INTERVIEW:Global Banks Buy Stakes In Australia's Hardman
By Matt Chambers Of DOW JONES NEWSWIRES
MELBOURNE (Dow Jones)--Despite investment banks creeping up on its share register, Mauritania oil explorer Hardman Resources Ltd. (HDR.AU) isn't looking over its shoulder.
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With Woodside Petroleum Ltd. (WPL.AU) late this week offloading a 10.2% blocking stake in its junior partner, Hardman's share register now includes the local broking unit of Goldman Sachs (GS) while Australian investment bank Macquarie Bank Ltd. (MBL.AU) has increased its holding.
"About 75% to 80% of the shares have remained in Australia, with other buyers from the U.K., the Far East and the U.S.," Hardman chief executive Simon Potter told Dow Jones Newswires Friday.
Hardman won't say what stake the banks have taken, but Chief Financial Officer Peter Thomas said there were about 40 buyers of the Woodside holding, with the biggest buyer taking about 1% of Hardman's total shares.
Deutsche Bank AG (DB), which bought Woodside's whole stake, on-sold the shares to institutional investors Thursday in about 90 minutes. The German bank kept some Hardman shares for itself, a broking source said.
Woodside earlier Thursday sold its Hardman shares for A$1.755 a share, a 7% discount to the then stock price. It raised A$118.3 million, and booked a A$66 million profit.
The sale of Woodside's stake, which was big enough to block compulsory acquisition under Australian takeover laws, means Hardman's share register is now wide open. Its biggest shareholder is Westpac Banking Corp.'s (WBK) BT Financial, with less than 5% and well shy of the 10.1% needed to thwart hostile bids.
Hardman's Thomas said the company hasn't seen any sign of takeover activity.
"There's the technical barrier that has been removed, but whether that results in anything is another thing," he told Dow Jones Newswires.
Hardman shares fell 4.2% Friday to A$1.83, valuing the company at about A$1.1 billion and making it the fifth largest petroleum group on the Australian Stock Exchange.
Investors Concerned About Tiof Project
Woodside said it sold the stake as it had completed its entry strategy in the Mauritania fields, which included helping Hardman fund commitments in the African country.
"Clearly we can fund our way now," Potter said.
Woodside and Hardman, both based in Perth, expect first production from the 100 million barrel-plus Chinguetti project in February.
But Hardman shares have fallen 26% in the past two months, paring big gains made as Chinguetti approached production and oil prices rose. Concerns about the Tiof project, and just how much oil can be recovered from the field that might contain up to one billion barrels, have put pressure on the stock.
Macquarie Bank analyst Andrew Blakely said he doesn't think Woodside's share sale is a poor reflection on Hardman.
"We consider this to represent a natural progression in its (Woodside's) strategy and not as a reflection of any change in attitude toward the prospectivity of Mauritania," said Blakely, who rates Hardman at outperform.
Still, the stock's fall Friday as most energy stocks rose, indicates many investors take a different view about Woodside's divestment.
"The timing of the sale may raise questions in investors mind because other joint venture partners have hinted of lower reserves," at Tiof, said Merrill Lynch analyst Cosimo Damiano.
Hardman's Potter said he is confident Tiof will be developed, despite Woodside saying last month the field needs further appraisal.
"I agree with Woodside that it needs more appraisal, it's just what form it takes, whether it's an early production system, or standard well tests which would tie up the rig for 60 to 90 days," Potter said.
Woodside plans a development decision on Tiof in the second quarter of next year, but Potter hopes it will happen sooner.
HDR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
