a little longer, but at these levels, HNR could well be worth a punt.

Any views?

Note to the above post - I have used what I consider to be a conservative estimate of net profit. HNR's net operating cashflow reported in its quarterly report equates to 75% of turnover, but I find that to be a little bit on the high side for a net profit. Not being familiar with Australian accounting principles, I don't want to overestimate things.

I'd like to think that we could be due some interim results in a few weeks' time. That would certainly help to shed some light on the situation.

soul traders - something that has always been missing here is the quality posts you have added today.

I do hold, averaged at 61p, but no great fortune involved.

Mputa and Waranga are appe=aretly not in the price, there are many buy rec's from Brokers stating this is traading at a discount, othersa say they will not put anything on for Uganda until some forward planning is in place to market the commercialised oil, should that happen.

I'll add a bit more tomorrow.

Hi SWW, thanks for the update! If you have any links to broker recommendations I would be most interested to have a look.

I have been thinking about this stock overnight and while nobody can predict the bottom of the current slump, it seems fair to say that it must be in sight.

We can rely on one or two positive developments in the near future, foremost of which will be up to three additional wells to be drilled at Chinguetti, each adding 10,000 bopd (5,700 net to Hardman).

HNR's share of the action could be worth 24p on the share price (174 mil mkt cap) using my calculation method described above.

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

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 Drilling 3 additional wells, Mauritania. Net 5,700 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 due in 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 Net 22.5% Op: FOGL


This summary does not include a range of seismic prospecst and other potential leads for which dates have not been finalised, many of them in Mauritania.

Comments on errors or admissions are welcome.

Counting on my fingers (!), that means that between now and the end of 2007, something like 13 drilling and/or production instances. As I said yesterday, from the current SP levels, I'm really beginning to like what I'm seeing.

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: HNR has produced an estimate of reserves for Ching; this is now outdated due to the production problems BUT it is interesting to note that the oil price they use is only $25 per barrel, leaving a lot of upside in the current market.

Hello soul traers, I do not have anything current in respect of broker notes, sorry.

You have a very good handle on this Company, I have to say I am impressed!

To much rumour and not enough fact is ruining the Company at the moment.

Add to that the fact that Hardman had over 13 million shorts on the Oz Market till recently, and given the run of bad luck, that's where the sp is today.

I note with frustration that yesterday's RNS has been taken that there is insuffient oil to test at Mputa 1, (it actually said the basement test had insufficient oil to test, not the 3 columns on the way!).

You can see why there has not been a bounce in the sp.

Hardman did do the shar3e placing at 98p not so long back it was heavily over subscribed, so the takers must had been given something decent or they would not have got it away.

I really do not see this going much lower, but I also thought that at 60p and 70p.

This time next year is a prospect worth waiting for I think.

SWW, I agree your comments and thanks for your kind feedback - although I have to sya I haven't used any info in preparing the above other than what's available on HNR's own website.

You are right - I think things will look very different in a year. I was impressed not only by the breadth of HNR's portfolio but also by the amount of activity scheduled for the near future and trust that this will bring a fair amount of reward.

Mputa indeed has plenty left to offer - hopefully the good prospects will produce a decent reality!


I'm going to keep digging for info and watching the SP; will maybe dip a toe in the water before too much more progress is made with Mputa/Flamant. If I were a bit more liquid I'd think seriously about going overweight in this one - it might be a good safe haven for any profits I make elsewhere when the market picks up.

HNR has a very useful presentation on its website:

HERE

Hmm..... yes, about time there was a new one, mind you Interims are soon, so things will be put back into their boxes by then.

Believed later this month.

You are right, they do have a lot to look forward to, the run of bad luck has not been helpful but that must change.

Uganda: Mputa-1 flow test - Block 2 results may come at the end of the week, when drilling they could not wire line test due to equipment malfunctions, the basement as I have said was a possible added bonus, so we will either get no oil flow and not much sediment, (which I doubt), or we will get three reasonable columns of decent oil around the 40 degree API which will catch the Market off guard.

It's easy to say I may top up, but on the other hand, I may stick with what I have.

FWIW I did go heavily overweight on the previous dip before the rise to 108p, and cracked a bottle or two as I sold near the top.

Done that twice with Hardman now, the first time I was a little timid with my holding.

I also took a little hit during May on it, but sold out before we got to this area.

This time, I am waiting to see how Chinguetti pans out, and I would like to see another result in Mauritania worth talking about before I add, (if I do).

I have other irons in the fire and am much more diversified than before so I am not desparate.

Having had two rides on this stock it is too easy to get carried away with it, so I am now looking at it without the much love.

http://www.newvision.co.ug/D/8/220/514018
Mputa-1 oil tests start
Wednesday, 9th August, 2006 E-mail article
By Emmy Olaki

Hardman Resources on Sunday started testing on the Mputa-1 oil discovery well in exploration area 2 in Kaiso-Tonya in Bunyoro.

Last month, tests in Waraga-1 discovery well on the same exploration area established a flow rate of 12,050 barrels of oil per day.

Waraga-1 is 18km from Mputa-1. After the tests in Waraga-1, the company moved the equipment to Mputa-1 where they are starting tests.

According to a statement, speculative tests on the well have recovered minor amounts of oil, but company officials say this is the beginning of the tests and this result means nothing.

We have just commenced testing and are starting a 10-day programme. It is a progressive test. Until its completed, we wont be able to know what exactly is there, John Morley, Hardmans country director, said.

Results from the speculative tests done on the fractured granite basement where hydrocarbons were encountered during drilling have been attributed to a restricted and tight fracture system.

Flow testing on this discovery well commenced on August 6 and tests of three intervals are planned at this location.

The two principle tests aim at confirming fluid characteristics and flow potential of oil-bearing sand intervals similar to those successfully tested in Waraga-1 a few months ago.

Testing of the two sand intervals should commence towards the end of the week.

Morley said by the end of next week, the company will have a full statement on the findings in the well.

The tests are intended to establish whether the oil can flow out of the ground, and at what rate.

Decisions, decisions. PANR is looking interesting at the moment, on a quick scan of recent news.