hdr assessed

I previously posted and now I have added to it and as the last efforts were such a mess in reproduction.(inexperienced I am) I tender this typing for those interested in Hardman's possible future.

Potential:
* Very big reserves already established. A lot of understanding has been acquired of the geology and seismics around offshore Mauritania. ie. exploration knowhow allowing accurate drilling on defined targets.
* 100% of Miocene targets to date successful.
*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 1,2,7,8 as well as Guyanne, Gabon and Uganda.
* 2004 will have 10-11 additional wells (which are bound to find more reserves) as well as appraising Tiof and Banda.
* Tiof oil is huge and certain to be presently underestimated. It is on a separate sand system to Chinguetti and Banda. More Tiof wells this year.
* Pelican is a very big gas find (370M) on top of a structure "hill" therefore step out wells may well find a huge oil basin under the gas. Another well this year so we may know this year.
*HDR has other GREAT exploration licences eg:
- Uganda/Lake Albert. This is land drilling. Oil seeps along the lake shores. Heritage has already found oil - being evaluated. Hardman adjacent with 50% JV with Energy Africa. A well in 2005.
- Guyanne. The Matamata "elephant" plus other very promising structures. HDR 97.5%. HDR estimate there may be 1 billion barrels recoverable. A well planned for late 2004 or 2005. A farminee seems assured. Another Mauritania?
- Also Gabo (1 or 2 wells late 2004 but HDR only 12.9% Etritea, Timor and others.
* Excellent management along with Woodside technically.

Profitability
* Large Chinguetti cash flow as from late next year using FPSO (floating production storage offtake) vessels.
Chinguetti has no financial liabilities (?)
* Oil prices will likely remain high.
*British Gas (BG) now offers a second commercial commodity agenda with LNG. BG will take all the gas from Banda and probably elsewhere= additional Hardman profitability. BG has altered the whole outlook of the province. An LNG terminal onshore would be a long term project however.
* Shell however has a design for a floating gas processing and storage vessel as an alternative to piping gas ashore. (Timor Sea proposal)
* FPSO crude oil vessels allow global spot sales & deliveries by large volume tankers.

Financing.
* The present cash in bank (Agip sale) will finance 2004 developments and then some. Presently no more share dilution.
* Hardman now likely to be popular with capital lenders eg. ANZ, World Bank etc.

Share Price.
* Stock market re-rating by institutions.
* HDR MUST be a take over candidate.
*The price got to over $1.40 recently so with all the good things happening an extra $1 doesn't seem unreasonable.(?)
* Hardman now listed in London.
* Major House analysts now giving very positive assessments.

Activities.
* Fast track Chinguetti and Tiof for cash flow in the short term. This production will help fund the rest of the development. Note! the respective governments of other licences will not want to wait therefore more farmins . Hdr will also need to raise further funds.

Negatives.
* Sovereign risk and political instability. (However offshore facilities improve security.) Any LNG plant onshore is another matter = longer term.
* Deep water wells are expensive and some water injection wells will be needed.
* For a junior, HDR presently has a very high capitalisation. (Does this mean anything????) Comments?

Observation.
Emerging situations of this sort have happened before therefore it is worth considering comparisons with those present/past capitalisations.
(There was a US take over some years ago(in Angola somewhere?) which price astounded everyone - cant recall details! Can anyone?)

* It is not unreasonable to wonder if the Mauritania ++ provinces may equal the resources of Angola (or Gulf of Mexico) (As one example Exon Mobil in Angola presently have greater than 11 billion barrels gross)
* One poster has said that a Western Geco sesmicologist has alleged that 2D seismics in the northern blocks 7 and (especially) 8 look exciting.
* Maybe the province extends north into Morocco?
(Now THAT would have the oil majors salivating!!!
* After the recent (and present) resource writedowns Shell might be highly motivated to find more resources.
* Assuming no take over (unlikely) another couple of decades of growth will take place before Hardman becomes another Woodside. Imposssible to guess.
We could envisage the next 4 years though.
Inside a Perth board room there could be a 5 year plan on the wall which we will never see.
So here is a blind guess from an unwashed with a vested interest:

CRYSTAL BALL STUFF
Consider a program of 10 wells per year for the next 4 years = 40 wells.
* Chinguetti 4 wells Production
* Tiof 8 wells Appraisal+Production
*Banda 4 wells Production
* Pelican 6 wells Appraisal
* Uganda 4 wells Exploration + Appraisal
* Guyanne(Mata) 8 wells Exploration + Appraisal
* Other 6 wells Exploration

What a dreamy way to pass the time! Just as well I'm retired.