Hmph,I have been doing a lot of thinking since yesterday and...

Hmph,

I have been doing a lot of thinking since yesterday and there are two roads from which to choose

1) HDR's Management are yellow livered and refused at the first major hurdle

2) They have in front of them a short term programme that says the company will not survive if it continues in its present form

I would like to explore the second of these. I agree with you that they have $270 million in the bank but I think much of that is already earmarked against spend. So their free cash to meet emergencies is much lower than that published figure. I think their free cash is no more that $60 million at a guess. To boost their income they need a cash injection. HDR must have had dates from WPL on when Banda, Tevet and Toif will start bringing in funds. I have not seen any information from WPL when they intend to start pumping oil from these. Have you?
First oil from Uganda will not be before 2009 according to latest information. Guyane I guess will be later say 2010.

So what is my point here. I am trying to envisage The Directors Meeting with facts and figures in front of them operating costs going out and cash coming in. They come to a conclusion to sell the business. Why? Because the figures in front of them say that they cannot make it work. They cannot keep this business viable to 2009 when they will have additional cash from Uganda. 30 months hence, but wait a moment why can they not count on additional money from Mauritania prior to this. I am assuming they have spoken to WPL about the plans WPL have for Mauritania for 2007 and 2008. Does anyone have dates for Tevet, Banda or Toif ? I have seen nothing on these that is solid

Once HDR are taken over it will be interesting to see if Mauritania becomes cash generative or maybe HDR know already that not much will happen there short term. WPL are not busting a gut there currently. The above is just my speculation on what might have occurred at The Board Meeting.

The action to sell must have been discussed by The Board and their decision has to be based on some understanding of the company's present and future standing

However if one is in the camp of Idea 1 then it shakes ones faith in the ethos of the motivation to succeed in business

regards