half yearly report out now, page-19

re: half yearly report out now/arttse FRom ABN Amro this morning . They say its cheap and undervalued we allready knew that $$$$$

HDR – 1H05 Result Reported….

Investment view - we continue to view Hardman as trading on the cheap side of fair value given the potential of Mauritanian exploration over the medium term and retain our Add recommendation. The company’s level of exploration success in Mauritania will probably have most influence on the company’s share price over the next six months. We view Hardman as providing the most leverage to exploration of any of the stocks we cover. Our analysis suggests that even without further exploration success, Hardman’s production and earnings will grow significantly over FY06-09.

Result below pcp - Hardman reported an adjusted post-tax loss of A$7.3m in FY04, which was below pcp (A$4.0m loss) and above our forecast (A$12m loss). A post-tax exceptional net loss of A$8.8m, resulting mainly from the write-off of unsuccessful exploration in Mauritania (A$10.0m), reduced the reported post-tax loss to A$16.1m. No final dividend will be paid as expected.

Key results drivers – Higher foreign exchange losses partly offset by an income tax benefit were the key profit drivers.

Additional Details

Mauritania exploration expected to commence May – the operator of the key offshore Mauritanian permits (Woodside) has budgeted for six wells in Mauritania in FY05. Although timing has yet to be confirmed, we expect drilling to commence in May. We value the Bogue and Sotto prospects, which were not drilled in the 2004 exploration program, at A$0.38 and A$0.25 per share respectively (based on mean oil resource potential of 200-300mmbbl).

Tiof results positive – Woodside has booked a contingent resource of 287mmbbl (gross) for Tiof, although lower than expectations the estimate is based on results prior to recent positive flow testing. We continue to model 329mmbbl (gross) recoverable reserves, with first oil production expected in mid-08.