An Interesting Read

HOMEX - Perth

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CORPORATEFILE.COM.AU

Hardman Resources Limited recently announced that the C-4-3 Banda
(Hardman 24.3 percent) exploration well, offshore Mauritania, had
encountered oil and gas bearing sandstones over 133 metres. What is
the nature of the structure you have drilled at Banda?

MD TED ELLYARD

The Banda Prospect is a structural/stratigraphic trap located 21
kilometres to the east of Chinguetti-1 within the same sand turbidite
system as the oil reservoir at Chinguetti. The Banda trap is situated
at the headwaters of the canyon sand system (eastern end) where it
was first deposited on the deep ocean floor before heading west
across the basin. The Chinguetti trap on the other hand, is a salt
dome anticline that has "punched" upwards through the sand system and
although it is a smaller sized hydrocarbon trap, it can still hold
very significant volumes of oil.

CORPORATEFILE.COM.AU

The wireline logs indicate a gross gas column of 110 metres underlain
by a 23 metre gross interval of oil bearing sandstones. Your
discovery announcement stated the "Banda exploration well is a
significant new oil and gas discovery..." Do you have any indications
as to the potential size of the structure and how might it compare
with the Chinguetti discovery well also offshore Mauritania?

MD TED ELLYARD

The Banda trap covers about four times the area compared to that of
Chinguetti and is potentially much larger. Therefore, although we
only have a 23 metre oil column it extends over a larger area
potentially resulting in a similar sized oil accumulation as that of
Chinguetti, which is currently estimated to be at least 100 million
barrels recoverable. Overall, the Banda field is much bigger than
Chinguetti but a large part of it is gas filled. The fact that Banda
is located in water depth of only 300 metres means the potential to
exploit the gas resource is much easier than in the deep water.

CORPORATEFILE.COM.AU

What were your pre-drill expectations for Banda?

MD TED ELLYARD

Hardman's pre-drill estimate for Banda was a mean reserve of 290
million barrels recoverable for an Oil Only case. This was quite a
conservative estimate and we encountered good quality sands in both
the gas and oil pay sections of the well which results in a higher
reserve figure. However, as I've said already, only part of the
prospect contains oil, but this is sufficiently large enough to be of
economic interest.

CORPORATEFILE.COM.AU

What's the plan for further appraisal of the Banda discovery?

MD TED ELLYARD

It is too early yet for any decisions by the Joint Venture. At this
stage I am confident that we can justify drilling one or two
appraisal wells on the Banda field as part of the 2003 drilling
programme.

CORPORATEFILE.COM.AU

What implications does the Banda discovery have for future
exploration activities offshore Mauritania?

MD TED ELLYARD

The fact that we have now discovered oil and gas in a stratigraphic
trap unrelated to salt dome structures like Chinguetti is very
encouraging as it upgrades the potential of the many similar
stratigraphic sand targets which we have identified in the basin. It
means that oil has migrated into the sand systems, not just into
traps at the top of salt dome structures, opening up the whole deep
water basin area as a potential target.

CORPORATEFILE.COM.AU

What are your immediate plans for exploration around Banda and
Chinguetti and on your other Mauritanian permits?

MD TED ELLYARD

The drill ship is now moving back to the Chinguetti field to drill
the next appraisal well. After the well is drilled a decision will be
made to either test in this well or in the Chinguetti 4-2 well
drilled earlier this year. The data obtained from the appraisal
drilling will then be studied to finalise a development plan for a
stand alone production facility at Chinguetti.

The Banda discovery will need to be studied in more detail before a
decision is made to drill one or more appraisal wells. This will
probably be undertaken as part of the 2003 drilling programme. In the
other Mauritania blocks, we are undertaking five 3D seismic surveys
this year which will define many drilling prospects and some of these
are expected to be drilled next year.

CORPORATEFILE.COM.AU

What size prospects are indicated for Thon?

MD TED ELLYARD

The mean prospect size has been estimated at about 80 million barrels
recoverable. Although this is a relatively small prospect size for
the basin we consider it to be low risk and could potentially prove
that oil occurs in significant volumes in Block 6 which is about 100
kilometres to the north of the Chinguetti discovery.

CORPORATEFILE.COM.AU

How much cash does Hardman have and what amount is allocated for your
exploration programs?

MD TED ELLYARD

Currently we have about A$40 million cash and no debt. Hardman's
remaining expenditure commitments for the 2002 calendar year is about
A$30 million. We therefore have sufficient cash reserves for our
current drilling programmes.

CORPORATEFILE.COM.AU

Hardman Resources Limited recently announced results of the
production tests for Chinguetti 4-2 located 2.5 kilometres from the
original Chinguetti-1 discovery (Hardman 21.6 percent). The first
production test from a 10 metre zone achieved a 1,560 BPOD flow but
was constrained by sand influx. What have the flow rates and data
revealed about the quality of the reservoir and how can you deal with
sand influx from an engineering perspective?

MD TED ELLYARD

The test rate was restricted by sand influx into test equipment but
the pressure data has provided definitive results that gives us
confidence the sands could produce at several times the rate achieved
(ie several thousand barrels per day). Sand influx is common in
highly porous sands which often occur in deep water basins and can be
easily controlled by using sand screens and gravel pack techniques in
the production wells.

CORPORATEFILE.COM.AU

What's the likelihood of Chinguetti progressing to development and
when could you bring it into production?

MD TED ELLYARD

We need to wait for the drilling results from the third Chinguetti
well which will be drilled in the next few weeks. However, following
the success of the Chinguetti 4-2 well which proved that the oil
field extends over both the downthrown and upthrown sides of the
structure, Hardman is confident that our earlier reserve estimate of
110 million barrels recoverable will be met. On this basis we expect
that the Chinguetti field can be progressed through the development
studies work to achieve first oil production by 2005.

CORPORATEFILE.COM.AU

Thank you Ted.

For previous Open Briefings by Hardman Resources