Hi snoball
HDR is undervalued still I believe .. or at the very least it will be progressively re-rated as Chinguetti then Tiof oil starts to flow. And the involvement of BG (and WPL for that matter) points to the gas resources being developed at some stage. So the long-term story remains very good. That means I plan to stay exposed to HDR's upside for some years via shares and super fund investments. Shorter-term how do you trade it??? Good question .. its always been tough. I generally trade HDR with CFDs .. but at present due to the coup and upcoming drilling results I am relatively under-weight CFDs compared to a few months back. Right now I'm taking the same approach as I did when I reduced my exposure during the coup with the attitude that I was happy to buy back at higher prices later. That is .. I have some CFD exposure but heaps of cash ready to buy big in response to either of two outcomes from Sotto. If its a duster and the price falls I will buy for the longer-term (shares and some CFDs), and if its a goer .. I'll just have to buy at higher prices (once the sp retreats from its peak after the initial response .. which it always does). I don't like to give price targets ... but by my best estimate (based on lots of experience and back-testing) are $2.20 or a little lower on a duster (any lower and its an absolute buy) and $2.80-$3.00 on success. One or two more successes this year will see a big run on HDR and a sp approaching $4. Longer-term provided POO stays bouyant I can see $5-$6 by mid-2006 once Chinguetti cash is flowing, Tiof and Tevet development is approved, and Banda and other gas reserves are being considered for development. Other price drivers will be a farm-out in Guyane and drilling of Matamata. To date (since 2000) SG, KL, abuman, xmagx, myself and others haven't been too far wrong with HDR .. although its been a longer path to riches than we may have hoped.
Looking good to me .. and as most valuations are based on POO of US$32 or thereabouts .. even a retreat from current lofty levels won't hurt HDR too badly IMHO.
Caveat: I hold heaps of HDR, I am a positive guy and a long-term believer in HDR's growth prospects .. so my expectations are upbeat. Do your own reserach/calcualtions everyone.
H
HDR
hardman resources limited
