any thoughts, page-3

yaks

Up or down!!!! Seriously - the only thing in the way of a slow and steady rise into this year's drilling campaign is the rights issue shares. When they come onto the market there may be some selling - but given that its now patently obvious to most investors and institutions that HDR has enormous growth potential and that offshore Mauritania is going to be a major new oil and gas region, I would not expect a significant sell down.

There's also still some good news items that may also keep the market interested in the months before drilling and of course further takeover speculation is always likely. These include:

1) The FID - expected within a month or so. This could ensure more institutional interest.

2) Results of Heritage's Turaco-2 well in Uganda - a good result as anticipated could lead to a farm-in to HDR's ajoining block (50%). Potential is large.

3) A farm-in to Guyane by a major (and possibly WPL)

4) Final decisions on drilling targets for 2004 - expected by June

5) A further farm-in by BG Group in the Dana/HDR/ROC blocks (eg Pelican gas). An announcement about the JV's intentions regarding a gas development.

H