Hi Turlet and this one from ABN Amro yesterday with a $1.90...

Hi Turlet and this one from ABN Amro yesterday with a $1.90 target ???? Brokers must have had lunch together at the rowing club.

Cheers Hoot

Stock specifics

Hardman Resources -

From our London desk. Do not underestimate how well this company and others with exposure to West Africa/ Mauritania are being promoted in the London market. Any slow down in the drilling campaign will be taken as buying opportunities if the share price reacts negatively, but make no mistake this stock should definitely have a home in every portfolio.

Main points arising from report

It remains our view that investors are being presented with a more reasonable entry price in Hardman, as we consider Mauritanian exploration potential over the long term to be a convincing reason to invest in the stock.. Of the locally listed participants, Hardman continues to be the most highly leveraged to success in Mauritania. Although not confirmed, exploration is expected to recommence in 2Q05. The following potential prospects offer Hardman 15-23% share-price leverage:

Bogue-1 (HDR 24.3%, A$0.38 per share mean potential at 300mmbbl); and Sotto-1 (HDR 24.3%, A$0.25 per share mean potential at 200mmbbl).

Profit down by 31% in FY04

We have adjusted our financial forecasts based on the results contained within today's report. We also increase our Chinguetti development capex forecast by US$25m to US$625m, in line with the operator's (Woodside) guidance. These changes reduce our net profit forecasts by A$0.5m (31%) for FY05, by A$0.8m (17%) for FY06 and by A$1.6m (3%) for FY07.

Valuation and Target price unchanged

The changes we made to our Hardman financial model had no effect on our DCF value for the company's shares (A$1.76). The stock is trading at a discount to our valuation, based on our long-term pricing assumptions (WTI oil price of US$28/bbl at A$1=US$0.67). Our forecast changes for Hardman have not affected our target price (A$1.90). The stock is trading at a discount to its historical mean P/DCF valuation multiple.

Warrants
HDRIZU $1.50 Jan 06 Delta 73