For the interest of those not really up with HDR et al.
Potential. „h Very big reserves already established and a lot of understanding has been acquired of the geology and Seismics around offshore Mauritania. ie.exploration know how allowing accurate drilling on defined targets. „h 100% of Miocene targets to date have been successful. „h Enormous potential reserves remain incl. 30-40 salt domes in Mauritania province alone plus other exploration areas with similar structures. Eg. prospects in Mauritania blocks 1,2,7 and 8 as well as Gabon,Guyanne and Uganda. „h 2004 will have 10-11 additional wells (which are bound to find more reserves) as well as appraising Tiof and Banda. „h Tiof is huge and certain to presently be understated. It is on a different sand system to Chinguetti and Banda. More Tiof wells this year. „h Pelican is a huge gas find (370M) on top of a stucture ¡§hill¡¨ therefore step out wells may well find a huge oil basin under the gas. Another well this year therefore we may know this year. „h HDR has other GREAT exploration licences. Eg: Uganda ¡V Lake Albert. This is land drilling. Oil seeps along the lake shores. The Heritage well has already found oil- now being evaluated. Hardman is adjacent with 50% ownership. JV with Energy Africa. A well in 2005. Guyanne. The Matamata ¡§elephant¡¨ on good looking structures. Hardman 97.5%. HDR estimate there is maybe 1 billion barrels recoverable. A well planned for late 2004 or 2005. A farminee is assured. Also Gabon (1 or 2 wells late 2004 but HDR only 12.9%), Etritea, Timor and others. - Altogether valuable licences „h Excellent management along with Woodside technically. (WPL however tend to be conservative and to some extent secretive IMO)
Profitability „h Huge Chinguetti cash flow next year (2005) using FPSO vessels (floating,production, storage, offtake) Chinguetti has no financial liabilities. (?) „h Oil prices will probably remain high. „h British Gas (BG) now offers a second commercial commodity agenda. (Very large LNG development.) BG will take ALL the gas from Banda and probably elsewhere =additional profitability. BG involvement has altered the whole outlook of the province. An LNG shore facility is long term however. „h FPSO vessels allow global spot price deliveries by large volume tankers.
Financing „h Present cash in bank (thanks to ENI-Agip sale) will finance 2004 developments and then some. „h Hardman now likely to be popular with capital lenders. Eg ANZ bank, World Bank etc.
Share price „h Stock market re- rating by institutions. „h A certain take over candidate. „h Without getting carried away with euphoria ¡V the price got to $1.40 without much trouble recently therefore with all the good things coming another $1 doesn¡¦t seem unrealistic inside 12 months (???) (Hows that for scientific assessment!!!!) „h Hardman is now listed on the London stock market. „h Investment Analysts now giving very positive assessments eg Patersons, Intersuisse, Euroz, SSB Citigroup, Huntleys etc
Activities „h Fast track Chinguetti and Tiof for cash flow in the short term. This production cash flow will help fund the rest of the developments. The problem will be that other government bodies will not want to wait therefore other farmins must happen as well as further HDR funds may be needed.
Negatives „h Sovereign risk and political instability. (However the oil facilities offshore must assist with security.) A large LNG plant onshore is however another matter. „h Deep water wells are expensive and some water injection wells will need to be drilled later. „h For a junior HDR presently has a very large capitalisation. (Does this mean anything???)
Observation „h This sort of emerging situation has undoubtedly occurred before in the past therefore it is worth considering how the present/potential market capitalisation compares with other similar success stories.(There was a buy out a few years ago which astounded everyone ¡V unfortunately I cant recall the US companies ?) „h Note that it is not unreasonable to wonder if the Mauritania province et al may equal the resources of Angola. (Exon Mobil presently >11 billion BOE grosss. „h Maybe the province extends north into Morocco? (Now THAT would get the oil majors salivating!) „h After its recent writedowns Shell is now motivated to find more resources.
HDR Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
