The present market reaction of HDR is indicative of the short...

The present market reaction of HDR is indicative of the short term removal of the Woodside takeover premium of HDR. The takeover premium on HDR should, however, be incorporated into the share price over the next two or so years as Chinguetti comes on to production and more drilling sucess is realised. HDR would never be too far off the radar of WPL over the medium term (I think they are licking their lips as we speak). I am happy with WPL's blocking stake in HDR as this should ensure that HDR would not fall too cheaply to an opportunistic bid by another oil major. At present, there is no incentive to WPL to make a move unless they are pushed. Shoud drilling success continue in Mauritania, surely someone out there would be running a ruler over HDR.

A revised estimate of the Chinguetti field would be coming in the next few months. Originally HDR's estimate was 180 million barrels. It appears that the appraisal drilling results would result in an upward revaluation of the this estimate (HDR in its announcement has said that the vertical relief of the oil bearing sands of 280 meters occurr in both the northern and southern parts of the field, and 3D data indicates that there are other oil bearing sands higher in the structure not proved by drilling). I can't come up with even an educated guess but it seems to me that the final reserve would probably more than 200m as the drilling results appear to far exceed HDR's original estimations.

At present I am happy with the risk/reward potential of the stock. Mr Market is looking a bit bewildered but it's only because he has no conviction, patience or ability to conduct independant thought.