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Woodside Petroleum Ltd's possible exit from the share registry of Hardman Resources Ltd will leave it vulnerable to takeovers.

Hardman shares were placed in a trading halt as Woodside considered whether to sell its 10.24 per cent stake in the oil and gas explorer.

Woodside picked up an initial 11 per cent stake in Hardman in July 2001, paying $36.3 million, via its wholly owned subsidiary Woodside Mauritania Investments Pty Ltd.

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The two companies have the Chinguetti oil and gas joint venture project in Mauritania and Woodside has built up its stake in the project to around 47 per cent.

Fat Prophet senior resources analyst Gavin Wendt said Woodside's majority stake in the Mauritania acreage had rendered the shareholding in Hardman useless.

"At the time it was a strategic stake but now I don't think they need that Hardman stake anymore," he said.

"That stake has served its purpose."

But Mr Wendt the share sale, which could be made on market to an institution or to one company, would offer a potential suitor for Hardman a tremendous building block.

The most likely buyer would be UK group British Gas, which already holds 10.23 per cent of Chinguetti.

"If they sold that stake to someone like British Gas, which has been talked about as a possible suitor for Hardman, that would be significant because it is a sizeable stake," Mr Wendt said.

British Gas is believed to have considered takeover bid for Hardman as far back as April 2004.

But Woodside's divestment of the shares may disappoint investors who were banking on a full takeover bid from the major oil and gas producer for Hardman, Mr Wendt said.

Hardman requested its shares be placed in a trading halt until Monday or until an announcement was made.

Shares in Hardman last traded at $1.91 while Woodside shares slid 25 cents to $34.70.