one way to look at the bg sale, page-12

Having trouble posting at the moment - anyone else?? I will give this one more try:

Scarabeo, Blackscorpion et al

We have mixed feelings and so does the market. However, my greatest fear was that HDR would do a significant placemnent to say WPL and "sophisticated investors" in the UK as they have before - and at a discount. A likley price would have been around $1.15. I am happier that they have made this sale - with no dilution or downward pressure on the sp (so far). The only bad deals that HDR management have done have been the above mentioned placements at a discount. They may stilol do a capital raising but with the pressure off it is more likley that they will be able to organise a rights issue or at worst a placement at a good price.

You have to expect that HDR had some pressure on them fro say their potential financiers to shore up the balance sheet before being forwarded the US$100m they needed to borrow. They have responded to this and now also need to borrow less (as costs are reduced).

And you have to expect that they have other calls on their funds - and attractive ones most likley such as Gabon and Guyane as well as the Dana JV activities in blocks 1,7 and 8.

H