The relation between Hardman and Woodside is interesting. Today...

The relation between Hardman and Woodside is interesting. Today I was looking back at HDRs 2004 entitlement prospectus and came across comments pg 93 about Hardman's obligations under the Woodside Co-operation agreement. Under the agreement HDR is required to "vote to support the Woodside entity as operator on all major venbure decisions including as to the scope of exploration operations, appraisal operations of development plans, and also says Hardman "has agreed not to issue any other securities... without first giving Woodside the right to participate in a way that enables Woodside to maintain its percentage interest..." So it appears that Hardman is LEGALLY required to support Woodside - effectively giving WPL in excess of 70% of the voting power in JV meetings.

When does the agreement expire? "When the Woodsidde agreement ceases to be of any further force of effect [I takle that to mean a sucessful takeover or if the agreement is extended] and until 1 DECEMBER 2005.

SO from 1 December it appears HDR will break free of WPLs shackles at least in a legal sense. What that means in a practical way I don't kno. No doubt WPL will continue calling the shots, but maybe at last the JV partners particularly HDR might be able to exercise a little more independence at least by way of releasing more info or putting its own interpretation on what's happening.

On another point, I'm wondering if the JV is considering putting Tiof off for several years at least while bringing on Tevet instead (or maybe Labeidna if proven commercial). I can think of some good reasons for this for all partners, including maximising the investment already made in Chinguetti (including spare FPSO capacity), much smaller capex, probably less opportunity for a takeover play on HDR if Tiof is held under a bit of a shadow while sp increases incrementally with other developments, (if Tevet tie-in) gas injection into Banda, ability to appraise Tiof more extensively over an extended period via iterative appraisals and additional technical work, and potential for new technologies to come along in the meantime that might enhance Tiof's commerciality. I think the US$700m+ investment in Chinguetti warrants optimisation over the (say) $100m or thereabouts spent to date in Tiof.

I think this might be a rational approach if, say, recent JV work at Chinguetti suggests to them a significant upgrade in reserves to say around 150-180mmbls or more and perhaps Tevet is on the higher side of ther 50-100mmbls it's been touted to hold.

I've mentioned before that HDRs presentation a few months ago showed (provisional) Tevet and Tiof timings and was subsequently removed in recent presentations. Maybe this is a reason why? Also depends on what the Exploration licence allows for but I can't believe the JV would have requested a rig with 240mmbls capacity if they are effectively limited to 75KBOPD from the EEA.

Also Voelte made a presentation I think last year when they seemed much more upbeat on Mauritanea, which anticipated a flow of 120KBOPD form Mauritanea by 2007/08. I know circumstances change but I suspect his credibility is on te line and if he's not so kean now on Tiof given current uncertainties then he may be looking for an early-ish development somewhere else to obtain the flowrate.

Just some idle thoughts...
Cheers KA