Good old hardman.

At it again!

One to follow people imho.

They won't stop at modest profit.

5* company.

The Company

Overview

Hardman Resources Ltd is an Australian natural resource company listed on the Australian Stock Exchange Limited and on the Alternative Investment Market of the London Stock Exchange PLC. It is named after one of the early Western Australian explorers, E T Hardman. The Company has built a portfolio of assets in oil and gas production and exploration acreage in may areas of the world.

In the mid 1990s Hardman embarked upon a new international strategy of acquiring acreage in under-explored but prospective regions. The first and most significant achievement was Hardman's first Production Sharing Contract (PSC) offshore Mauritania, West Africa, which was signed in late 1996. This contract area, in which two large discoveries have already been made, together with other subsequent PSCs in the same offshore basin, today represent Hardman's largest exploration project, covering an area of approximately 74,000 sq. kms. Management believes that Hardman is now in a position to capitalise on its drilling success in Mauritania and can achieve the status of a significant oil producer by 2006. Initial plans for development studies indicate that a peak production rate of about 75,000 bopd from the Chinguetti Field is possible resulting in a net production for Hardman's 21.6% interest of over 15,000 bopd. The Company intends to retain its level of equity in the Chinguetti field development through project financing.

Hardman has assembled a portfolio of projects which are currently at varying stages of development. These include: offshore Guyane (French Guiana), offshore Gabon, the Albertine Graben in Uganda, the Great South Basin offshore New Zealand, and the Southern Falklands Basin and the Timor Sea.

Combining our Australian producing assets together with the undeveloped reserves in Chinguetti and Banda Fields in Mauritania provide Hardman with a substantial proven and probable (2P) reserve base. Based on Hardman's in-house estimates of field reserves the Company now has net recoverable reserves of up to 100 million barrels of oil and oil equivalent.

Hardman's success in offshore Mauritania has resulted in its focus on gaining a low cost entry into a frontier area, where oil potential could be recognised from the old exploration data. Thus, the Company had the advantage of being the originator of the project, rather than gaining entry at a later and more costly stage. The Company intends where possible to repeat this strategy with projects such as Guyane and the Falklands.

Hardman will continue to develop new frontier projects with the intention of providing Shareholders with exploration upside. At the same time the Company will focus on lower risk exploration of its two core production areas in the deep water Mauritania basin and in the onshore Perth Basin.

The corporate philosophy is one of entrepreneurial, but conservative, independent, measured risk-taking in hydrocarbon exploration and development worldwide. All projects involve a combination of the Company's wide range of expertise, experience, technical and financial skills with local partners to allow exploration and development to progress rapidly and with due regard to local political, social and environmental issues.

Directors

Alan Burns, Chairman


Mr Burns has been actively involved at senior levels in the oil and mining industries in Australia and worldwide for over 26 years. In this period Mr Burns has been associated with companies that have participated in the exploration and development of oil and gas fields both onshore and offshore, and gold and diamond mines in Australia. Mr Burns is a founding Director of Hardman.


Ted Ellyard, BSc (Geology), Grad Dip, MAAPG, Managing Director

Mr Ellyard graduated as a geologist from Curtin University, Perth in 1974. He has gained over 29 years experience with major Australian and international resource companies in mineral and petroleum exploration and development, including Western Mining Corporation and Kuwait Foreign Petroleum Corporation. Mr Ellyard has been involved in the management of listed Australian resource companies for the past 15 years. He has been Managing Director of Hardman since 1996 and has overseen the Group's international expansion into petroleum projects in West Africa, South America and the Australian region. He is also a non-executive director of Bounty Oil & Gas NL.


Scott Spencer, BA (Hons), BPhil, MLitt, Dip AICD, Assoc. AAPG, Executive Director

Mr Spencer is a former member of the Australian Foreign Service and he worked for nearly 15 years with the Australian Government on international political and economic issues. He has post graduate degrees in Russian studies from Oxford University and is fluent in Russian and French as well as a number of other languages. From 1990 to 1993 Mr Spencer was regional director in Western Australia for the Department of Foreign Affairs and Trade. Since 1993 he has been based in Western Australia and has worked on international resource projects. Mr Spencer has been a Director of Hardman since 1995.


Peter Raven, MBE, FCA, FCT, Non-Executive Director

Mr Raven has had a long career at senior levels in the international petroleum industry. After qualification as a Chartered Accountant, he joined the Ultramar Group in 1964 (until its takeover by Lasmo in 1992, Ultramar was a leading UK independent petroleum company). He relocated to New York in 1980 as a Senior Vice President - Finance, and was subsequently appointed Finance Director of Ultramar plc (1982), Executive Vice President (1984), and President and Group CFO (1988), in which capacity he was also responsible for the Ultramar Group's corporate development and risk management. Mr Raven now lives in London and Ireland and is a non-executive director of FX Energy Inc and Chairman of The Total Translation Company Ltd.

Robert Carroll, BEc, FCPA, Non-Executive Director

Mr Carroll is a graduate in economics from the University of Sydney and a qualified accountant with over 30 years experience in the resources industry, including 21 years as a senior finance executive with Woodside Petroleum Ltd where he was Chief Financial Officer from January 1997 to mid 2002. Mr Carroll has substantial experience in large scale international financings of oil and gas facilities and was involved at a senior level right through the period of Woodside's transformation from a junior explorer to a significant petroleum production company. He is currently a non-executive director of Sydney Gas Ltd.


Senior Management and Staff

Kathryn Davies, BBus, ASA, Company Secretary and Chief Financial Officer

Ms Davies holds a Bachelor of Business with a double major in Accounting and Business Law. She has been employed by Hardman for over 9 years, commencing as Company Accountant in 1993. She was appointed Company Secretary in October 1999 and Chief Financial Officer in May 2001. Ms Davies has also worked for other ASX listed companies which have been involved in both natural resources and technology development.


Bob Cassie, BSc (Hons), Asset Manager - Africa

Mr Cassie has had more than 24 years experience in the petroleum exploration industry. He joined Hardman in 2002 to work on its African assets. Mr Cassie previously worked for CSIRO, the Australian national research organisation and held positions managing Mobil's Australian deepwater exploration and its PNG exploration, development and producing assets. In addition, he held a variety of technical and management positions in Ampolex Limited and was both a geologist and geophysicist for Esso Australia. Mr Cassie is a graduate in geophysics from the University of Sydney.


John Sheppard, MBA, BEng, Met Cert. M AusIMM, Asset Manager - Australia and Europe

Mr Sheppard holds a Masters degree in Business Administration and a Bachelors degree in Mining Engineering. Mr Sheppard has over 21 years of technical, financial and managerial experience in the resource sector and a background in project finance and investment banking. He has considerable domestic and international experience from assignments in Australia, Canada, New Zealand, Indonesia, United States of America, South America and Central Asia. He has been involved in international exploration and development projects, the commercial negotiation and financial evaluation of the natural resource projects, acquisitions and divestments and project financings including major oil and gasfield developments.


Terence Nilsen, BSc (Hons), Exploration Supervisor

Mr Nilsen graduated as a geologist from the University of Western Australia in 1985. He has 15 years experience with junior and major oil and gas exploration and production companies. Before joining Hardman in 2001 Mr Nilsen worked with Santos Limited. In recent years, Mr Nilsen has been involved in the discovery of several hydrocarbon fields and successful gas field developments.


Ian Bulley, MSc, BSc, Senior Geologist

Mr Bulley holds a Masters degree in Petroleum Geology from Imperial College, London and a Bachelors degree in Geology from Reading University. He has 17 years experience with major oil companies, junior explorers and consultancies, working in North Africa, the Middle East, the UK and Australasia. Prior to joining Hardman in 2002, Mr Bulley worked for PGS Reservoir Consultants on North West Shelf and international exploration and development projects, asset evaluations and reserves certifications. Recently he has been involved in several successful oilfield appraisal and development programmes.


Health, Safety and Environmental Policy

Hardman Resources Ltd is a successful international oil and gas company with operations and acreage in Australia and around the world. Hardman is committed, on a global basis, to achieving health, safety and environmental excellence in all of our business practices and operations.

It is Hardman's Policy

To approach each project with the highest integrity, with special regard to local political, social and environmental issues.
To ensure that potential health, safety and environmental risks associated with all activities are assessed as early as is practicable in order to minimise and manage adverse effects and to identify opportunities for improvement.
Implement systems to identify hazards, manage risk and hazardous substances, thereby reducing the risk to people and the environment.
Communicate with and involve all company employees and contractors in all aspects of Health, Safety and Environment management, ensuring that no persons are put at risk due to lack of information, communication or skills.
Comply with all relevant legislation, Standards and Codes of Practice as a minimum requirement. Ensure all sites are rehabilitated after use and any hazards eliminated.
Ensure this Policy intent is communicated to all employees, the local community and other interested parties.

This policy will be subject to periodic review to ensure that the stated management commitment and strategic goals have continuing relevance to Hardman Resources Ltd.



PROJECTS


JINGEMIA OILFIELD - EP413 (HARDMAN 12.0%)

Hardman's remaining 12% equity in EP413 (Jingemia) has been made subject to a put and call option arrangement such that Hardman can require ARC Energy Limited to purchase the interest and ARC may require Hardman to sell the interest to ARC for an agreed amount. Under the terms of this Agreement, ARC will acquire the interest no later than June 2005.

EP413 adjoins the Woodada production licences to the north and TP15 to the west and covers the prospective area between the Woodada and Dongara fields. Following the completion of a small 2D seismic survey in early 2002, the Joint Venture agreed to drill the Jingemia-1 well in October 2002.

Jingemia-1 was confirmed as a new oil discovery following the recovery of 36.6 API oil from drillstem testing in late October 2002. Subsequent production testing of the well has confirmed a stabilised production flow rate of up to 2,000 bopd.

Production Testing

Production Testing has been approved through to 21st May 2004. The aim of the extended production test is to acquire additional information on reservoir performance, water injectivity and pressure maintenance to enable the formulation of a field development plan and confirm the facilities required for permanent field development.



TIMOR SEA EXPLORATION PERMITS

Hardman Resources Ltd purchased from West Oil NL two permits, AC/R1 (100% equity) and AC/P26 (49.375% equity) in the productive Timor Sea region, offshore Western Australia in October 2003. Hardman also holds an option over 100% equity in WA-316P to the northeast of the Talbot Field and is to make certain bonus payments to West Oil NL in the event of a commercial discovery in WA-316P.

AC/R1 (Hardman 100%)

AC/R1 encompasses the Talbot Field which was discovered in 1989 by Santos with the Talbot-2 appraisal well drilled in 1990. Hardman's initial estimate of recoverable reserves ranges from 4 to 6 million barrels which is currently deemed uneconomic for a "stand alone" development

AC/P25 (Hardman 95.%)

AC/P25 adjoins AC/R1, was granted in 1998 and is covered by extensive 2D and 3D seismic data. Several leads have been identified in the permit although an additional 440km seismic acquisition will be required before October 2004 when a decision to drill is required.

AC/P26 (Hardman 49.375%)

AC/P26 adjoins AC/R1, was granted in 1998 and is covered by extensive 2D and 3D seismic data. Several leads have been identified in the permit although a decision to drill is not required until May 2004.

WA-316P

The WA-316P permit lies in the eastern Timor Sea area within Western Australian waters, 12 kilometres south of the producing Laminaria Field. The licence has a well drilling obligation to be satisfied by December 2004. The option held by Hardman will enable it to undertake detailed technical studies of the area before being required to commit to drilling.



ERITREA

On 5th January 2004, Hardman signed a Memorandum of Undertaking (MOU) with the Government of Eritrea over the 11,550 square kilometre Massawa Block, offshore Eritrea. Hardman will hold a 30% interest and has been joined by Afrex Limited and Pancontinental Oil & Gas NL in this venture.

The MOU covers the principal terms negotiated over the last twelve months with the Government for a Production Sharing Contract (PSC) over the Massawa Block, located in the Red Sea solely within Eritrean territorial waters. Subject to the PSC being finalised the joint venture has exclusive rights to explore for hydrocarbons in the Massawa Block for up to seven years.

The Massawa Block lies in a Tertiary aged salt basin off the Southern Red Sea. To the north of the Massawa Block, in offshore Egypt, a large number of commercial oil and gas fields have been discovered over the past twenty years. Within the Massawa Block itself, surface oil seeps have been identified near the Dahlak Islands.

The exploration programme in the Massawa Block will commence with re-mapping of the existing seismic data and seismic reprocessing (if necessary) followed by the acquisition of new seismic data. The Joint Venture will then consider inviting farminees to earn equity in the Block by drilling one or more exploration wells.



Falkland Islands - South Atlantic

The Falkland Islands are located in the South Atlantic approximately 500 kilometres east of South America at around 52 degrees latitude (equivalent to southern England). The Falklands are a dependency of the United Kingdom but are administered by the Legislative Council of the Falkland Islands which also governs the exploration and production of petroleum.

Hardman holds a 30% interest in a joint venture that was awarded a large offshore exploration permit covering ten licence blocks, with a total area of approximately 57,000 square kilometres, in the South Falklands Basin. The licences are situated to the south and east of the Falkland Islands and have been granted by the Government of the Falklands in accordance with "open-door" legislation introduced in 2001. (See Location Plan Falkland Islands.)

The South Falklands Basin, where Hardman's licences are located, is distinct geographically and geologically from the northern basin which was the focus of exploration activity during 1996-98. The southern basin is under-explored and is covered with a sparse grid of seismic dating from 1993.

The joint venture has now completed mapping of 4,340 kilometres of old seismic data purchased from seismic contractor firms. A number of leads and differing play types have been identified and these will be the focus of seismic reprocessing work currently underway. A decision will then be made on whether to acquire infill 2D seismic or 3D seismic over the leads prior to seeking a farmin partner for the drilling phase of the exploration.



GABON

Gabon lies astride the equator on the west coast of Africa. Petroleum constitutes the principal source of revenue for the country with current production of more than 300,000 barrels of oil per day.

Hardman holds a 12.86% working interest in two PSCs offshore Gabon which were awarded in November 1999 and are known as Iris Marin and Themis Marin. The two PSC areas are operated by Fusion Oil & Gas N.L. and cover a combined area of approximately 2,000 square kilometres. The PSCs are located in a proven and well established petroleum province.

The Iris Marin Licence is adjacent to Shell's onshore Gamba and Ivinga Oil Fields which, combined, had original recoverable reserves of 350 MMBO (million barrels oil) with some 300 million of this having already been produced. The Themis Marin Licence lies some 30 kilometres to the southeast of the Iris Marin Licence. Between the two licences is the Sette Cama High which reportedly contains up to 2.5 trillion cubic feet of dry gas. Recent drilling by Pioneer has discovered an oil rim around this gas field which extends close to the Themis Marin Licence.

A 2D seismic survey of 2,732 line kilometres was acquired across both licences during early 2002. This new seismic data has upgraded the prospectivity of both PSCs. Within Iris Marin a large number of leads with potential reserves up to 100 MMBO were identified. In Themis Marin a number of smaller features were identified on the southern end of the Sette Cama High, immediately south of Pioneer's oil discovery. The individual small closures may be part of a larger closure and possibly an extension of Pioneer's discovery.

The joint venture has agreed to enter the next term of both PSCs and committed to 3D surveys of 200 square kilometres and 160 square kilometres in Iris and Themis respectively. These surveys are necessary to improve the imaging of the leads, which are located under shallow salt diapirs and are subject to complex velocity variation in the overlying section. It is hoped that the 3D seismic will delineate one or more drilling locations for testing in late 2003 or 2004.


Guyane

Guyane (also known as French Guiana) is a French overseas dependency located on the north-eastern coast of South America, between Surinam to the west and Brazil to the south and east. This geographical region has been the focus of increased petroleum exploration in recent years. Guyane, however, is under-explored, with only some seismic coverage and two shallow-water wells drilled in the 1970s.

Hardman is the Operator and holds a 97.5% equity in the Exclusive Explortion Licence ("EEL") offshore Guyane, which was awarded on 1 June 2001. The licence covers the major part of the offshore basin of Guyane and extends from the twelve mile coastal limit to the 3,000 metre depth contour with a total area of approximately 65,000 square kilometres. (see Location Plan Offshore Guyane).

Acquisition of the large 2D seismic survey was completed in mid-February 2003. This data has been mapped and interpreted by Hardman's technical team. The new seismic is of excellent quality and has confirmed the existence of a thicker sedimentary section in the basin and indicated structuring in these deeper sediments which was not visible on the 1970s seismic data. The technical work has confirmed the major structural trends of the area. Numerous hydrocarbon loads, both structural and stratigraphic, have been identified in this vast exploration licence area. Of particular interest is a giant sized structure with multiple objectives and is referred to as the "Matamata Prospect". The Guyane project is currently being presented to a limited number of potential farmin partners and several are now reviewing the project.


Mauretania

Mauritania is located on the northern Atlantic coast of West Africa between Morocco and Senegal. The country is largely arid and has a population of about 2.7 million. Mauritania gained independence from France in 1960 and now has a multi-party political system with an elected Presidency and two houses of parliament. The country presently has no oil and gas production, although it is one of the few countries in West Africa with refining capacity. Formal diplomatic relations with Australia were established in late 2001.

Hardman has interests in Production Sharing Contracts ("PSCs") in eight offshore blocks in Mauritania (i.e. diagram showing summary of holdings), with the first PSC being signed in 1996. These blocks cover approximately 67,000 square kilometres, extend along 540 kilometres of coastline and include the majority of the prospective basin area, offshore Mauritania.

Two joint venture groups were established by Hardman. Blocks 2, 3, 4, 5 and 6 which cover the central, deep water salt basin were divided into Areas A, B and C under the terms of Farmin Agreements with Woodside Mauritania Pty Ltd ("Woodside") and ENI-Agip ("Agip"), signed in 1998. Hardman also holds three PSCs over Blocks 1, 7 and 8 which straddle the Woodside joint venture areas. These PSCs are in joint venture with Dana Petroleum plc ("Dana"), an oil production company listed on the London Stock Exchange.

Woodside Joint Venture Areas

Since 1998, Woodside has shot two large seismic surveys over the Joint Venture areas at a cost exceeding A$50 million, including a total of 3,580 square kilometres of 3D seismic acquired during 2000. Initial exploration interest was focussed in the deep water portion of Blocks 3, 4 and 5 (Areas A and B) where mature source rocks, turbidite sand reservoirs and salt dome anticlines were identified from the 2D seismic data. In addition a small 3D seismic survey was acquired in Block 6. All of this work was undertaken as part of Woodside and Agip's farmin obligations. The drilling of the Chinguetti-1 and Courbine-1 wells by Woodside and Agip during 2001 completed the farmin obligations for Joint Venture Areas A and B with Hardman retaining an interest of 24.3% and 21.6% respectively.


Dana Joint Venture Blocks 1, 7 and 8

The Dana Joint Venture comprises three PSC areas which are situated immediately to the north and south of the Woodside/Agip acreage. Under the terms of the Joint Venture, Dana Petroleum plc ("Dana") is operator, while Hardman has an 18% interest in all blocks.


Block 1: The 3D seismic survey covering 1,330 square kilometres was completed during the last quarter of 2002. Processing of the data is being fast-tracked and a preliminary version of the data will be available by February 2003 to enable interpretation work to commence. The joint venture will need to commit by June 2003 to drill the first well in the Block.
Block 7: Interpretation of the 3D seismic acquired in early 2002 has identified a large prospect with multiple reservoir targets. The joint venture partners are in discussion on the well commitment, joint venture equity and timing to drill this prospect during 2003 and a decision is expected in February/March 2003.
Block 8: Block 8 is different from the rest of the Mauritanian offshore acreage as it includes carbonate platforms and reefs of Late Cretaceous to Palaeocene age. Interpretation work is continuing with an emphasis on understanding the carbonate seismic stratigraphy to identify potential reservoir and seal facies necessary to establish a drillable prospect. A decision to drill or surrender the permit will be required by June 2003.

The first drilling campaign for the joint venture commenced in May of 2001. The drilling of the Chinguetti-1 and Courbine-1 wells by Woodside Mauritania Pty Ltd ("Woodside") and ENI-Agip ("Agip") in 2001 completed the farmin obligations for Joint Venture areas A and B with Hardman retaining an interest of 24.3% and 21.6% respectively.

The well results are summarised as follows:

Chinguetti-1 Exploration Well: encountered a 120 metre gross oil column, a significant oil discovery.
Courbine-1 Exploration Well: targeted Upper Cretaceous sandstones in a broad structural closure. Gas shows were encountered in the well, but the main target sandstones were water net.

Chinguetti-1 Oil Discovery: The well was drilled to a total depth of 2,620 metres in 815 metre water depth (1,805 metres below the sea floor). Several oil bearing sandstones were intersected in the primary objective over a gross hydrocarbon interval of 120 metres, with no oil/water contact identified.

A shallower secondary objective contains gas bearing sandstones over a 7 metre interval. Using a wireline sampling tool, 4 oil samples were obtained from the primary target zone.

Courbine 1-A: The well was drilled to a total depth of 4,452 metres in 1,250 metres water depth (3,202 metres below sea floor). The primary cretaceous objective contained no commercial hydrocarbons, however minor hydrocarbon shows were encountered. The well also intersected a 9 metre gas column in an upper tertiary objective.

The 2002 Mauritania drilling campaign commenced on 30 July 2002 and was completed in early November 2002 with three highly successful wells out of the four wells drilled. The well results are summarised as follows:

Chinguetti 4-2 Appraisal Well: encountered a 94 metre gross oil column on the northern (upthrown) flank of the salt structure.
C-4-3 Banda Exploration Well: encountered a 110 metre gas column underlain by 24 metre gross oil column, confirming a new oil and gas discovery.
Chinguetti 4-4 Appraisal Well: encountered a 114 metre gross oil column on the downthrown side and confirmed an oil column from drilling of at least 280 metres.
C-6-1 Thon Exploration Well: unsuccessful well after encountering only minor oil and gas shows within low quality reservoir sands.

Chinguetti Field Appraisal

The Chinguetti Oil field is a typical salt dome structure with a vertical relief at the target depth of over 300 metres. The primary oil zone is contained within Miocene aged deep water turbidite sandstones which were deposited prior to the salt uplift. The structure is faulted with a downthrown southern flank (Chinguetti-1) and an upthrown northern flank, tested by Chinguetti 4-2.

The second Chinguetti well (C-4-2) encountered a 94 metre oil column. This well confirmed that the oil extends across the entire structure and provided confidence that Hardman's earlier estimate (2001) of 110 MBO was reasonable.


The third well (C-4-4) was drilled on the downthrown side and encountered 114 metre oil column which included an additional 69 metres of oil below the lower limit predicted from the 3D seismic. The total oil column height on the downthrown block confirmed by drilling the two wells (C-1 and C-4-4) is 280 metres.

Excellent quality reservoir sands have been encountered in all three wells with a net to gross pay ratio of between 25% to 40%. A production flow test was undertaken on a 10 metre sand interval in the Chinguetti 4-2 well. The test flowed oil at rates up to 1,560 barrels per day through a 30/64" choke. The production rate was restricted by sand inflow from the reservoir, however pressure data from the test provides confidence that the well is capable of producing at much higher rates. Sand inflow is common in highly porous sands and can be controlled by using sand screens and gravel pack techniques in the production wells. Preliminary field development models have used a Chinguetti field production rate of 75,000 barrels per day as the initial production rate from possibly five wells.

Banda Oil & Gas Discovery: The C-4-3 Banda well encountered a 110 metre gas column and a 24 metre oil column. Approximately 75% of the Banda structure is situated in PSC Area A (Hardman 24.3%) and 25% in PSC Area B (Hardman 21.6%).

Block 6: The C-6-2 Thon well was drilled as the fourth well in the 2002 drilling programme. The well was drilled to a depth of 3,294 metres and abandoned after encountering only minor oil and gas shows in low quality reservoir sands. Although the result was disappointing, this well provides valuable information which is being studied to identify future exploration targets in the Block 6 area.

Prior to the well spudding, Hardman reduced its interest to 22.42% under the terms of a farmout agreement with Petronas Carigali, the Malaysian state oil company. As a result of this agreement and a previous farmout agreement with Woodside, Hardman was free carried through the entire cost of drilling the C-6-2 Thon well.d by the joint venture.

Results of 2003 Drilling Programme

Three exploration wells were drilled in the Woodside operated PSC Area B by the Smedvig Offshore AS drillship "West Navigator" which arrived in Mauritanian waters on 27 October 2003 as follows:

Tiof-1 Exploration Well
PounExploration Well
Tiof West Step Out Well
In November/December 2003, the Pelican-1 exploration well was drilled in the Dana operated Block 7, usint the drillship "Jack Ryan" which remained in Mauritanian waters after completing production testing of the Chinguetti 4-5 well.

Tiof Oil Discovery: The Tiof Prospect is an independent structural closure within a Miocene channel sandstone system. The Tiof channel system is a separate feature but of similar age to the oil and gas reservoir at Chinguetti and Banda. The Tiof Prospect is adjacent to and associated with a salt diapir and is located approximately 25 kilometres north of the Chinguetti Oil Field.

The Tiof-1 exploration well was spudded on 28 October 2003 and was drilled to a total depth of 2,870 metres in water depth of 1,080 metres. The well intersected good reservoir quality within the upper part of the Miocene channel system with an upper gas cap of 49 metres gross thickness underlain by a 39 metre gross interval of oil bearing sandstones confirmed by wireline sampling. Below the confirmed oil zone there is an additional 73 metre section with poor reservoir quality which may be oil bearing, indicating a potentially large oil accumulation of over 200 million barrels.

To follow up the potentially large Tiof oil discovery a decision was made to drill an additional well in the 2003 drilling programme. The Tiof West well was drilled to test the western extension of the Miocene channel system and was located approximately 8 kilometres from the Tiof-1 discovery well which was drilled near the structural crest. As such, the Tiof West well is considered to be a significant step out to evaluate the extent and hydrocarbon bearing potential of the Tiof Miocene channel system.

The Tiof West well was spudded on 8 December 2003 and was drilled to a total depth of 2,991 metres in water depth of 1,320 metres. The well intersected a total gross hydrocarbon column of 126 metres comprising an upper 4 metre gas interval overlying a 122 metre oil column above the confirmed oil water contact. The upper 4 metre gas interval is interpreted as an isolated gas sand within a larger gross oil column, as the oil column in Tiof West is structurally lower than the oil column in the Tiof-1 well. Of significance is the fact (reported by Woodside, 16 December) that the pressure data from the oil column in both Tiof-1 and Tiof West are likely to be in direct communication, indicating a common oil pressure gradient across the Tiof Field.

Based on the common oil pressure gradient in both wells, the total gross oil column for the Tiof Field is estimated to be 214 metres from the top of the oil column in Tiof-1 to the base of known oil in Tiof West. The Tiof Field has a relatively small gas cap as indicated by the 46 metre gross gas interval in the Tiof-1 well drilled near the structural crest.

Hardman's technical staff have undertaken preliminary mapping of the 3D and 2D seismic data over the Tiof-1 - Tiof West structure. The structural closure of the Tiof Field has a mapped area of approximtely 54 square kilometres. On the basis of this area, the gross oil column indicated from both wells and the initial reservoir data, Hardman has estimated a potential field size of between 300 to 400 million barrels recoverable (statistical mean estimate).

PounExploration Well: The Poun1 well was spudded on 16 November 2003 as the third well in the 2003 drilling programme. The well was drilled to test an interpreted Upper Cretaceous channel system within an independent structural closure. The Poun1 well was located 48 kilometres north of the Chinguetti Field and 27 kilometres northeast of the Tiof oil discovery. The well was drilled to a total depth of 3,285 metres in 902 metres water depth. Wireline logs showed that the well did not encounter significant hydrocarbons within the primary Cretaceous-aged target, although minor hydrocarbon shows were encountered in the Tertiary-aged sandstones which were a secondary shallower target. The well was then plugged and abandoned.

Pelican-1 Gas Discovery: The Pelican-1 well was spudded on 30 November 2003. Woodside managed the drilling of the well on behalf of the Block 7 operator Dana Petroleum plc. Hardman holds an 18% interest in Block 7 which may reduce to 16.2% if Woodside exercises an option to purchase 10% interest in the licence area following the drilling operation.

The Pelican-1 well was drilled to a total depth of 3,825 metres in 1,700 metres water depth. Evaluation of the wireline logs and RCI pressure data indicated that the Pelican-1 well intersected a gross gas column of approximately 370 metres and within the gross interval a number of gas bearing sands are present. Individual sands are generally thin with variable reservoir characteristics but occasionally are in the range of 5 to 10 metres thick with excellent reservoir quality.

The gas bearing sands are interpreted to be both Lower Tertiary (Palaeocene) and Upper Cretaceous in age and are therefore older and geologically distinct, compared to the Miocene aged sandstone systems that host the Chinguetti, Tiof and Banda discoveries located approximately 150 kilometres to the south.

The discovery of a large gas bearing interval in both Tertiary and Upper Cretaceous sands is very encouraging as it extends the Mauritania hydrocarbon bearing province very substantially to the north. Although oil was not identified in the sandstones, the well was located near the crest of a very large structure, which provides some optimism that oil may be found on the flanks of the structure or in deeper, as yet undrilled formations. Further drilling would be required to evaluate the oil potential of the Pelican discovery and a follow-up well may be considered for drilling in 2004.

Early Plans for 2004 Drilling Programme

Following the outstanding success of the 2003 drilling programme with four successful wells out of the five drilled, a significant increase in drilling activity is envisaged in 2004. At this early stage, discussions with the joint venture participants have indiciated a willingness to drill several exploration wells on Miocene channel sandstone prospects within the Chinguetti and Tiof oil discovery fairways and possibly a further south in the the Area A (Block 3) deep water area where additional Miocene channel systems have been identified. In addition, two appraisal wells are being considered on the Tiof discovery and possibly one appraisal well in the Banda Gas and Oil Field.

In the more outlying licence areas a firm exploration well is planned in PSC Block 2 and possibly one well in each of the Dana operated Blocks 1 and 7. Further details on the drilling programme will be provided in due course however the programme is expected to commence in the third quarter 2004 with as many as ten wells to be drilled in the year.


New ZealandUganda is a landlocked country bounded by Kenya to the north, the Democratic Republic of the Congo to the west and Tanzania and Rwanda to the south. Formerly a British colony, Uganda retained English as the official language when independence was granted in 1962. After a period of political unrest in the 1970s and early 1980s, democracy was restored and the country now enjoys stability.

Hardman is the Operator with a 50% interest in a Production Sharing Agreement ("PSA") over Block 2. The block covers an area of approximately 4,700 square kilometres over the northern part of Lake Albert in north-western Uganda (see location Plan Uganda Permit Block 2). The area is under-explored with only one well having been drilled on the shores of Lake Albert in Block 2 by Shell in 1938, which encountered oil shows. The presence of a thick sedimentary sequence in the graben, well-documented oil seeps along the edge of the lake and information from gravity and magnetic surveys provide encouraging indications of the area's petroleum potential. In 2002 the Block 3 joint venture, operated by Heritage Oil, drilled the Turaco-1 well to 2,487 metres and encountered good shows of both methane and higher order gases (C1 to C4) and also live oil shows, but mechanical difficulties during coring meant that no wireline logs were recorded.

The Lake Albert Seismic Survey commenced recording in September 2003 after the vessel "Victoria III" was transported overland and equipped with seismic recording instruments. The survey, totalling approximately 1,600 line kilometres of data, was conducted by Hardman in conjunction with the adjacent Block 3 parties. The seismic survey was successfully completed in November and processing of the data has recently been completed.

A detailed technical evaluation of the seismic data is currently in progress with early results indicating the presence of robust structural leads and prospects. On completion of this technical work Hardman will commence presentations of the project to companies which have expressed interest to farmin and fund the next phase of drilling one or more wells.



Hardman has a 55% interest in the PEP38215 exploration permit in the Great South Basin, New Zealand. The permit covers an area of 11,665 square kilometres (see Location Map PEP38215 Great South Basin New Zealand). Bounty Oil & Gas NL holds a 35% interest and is operator.

The Joint Venture intends to focus on the hydrocarbon potential of the base Tertiary/top Cretacious sediments within the Central Graben of the basin. Potential is indicated by the results from two offset wells; Toroa-1 in the north of the permit area, encountered 425 metres of oil and gas shows in the Upper Cretaceous; and Pakaha-1 located at the southern margin of the Central Graben which encountered good hydrocarbon shows.

Detailed mapping of reprocessed seismic by Hardman and its parties has confirmed the major structural trends in the area and identified a number of leads.

A 25% interest in the permit has been farmed out to Electro Silica plc in exchange for the cost of a 2,000 km seismic survey. Electro Silica can earn a further 50% interest by funding the drilling of an exploration well.

http://www.hdr.com.au/

xmortal

fyi there is a hardman thread on the traders board may be worth a look

will do... also will update more info once i get time. ta.

All relevant


YUKOS awaits bailiffs as deadline passes
Thu 8 July, 2004 08:46



By Dmitry Zhdannikov

MOSCOW (Reuters) - Russia's largest oil exporter YUKOS is waiting for the government to start selling off its assets after missing a deadline to pay $3.4 billion (1.8 billion pounds) in back taxes.

The deadline expired at midnight after talks with the authorities failed to resolve the issue which analysts warn could sap enthusiasm to invest in Russia and undermine economic growth.

Bailiffs can now arrive at any moment at the company's Moscow headquarters or its operations, which pump a fifth of Russia's crude oil.

"We have no fresh news. We are waiting," YUKOS spokesman Alexander Shadrin said.

The oil giant says it could collapse by the end of the year under a tax bill that totals nearly $7 billion for 2000 and 2001. Analysts say that could rise to $10 billion after audits of 2002 and 2003.

The firm's future to a large extent depends on whether main shareholder Mikhail Khodorkovsky, and other core owners who control YUKOS through holding firm Menatep, can reach a settlement with the Kremlin.

The politically ambitious Khodorkovsky is on trial for fraud and tax evasion and the charges against YUKOS are widely seen as part of a campaign against him by a Kremlin that tolerates little opposition.

Khodorkovsky's lawyer said on Wednesday that he had offered from his jail cell to give up control in return for the company's salvation but there was no word from officials.

"Khodorkovsky has the right to take a decision on behalf of all of us, and the (Kremlin) understands this perfectly well," Russian newspaper Vedomosti quoted a Menatep source as saying.

"They simply have no interest in these discussions. They don't have a united opinion of what to do with YUKOS now."

President Vladimir Putin pledged last month to try to prevent the firm's collapse, but legal blows have continued to rain down on YUKOS.

However, some analysts said bankruptcy looked a long way off.

"We believe the parties can still reach a compromise," Merrill Lynch said in a research note.

"Even if the government wanted to bankrupt YUKOS, a lack of experience with bankruptcy of this magnitude, unclear legislation and the fact the company has not exhausted all the legal means at its disposal ... indicate that YUKOS is unlikely to go bust," it added.

KHODORKOVSKY OFFER

A high-level YUKOS source said on Wednesday the company was in talks with officials on how to reach an amicable agreement and avoid bankruptcy.

But a YUKOS spokesman denied talks were going on and said the government had not responded to attempts to strike a deal.

"Unless the government gives us more time to pay back what we owe ... we will be, technically speaking, insolvent," said Hugo Erikssen, head of international information for YUKOS.

Many Russians may cheer the potential collapse of a company whose shareholders amassed huge fortunes in shady privatisations while most of the population was thrown into poverty after the Soviet Union collapsed.

But analysts say the selective bankruptcy of YUKOS could hurt everyone in a country banking on foreign investment to help double the size of the economy in this decade.

Thursday Closing Oil Prices Barrel Higher

For the first time in more than a month, oil prices have surged back above 40 dollars a barrel. Traders say prices shot higher after Homeland Security Secretary Tom Ridge held a news conference and warned that terrorists are looking to disrupt the November elections.

In New York, crude for August delivery jumped more than three percent, up a dollar and a quarter to 40 dollars, 33 cents a barrel. Crude futures are the highest they've been since before OPEC's announcement last month that it would boost oil production.

(Copyright 2004 by The Associated Press. All Rights Reserved.)

World oil prices soar
July 9, 2004 - 6:06AM

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World oil prices shot higher, taking New York crude above $US40, as the market reacted with shock to a White House warning that al-Qaeda is planning a major US attack.

New York's benchmark light sweet crude contract for delivery in August soared $US1.25 to close at $US40.33 a barrel, the first finish above $US40 since June 1.

Brent North Sea crude leapt $US1.16 to $US37.77.

Homeland Security Secretary Tom Ridge issued the terrorist warning, which shattered market nerves even after weekly government figures showed commercial crude oil, petrol and distillate inventories on the rise.

"Credible reporting" indicated al-Qaeda planned a large-scale attack in the United States, Ridge said, adding that security would be stepped up at Democratic and Republican national conventions.

Ridge said he had no precise knowledge about time, place or method of attack.

"The fundamentals suggest that oil prices should have come down at least a dollar," said Oppenheimer market analyst Fadel Gheit.

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"But Tom Ridge a couple of hours ago said that there is a high probability that there will be a terrorist attack during the Republican and Democratic conventions in Boston and New York in the next few weeks," he added.

"That scared the hell out of everybody."

The Democratic Party's national convention is to be held in Boston July 26-29, while President George W Bush's Republican Party is to hold its convention in New York August 30-September 2, ahead of the November 2 US presidential election.

The US Department of Energy said for the week to July 2 commercial stocks of crude oil rose by 100,000 barrels from the previous week to 305.0 million, petrol rose 1.0 million barrels to 206.1 million and distillate fuels - heating oil and diesel - were up 3.1 million at 114.0 million.

Exploration Start-Up Eyes Falkland Island Waters... And AIM Listing
Falkland Islands Holdings and partners Global Petroleum Limited and Hardman Resources have restructured their joint venture in the waters off the Falkland Islands. A new company, Falkland Oil & Gas Limited (FOGL), will spearhead the exploration campaign in the licences, which cover 33,700 sq km to the south and east of the Falkland Islands, an area geologically distinct from the North Falkland Basin which was the focus for oil exploration activity during 1996-98.

The shareholdings in FOGL will be RAB Special Situations Fund (a fund managed by AIM-listed hedge fund manager, RAB Capital) with 45.4 per cent, FIH 28.9 per cent and Global 25.7 per cent. FOGL will hold 77.5 per cent of the licences with Hardman holding the remaining 22.5 per cent. FOGLs share of the work programme will cost US$3.6 million and will be funded US$2.2 million by RAB, US$1.1 million by FIH and US$0.5 million by Global. Hardman will put up US$0.9 million of the seismic costs. The board of FOGL will comprise representatives of RAB, FIH and Global. The initial chairman will be John Armstrong, executive chairman of Global Petroleum.

The new exploration outfit, which plans to seek eventual admission to Londons Alternative Investment Market, will focus on the acquisition of a 2,300 km 2D seismic survey at an estimated cost of US$4.5 million. The acquisition of the new data follows the 2003 mapping of 4,340 km of purchased seismic data, which identified a number of leads in water depths of 400 to 1,850 metres with targets ranging from 200 million to 2.5 billion barrels of oil.

While no wells have been drilled in these areas, there have been successful tests in the adjacent Malvinas Basin to the west. The Calamar-1 well flowed 3,000 barrels of oil per day and the Salmon-2 well flowed 20 million cubic feet per day of gas. The wells produced from the Cretaceous Springhill Formation, which is expected to occur in the new licences.

These oil and gas flows offer support to the view that the Joint Ventures licences contain an active petroleum system within the 8,000 metres of Late Jurassic to Tertiary sedimentary section, the company said in a statement.

David Hudd, chairman of Falkland Islands Holdings, said: The creation of a new, fully funded oil exploration company that mirrors our minerals venture is an exciting development. FIH is well-placed to benefit, both directly and indirectly, from increased levels of activity in these sectors.

Meanwhile, Falkland Islands Holdings, which operates a range of businesses in the islands, has reported turnover of 11.1 million for the year ended March 31, 2004, slightly down on the prior year period of 11.4 million. Pre-tax profits slipped from 1.025 million in 2003 to 0.847 million in the year just gone. The dividend per share was up 4.5 per cent, however, at 5.75p.

The results were hit by increased shipping costs and a poor fishing season. However, the companys minerals business received encouragement from the results of an initial aeromagnetic survey and drilling could get under way this year.

Hudd commented: The potential from our oil and mineral licenses in the Falklands is real and we have significant mineral and oil exploration programmes currently under way. These developments give the board confidence for the future.

The Tiof Find Offshore Mauritania Emphasises Hardman Is Not A One Discovery Wonder
Hardman Resources, the Australian junior which is also quoted on Londons AIM market, continues, despite some occasional signs of stirring, to be a curious sleeper in the oil and gas sector. Okay, its most recent exploration well Poune, which tested a Upper Cretaceous structure on Production Sharing Contract (PSC) Area B, offshore Mauritania, was dry. But the well before that, Tiof, which was also offshore Mauritania and which tested a shallower Miocene structure, came up trumps.

This showed that Hardman is not, as it appears to be perceived by the market in London, a one discovery wonder that finds it difficult to raise the finance to match its ambitions. Its company making find with Chinguetti, on Area B offshore Mauritania is well advanced in its development. The Tiof discovery could mean reserves offshore Mauritania are much greater than originally thought. A third exploration well in the 2003 programmes offshore Mauritania - the Dana operated Pelican - is currently being drilled. Hardman has production in Australia, which provides enough flow to pay the bills and the wages. It also has some exciting prospects in Guyane in South America, Uganda, Gabon and New Zealand.

Chinguetti was first discovered in 2001. Reserves here have been put at 142 million barrels of oil recoverable; Hardman has a 21.6 per cent stake in the action. Production is expected by 2006 at the latest and is predicted to be at least 75,000 barrels of oil a day (bopd), which means Hardman will have 16,000 bopd for itself and that the company will immediately be punted into the top half dozen of the UK quoted mid-cap explorers and producers.

The cost of developing the field has been put at US$400 million, of which Hardmans share would be US$86 million. The company wants to raise this money off the balance sheet so there will be no dilution for shareholders. It is currently in negotiation with a commercial bank to raise US$75 million and the International Finance Corporation (IFC), which is part of the World Bank, to find another US$100 million. Asked on a scale of one to ten how confident he was that the US$100 million would be raised soon, Executive Director of Hardman, Scott Spencer, said, Ten.

Following Chinguetti, Hardman had another successful discovery with its Banda well, which is also offshore Mauritania. This find was three quarters a gas discovery, with reserves estimated at 3 trillion cubic feet. But there was also oil, with recoverable reserves put at 100 million barrels. Hardman holds 24.3 per cent of this licence. This will probably be developed as a gas field and this will take time. The oil element, however, means that, together with Chinguetti, Hardman has been able to book reserves to itself of over 50 million barrels of oil. Assuming the oil is worth US$5 a barrel in the ground then Hardman shares are worth more than 30p a share on what has been discovered so far;and this says nothing about other activities and prospects.

There is also Tiof. The first well struck oil in the shallow Miocene zone. Total reserves have been tentatively put at 200 million barrels, with Hardman holding 21.4 per cent of the action. In the normal way Hardman would think about drilling appraisal wells next year. However, the company is so excited about the size and possibilities of Tiof, it is about to drill another exploration well, called Tiof West, some 8 kilometres from Tiof-1. Sources, not Hardman it should be stressed, have talked about reserves of 650 million barrels. If this turns out to be the case then Hardmans shares should really wake up.



Hardman Resources Has Lots Of Positive News About Its Activities In Australia And Mauritania
The news flow from Aussie explorer, Hardman Resources, which is quoted on Londons Alternative Investment Market (AIM), as well as in Australia, is like a successful oil discovery - it seems to be spurting out in all directions.

The main story is the progress being made with Hardmans company making discoveries in the Chinguetti field, offshore Mauritania. According to the company's activities report for the third quarter ending September 30, 2003, the Chinguetti 4-5 appraisal and early development well intersected 38 metres of net oil bearing sandstones. Production testing of the high quality reservoir section has flowed oil at rates of up to 15,680 barrels of oil per day.

The preliminary development plan envisaged six production wells to achieve the initial peak field production rate of 75,000 bopd. This would require each well to produce at 12,500 bopd. However, the current well 4-5 being tested is a vertical well, which intersected only a part of the reservoir section, and production is limited by the surface test facilities. Some of the production wells to be tested later will be directionally drilled (inclined) and designed to intersect a greater proportion of the reservoir sands and therefore should be able to produce at even greater rates. Suffice it say, the initial production target of 75,000 barrels a day is comfortably attainable. Hardman has net interest of 21.6 per cent in the Chinguetti field.

So what happens now? To achieve first production by the end of 2005, the Chinguetti Development Plan includes the leasing of a Floating Production Storage and Off-Take Vessel (FPSO) for an eight to ten year period, the drilling of six production wells (possibly more), a gas injection well and water injection wells. The development plan envisages costs will be US$400 million, of which Hardman is expected to find US$86 million.

By the end of 2003 Hardman is hoping to have analysed the test data on Chinguetti 4-5, finalised the Chinguetti Development Plan, commenced the tendering process for facilities (FPSO) and completed the technical and legal due diligence work with the ANZ and IFC banking groups ahead of the project loan financing which Hardman hopes to finalise by February 2004, with the final investment decision (FID) in March 2004. The company also hopes before December 2003 to have joint venture agreement for the Declaration of Commerciality.

The 2P (proven and probable reserves) of Chinguetti have been put at 142 million recoverable, which means just over 30 million net to Hardman. If the initial production estimates turn out to be correct then it would mean 16,000 barrels a day net to Hardman which would immediately punt it in to the top half dozen of the small cap producers listed in London.

Chinguetti is just the first discovery. On the basis of only one well at Banda, which is close to Chinguetti on the same block, there are thought to be 100 million barrels of proven and probable reserves recoverable. This excludes the large gas reserve. Hardman holds 24.3 per cent of this licence.

There are also many more prospects to be looked at. In terms of the exploration drilling programme, on October 28, 2003 the company started the drilling of the first two wells on the Woodside operated Production Sharing Contract (PSC) Area B licence (Hardman 21.6 per cent). This first well is on the Tiof prospect, which is a Miocene aged sand prospect associated with a salt structure and is similar in type and size to the Chinguetti discovery. The second well is in Poune prospect, which is a test of a deeper Upper Cretaceous structure. However, this well will also test a shallower Miocene sand channel target.

Hardman is still hoping to drill a third exploration well on the Pelican prospect in the Dana Petroleum operated PSC Block 7 (Hardman 18 per cent), but this may depend on whether everything can be organised in time for this well to be included in the current schedule to drill the well in November 2003. Hardman has A$40 million cash in the bank with which to fund its share of this programme.

Back home in Australia, Hardman does have some small production from its Woodada gas field in the Perth Basin. This is around 4.5 million cubic feet of gas a day. There was some disappointment that the Leafcutter-1 well on the Woodada licence had to be plugged and abandoned. Ted Ellyard said: I was certainly disappointed. We always considered the Leafcutter to be a relatively high risk but cheap test of the up-dip potential in the Woodada area. However, the well had several zones of residual oil shows and we need fully to consider any follow-up potential before dismissing the play.

Any disappointment here, however, is probably compensated by the progress of the Jingemia discovery in the Perth Basin. The completion of extended production testing at Jingemia-2 and Jingemia-3 has seen oil flows at 2,000 barrels a day and confirmed original estimates of 5 million barrels a day recoverable. Hardman has 22.4 per cent of Jingemia. This not may sound much, but the point about the discovery is that it is onshore and therefore cheap to produce and easy to commercialise. On the basis of 448 barrels a day net to Hardman, and a West Texas Intermediate price of US$25 a barrel, with all-in costs around US$6 a barrel, then Hardman will gain US$3 million net cash flow on an annualised basis.

To develop larger reserves in Australia, Hardman announced an expansion into the Timor Sea with the purchase of adjoining permits AC/R1 (100 per cent equity) and AC/P26 (49.375 per cent equity). These cover the undeveloped Talbot field plus an option over another permit WA-316.

The attraction of these permits, besides giving the company the opportunity to develop beyond its existing holdings in the Perth Basin, is that purchase cost and current commitments are modest, and this allows the company to continue concentrating its funding on Mauritania. Its initial estimate of the fields recoverable reserves range from 4 million to 6 million barrels.

Hardman has other projects, which are longer term, in Guyane (French Guiana), New Zealand and Uganda. As things stand, on its own estimates, the company has company wide 2P reserves of 60 million barrels. This is made up of 50 million in Mauritania, plus 2.5 million of oil equivalent to Hardman in the Woodada gas field and Jingemia oil field, and the 4 to 6 million barrels In the Talbot field.

It obviously takes a long time and is expensive to develop deep-water offshore assets. But Hardman has created value through the drill bit which outweighs its current share price. Broker Canaccord has said: Despite its drilling success Hardman shares have performed weakly. We believe the market will begin to see considerable additional value in Hardman.

For investors who are prepared to take a punt on the Alternative Investment Market (AIM), Hardman Resources could be worth consideration, says David Stevenson, manager of the SVM UK Opportunities fund.

Hardman Resources is an oil exploration company listed on both AIM and Australian Stock Exchange. The company has projects in eight countries and a major presence in the emerging petroleum province offshore Mauritania, West Africa.

Hardman participated in successful exploration and appraisal drilling programmes in 2002 and 2003. "With substantial discoveries already and scope to add significantly to existing reserves the company is now in a transition phase from a small exploration company, and should achieve a much wider ownership and broker coverage," Mr Stevenson said. He expects a full UK listing in due course.

Found this on Hardman:

Fuel for thought
Investment extra, Daily Mail
8 July 2004

OUR months ago Australian explorer Hardman Resources pulled off a stunning deal. It sold a stake in two Mauritanian offshore blocks to gas giant BG for 72m - trebling its money in less than six months. It seemed almost too good to be true.




Hardman sniffed the deal when Italy's Agip decided to sell its 35% of the two blocks 50 miles off north west Africa. Already an investor in the blocks, it used its pre-emption rights and agreed a net* price of 18m.



Then another well flowed oil and it made two new discoveries when BG came looking for part of the action. Hardman obliged at a 54m profit.



Life was not always so sweet. Founder Alan Burns recalls that Hardman started up just in time for the 1987 share crash.



Based in Perth, Australia, Hardman is 10.5% owned by another Perth explorer, Woodside Petroleum. Woodside, itself one-third owned by Shell, is drilling the Mauritanian blocks that are shaping Hardman's fortunes.



With three million people, and wedged between the Spanish Sahara and Mali deserts, Mauritania was eking a living from iron ore and fishing. But Hardman and others reckoned that the big oil finds off Angola and Nigeria augured well for the waters to the north.



They were right. Their first well in 2001 struck the Chinguetti field, now hoped to contain 140m barrels. Hardman's share is 21.6%. First production from a floating drillship is due in 2006.



Chinguetti is modest by oil standards but the next find, Tiof, is thought to hold more than 300m barrels and the licence area has other structures. All seven wells drilled so far have found oil or gas.



These successes have boosted Hardman's shares to 75 1/2p and its market value to 485m, making it the fourth largest oil company in Australia. The gain has been enough for Burns to sell 150,000 of options* this week.



Director sales are a warning sign. But Hardman looks to have a good deal of exploration upside.



Finding oil means you must also find funds to get it out. Chinguetti could cost 330m. But after BG's sale and an April share placing* at 45 1/2p, Hardman has 90m cash, easily enough to pay its share.



Though it has just 24 staff, it is exploring new frontiers for oil off Guyana, Eritrea, New Zealand and the Falkland Islands. It could over-stretch, but it plans to bring in partners where needed. Burns says: 'When the crude


price fell, big oil gave up its land bank.' He is taking advantage.



Oil is a high-risk business that is full of hype and Hardman has yet to break into profit. Australian broker Aegis expects just above break even next year, then 24m net profits in 2006. Hardman's market value is already 20 times that. But further finds could drive it higher.



When the drillships arrive off Mauritania next month, with up to 12 wells in prospect, there should be more excitement.

This just released:

Hardman Resources Limited
09 July 2004




STOCK EXCHANGE / MEDIA RELEASE

RELEASE DATE: 9 July 2004

CONTACT: Kathryn Davies (08 9321 6881)

RE: EXERCISE OF OPTIONS

PAGES: 9

Please find following ASX Appendix 3B being an application for quotation of
additional securities in the Company pursuant to the exercise of 975,000 options
exercisable at $1.10 per share with an expiry date of 31 December 2004, and
540,000 options exercisable at $1.10 per share with an expiry date of 31
December 2006. The conversion of these securities raises A$1,666,500 additional
capital for the Company





KATHRYN DAVIES
COMPANY SECRETARY AND
CHIEF FINANCIAL OFFICER


Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B


New issue announcement,

application for quotation of additional securities

and agreement

Information or documents not available now must be given to ASX as soon as
available. Information and documents given to ASX become ASX's property and may
be made public.
Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/
2001, 11/3/2002.

Name of entity
HARDMAN RESOURCES LTD

ABN
98 009 210 235

We (the entity) give ASX the following information.


Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough
space).

1 Class of securities issued or to be issued Ordinary Shares.
------------------------

2 Number of securities issued or to be issued (if 1,515,000 shares.
known) or maximum number which may be issued ------------------------

3 Principal terms of the securities (eg, if options, Shares are as per
exercise price and expiry date; if partly paid existing ordinary shares
securities, the amount outstanding and due dates on issue.
for payment; if convertible securities, the
conversion price and dates for conversion) ------------------------

4 Do the securities rank equally in Yes.
all respects from the date of
allotment with an existing class
of quoted securities?
If the additional securities do
not rank equally, please state:
the date from which they do
the extent to which they
participate for the next
dividend, (in the case of a
trust, distribution) or interest
payment
the extent to which they do not
rank equally, other than in
relation to the next dividend,
distribution or interest
payment ------------------------

5 Issue price or consideration $1.10 per share.
------------------------

Purpose of the issue Exercise of 975,000 options with an expiry
date of 31 December 2004.
6 (If issued as consideration for Exercise of 540,000 options with an expiry
the acquisition of assets, date of 31December 2006.
clearly identify those assets) ------------------------------------------

7 Dates of entering securities 6 to 8 July 2004.
into uncertificated holdings or ------------------------------------------
despatch of certificates
------------- ----------------
Number Class
------------- ----------------
8 Number and class of all 647,856,507 Ordinary shares.
securities quoted on ASX ------------- ----------------
(including the securities in
clause 2 if applicable)
Number Class
------------- --------------------
9 Number and class of all securities not 4,651,588 Options exercisable
quoted on ASX (including the securities at $1.10 each,
in clause 2 if applicable) expiring 31 December
2004.
9,075,000 Options exercisable
------------- at $1.10 each,
expiring 31 December
2006.
--------------------

10 Dividend policy (in the case of a The Directors do not anticipate
trust, distribution policy) on the declaring a dividend in the current
increased capital (interests) financial year.
------------------------------------

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval required?

12 Is the issue renounceable or non-renounceable?

13 Ratio in which the securities will be offered

14 Class of securities to which the offer relates

15 Record date to determine entitlements

16 Will holdings on different registers (or subregisters) be aggregated for
calculating entitlements?

17 Policy for deciding entitlements in relation to fractions

18 Names of countries in which the entity has security holders who will not be
sent new issue documents
Note: Security holders must be told how their entitlements are to be dealt
with.
Cross reference: rule 7.7.

19 Closing date for receipt of acceptances or renunciations

20 Names of any underwriters

21 Amount of any underwriting fee or commission

22 Names of any brokers to the issue

23 Fee or commission payable to the broker to the issue

24 Amount of any handling fee payable to brokers who lodge acceptances or
renunciations on behalf of security holders

25 If the issue is contingent on security holders' approval, the date of the
meeting

26 Date entitlement and acceptance form and prospectus or Product Disclosure
Statement will be sent to persons entitled

27 If the entity has issued options, and the terms entitle option holders to
participate on exercise, the date on which notices will be sent to option
holders

28 Date rights trading will begin (if applicable)

29 Date rights trading will end (if applicable)

30 How do security holders sell their entitlements in full through a broker?

31 How do security holders sell part of their entitlements through a broker
and accept for the balance?

32 How do security holders dispose of their entitlements (except by sale
through a broker)?

33 Despatch date


Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of
securities

34 Type of securities
(tick one)
(a) Securities described in Part 1

(b) X All other securities

Example: restricted securities at the end of the escrowed period, partly
paid securities that become fully paid, employee incentive share
securities when restriction ends, securities issued on expiry or
conversion of convertible securities

Entities that have ticked box 34(a)


Additional securities forming a new class of securities

(If the additional securities do not form a new class, go to 43)

Tick to indicate you are providing the information or documents

35 If the securities are equity securities, the names of the 20 largest
holders of the additional securities, and the number and percentage of
additional securities held by those holders

36 If the securities are equity securities, a distribution schedule of the
additional securities setting out the number of holders in the categories
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over

37 A copy of any trust deed for the additional securities

(now go to 43)


Entities that have ticked box 34(b)

38 Number of securities for which quotation is 1,515,000.
sought --------------------------

39 Class of securities for which quotation is Ordinary.
sought --------------------------

40 Do the securities rank equally in all Yes.
respects from the date of allotment with an
existing class of quoted securities?
If the additional securities do not rank
equally, please state:
the date from which they do
the extent to which they participate for the
next dividend, (in the case of a trust,
distribution) or interest payment
the extent to which they do not rank equally,
other than in relation to the next dividend,
distribution or interest payment --------------------------

41 Reason for request for quotation now Issue of new ordinary shares
upon exercise of options.
Example: In the case of restricted
securities, end of restriction period
(if issued upon conversion of another
security, clearly identify that other
security) --------------------------
------------- ---------------
Number Class
------------- ---------------
42 Number and class of all securities quoted on 647,856,507 Ordinary.
ASX (including the securities in clause 38) ------------- ---------------

(now go to 43)

All entities


Fees

43 Payment method (tick one)
Cheque attached

Electronic payment made
Note: Payment may be made electronically if Appendix 3B is given to ASX
electronically at the same time.

X Periodic payment as agreed with the home branch has been arranged
Note: Arrangements can be made for employee incentive schemes that
involve frequent issues of securities.

Quotation agreement

1 Quotation of our additional securities is in ASX's absolute discretion. ASX
may quote the securities on any conditions it decides.

2 We warrant the following to ASX.

The issue of the securities to be quoted complies with the law and is not for an
illegal purpose.

There is no reason why those securities should not be granted quotation.

An offer of the securities for sale within 12 months after their issue will not
require disclosure under section 707(3) or section 1012C(6) of the Corporations
Act.

Note: An entity may need to obtain appropriate warranties from subscribers for
the securities in order to be able to give this warranty

Section 724 or section 1016E of the Corporations Act does not apply to any
applications received by us in relation to any securities to be quoted and that
no-one has any right to return any securities to be quoted under sections 737,
738 or 1016F of the Corporations Act at the time that we request that the
securities be quoted.

We warrant that if confirmation is required under section 1017F of the
Corporations Act in relation to the securities to be quoted, it has been
provided at the time that we request that the securities be quoted.

If we are a trust, we warrant that no person has the right to return the
securities to be quoted under section 1019B of the Corporations Act at the time
that we request that the securities be quoted.

3 We will indemnify ASX to the fullest extent permitted by law in respect of any
claim, action or expense arising from or connected with any breach of the
warranties in this agreement.

4 We give ASX the information and documents required by this form. If any
information or document not available now, will give it to ASX before quotation
of the securities begins. We acknowledge that ASX is relying on the information
and documents. We warrant that they are true and complete.

Sign here: Company Secretary Date: 9 July 2004


Print name: Kathryn Davies
== == == == ==




This information is provided by RNS
The company news service from the London Stock Exchange

Hardman Resources is featured in Today's Investors Chronicle.

Recommedation: BUY


also from www.thisismoney.com

Falkland's booty

AS in Iraq, there were those who said the Falklands War was over its oil reserves, only in that instance, it was potential reserves rather than actual. Now, with that war now history, Falkland Islands Holdings, the AIM-listed* company that is one of the islands biggest employers, is setting out to prove that potential.


It has formed a joint venture, Falkland Oil & Gas, with Global Petroleum of Australia and RAB Capital, to follow up on seismic data, gleaned last year, that has identified eight or nine potential offshore target fields, the ranging in potential from 2.5m to 200m barrels of oil.

moving up to 1.2%

Buy recommendation over the weekend in either Telegraph or Times. Forget which.

Almost everyone is recommending this share. We'll see produce soon. Amazing uptrend.

http://www.gtp.com.au/hardman/inewsfiles/5JulyMauritaniaJVApproves2004DrillingPlans.pdf