+ + discusions about the future are more interesti, page-21

re: hdr- want my view sailorgirl?
Bit of history here. I bought HDR back last year, at 70 cents. Felt proud of myself when I cashed in a 10% profit after about a day. I dont hold HDR

Kelvinb wrote ...

"Is it a $1b + Company in its current form, without revenue? No"

They do have reserves and exploration acreage to go with it. Reserves are what oil companies live or die on.

"Is it relying on capital from sale of assets and capital raising to survive? Yes"

Both CNOC and their Indian equivalent have $1bn/year to go shopping for fields with.

"Are some of its fortunes tied to the politically 'stability' of Mauritania? Yes, and the events of the last week show you how elastic the share price can be regarding this"

My copy of Luttwak's Coup d'Etat has gone missing, but from what I read, it looked much more like a breakup of potential coup plotters than a coup itself.

In any case, the share price fell from $2.40 to it's current $2-$2.10 ... not a huge fall.

"Can it survive as an independant oiler and bring these valuable discoveries on-line themselves? No. They are cash poor, asset rich. Do you know any banks in the world that'll lend you money without an income. "

Huh ? ANZ Bank just lent Hardman the money to buy AGIP out. A story I heard was that the trigger for the big rise in early '04 was that the ANZ due-diligence valuation of Hardman leaked out.

Banks will certainly project-finance oil projects, if you can show the stuff is there and you can get it to a market at a profit.

"Should you at least canvass some possiblity of failure in the upcoming drilling program? Probably a prudent move"

If you dump the assumption of US$20 oil in 2007-9 and use US$35 instead, then the NPV for Mauritania oil increases a lot. Well and truly enough to justify billion-dollar valuations, in fact.

Part of the problem oilers have is that chunks of the market still think oil is worth US$20, or at least will be next year.

"If the WPL/HDR Juggernaut find no oil or gas this time round, then the market ain't going to be as kind as you, and $1.40 may be where it settles. It's no coincidence that companies like WPL are setting the bar low when they buy shares @$1.10- they're being realistic, not cheap. "

Bit of both in my book.

Ian Whitchurch