Hi allPacey, davfitz and I sat next to each other at the AGM. We...

Hi all

Pacey, davfitz and I sat next to each other at the AGM. We have decided to split up the reporting in the interest of a faster delivery to HC

I will supply Simons answers to our questions while Pacey will follow up with an overall impression and Davfitz who recorded the proceedings will add his comments later.

Here are the questions and the answers are below each question.

HDR looks cheap to me!
Rgds to all

Angers

HARDMAN AGM QUESTIONS

MAURITANIA

1. Has Chinguetti production stabilised at 45k BOPD, or can we expect a further decrease?
Answer: As far as currently known it has stabilised.
a) Are the southern wells still flowing as expected? Answer: Yes
b) How much of an impact has the gas compressor failure on the FPSO had on production rates?
Answer: Little effect on flow rates but a large amount of gas being wasted as it is not possible to pump it back into Banda. This means they are flaring the gas on the FSPO and making the front of the ship extremely hot (melts your Wellington boots was the term used). Also bad for the environment.
c) When will the gas compressor be fixed?
Answer: depends on whether the failure was a manufacturing or a design problem. If manufacturing then back in operation in short term. If design then who knows.
d) Will the June exploration wells take second place to Chinguetti’s flow problems?
Answer: Simon certainly hopes so and will be pushing Woodside to delay the exploration wells for a few weeks to allow time to re- drill more production wells .
e) Are the down-hole problems at Chinguetti likely to have an effect on the Tiof development in any way? Answer: Totally different scenario, short answer is NO.

2. Woodside may face a probe on Mauritania. Are HDR likely to be involved and what can you tell us about the dispute/resolution?
Answer: All negotiations have been by Woodside only. They are dealing direct with the Mauritanian government so HDR not involved.
a) Is management aware of any complaints to HDR ASX or ASIC or other investigation regarding recent trading in HDR stock while market sensitive information remains undisclosed.
Answer: Simon skipped over this one and I didn’t think it worth spoiling a positive AGM by pushing it. Anyway you can guess the answer if pushed.

3. Does the consortium have gas agreements in place or are we still negotiating? I.e. the Flamant prospect
Answer: No! They are pushing Woodside to get them in place but until they know how much gas and where it is they won’t be able to negotiate terms. Simon agreed that it would have been reasonable to have an agreement in principal before investment but then that’s Woodside for you.

4. To what extent does Hardman maintain an independent technical review of Mauritania from that produced by Woodside? If there is an independent review - how often does Hardman actually disagree with Woodside in JV meetings?
Answer: They do have an independent technical team and all meetings are on the basis of consent. There are disagreements but HDR only have a 20% weighting in management decisions.

UGANDA

5. Will Mputa-2 results plus the testing results for the other 2 wells be sufficient to determine the likely size and commerciality of the onshore oil accumulation in Block 2 and if so what is the possible size and estimated flow rates (i.e. if Waraga and Mputa are connected) and when do you expect to be in a position to announce this?
Answer: If all wells connected then around 300 million barrels. They are entering the top of the target area even as we speak.

6. What is a reasonable "valuation" for recoverable reserves in Uganda i.e. US$5 in the ground or greater? And what would be your expectation regarding time to production.
Answer: Not clearly answered. Anything bigger than 30 mill barrels then commercial

7. Simon mentioned a new venture that was said to be very close to completion back in March. Can you comment further on that?
Answer: No! It involves a further 2 farm-ins but for commercial reasons he wouldn’t comment.


OTHER AREAS

8. Given the shallow drilling depths, but low API and production rates, what sized targets are HDR looking for in Surinam Uitkijk Block? When do you expect to start drilling?
Answer: Cost of wells is low in these areas and tie-back facilities to other installations are available. Therefore almost any oil will be commercial.

9. What is the current timescale for farm-outs in Guyane and Falklands and are drilling schedules already in place and if so how extensive are they?
Answer: Several bids are already in from large overseas oil interests and all look good. Simon pointed out that they wish to keep at least 40% equity and get a carried interest in all wells. The bids in so far would facilitate this. Faulklands was still a way off.
The farm in for Tanzania is subject to government approval. Is this a rubber stamping exercise and when may we expect this?
Answer: Yes only rubber stamping.

10. What type of waxy oil was found in Uganda? Is it representative of the area? How will it affect the cost of any commercial development?
Answer: Uganda waxy oil will require heating for maximum flow. However this is not seen as a problem. The oil is free of CO2 problems which is the important part.

11. Why don't HDR web-cast the AGM?
Answer: They probably will next time