HDR hardman resources limited

Hardman Resources: Chairman AGM Q&A Session 24/11/05 21:48:00...

  1. 231 Posts.
    Hardman Resources: Chairman AGM Q&A Session 24/11/05 21:48:00

    Edited Press Release

    LONDON (Dow Jones)--Hardman Resources Chairman Alan Burns at the annual
    general meeting held Thursday had a question and answer session that follows:
    Q When Chinguetti comes on stream in 2006, will there be dividends paid to
    shareholders?
    A We do not expect to pay dividends in the foreseeable future. We aim to
    provide our shareholders with capital growth rather than income, in line with
    most E & P companies.
    Q Will there be any further capital raisings or dilution of Hardman shares?
    A There are no current plans for raising additional equity; any future
    requirements will depend on the capital requirements of the business and the
    investment opportunities available to us in the future.
    QIs the Company intending to hedge any of its future oil from Chinguetti?
    A We do expect to arrange some hedging of oil price realisations.
    Indeed, it is a requirement of our Chinguetti project finance facility that we
    have some hedging in place as utilisation of the facility increases. Generally
    we will not seek to remove oil price exposure from equity investors, subject to
    appropriate hedging to underpin our investment programme and the availability of
    the debt facility. We will report the hedging arrangements we enter into, in
    order to keep shareholders informed.
    Q The flow of information from the 2005 drilling campaign seems to be very
    minimal. Does the Company intend to keep this up in the future?
    A We constantly keep our disclosure practices under review. The recent
    quarterly report for the period ended 30 September 2005 gave very full
    information about the exploration programme. There are, of course, some
    constraints within our joint venture agreements over what we can disclose. We
    will continue to provide shareholders with information about the drilling
    programme including the prospects to be drilled as they are agreed.
    Q Why has the Company decided to drill Guyane alone?
    A We have not determined to drill this alone. We are actively looking at
    farmouts but we have to choose when it is the best time to do so. We are
    currently acquiring seismic data over the Guyane acreage to define the best
    prospect to drill. We are planning the operation as if we would drill the
    prospect alone.
    Q Short term incentive payments are a farce. Why should an officer be paid a
    bonus for doing what they are already remunerated for?
    A We believe that short term incentive payments based on achieving measurable
    performance targets are an integral part of the total annual reward package and
    are recognised industry practice
    Q Can the Company and Mr Potter keep the shareholders more informed than
    recently when only large institutional holders are advised of inner workings of
    the Company?
    A The premise of this question is incorrect. The presentations we provide to
    institutional shareholders are made available on the Company's website
    concurrently with those presentations. We treat all shareholders equally in
    terms to access to new information.
    Q Are we subservient to Woodside?
    A No. We make our own decisions. In the joint venture arrangements the
    operator and the company with the largest equity stake obviously has a
    considerable influence on outcomes but all joint venturers have a vote.
    Q I have heard nothing on the court case with Woodside. Is the Company obliged
    to keep shareholders informed?
    A There have been no material developments in the dispute since the
    proceedings commenced. Pleadings have been filed by the parties. There is some
    prospect that the disputed issues will be mediated between all parties before
    the dispute goes to trial. If the dispute is not resoved by mediation then it
    is unlikely the matter would go to trial before late 2006.
    Q Why was Ted Ellyard paid $1,050,000?
    A Mr Ellyard was paid in accordance with his contract when he retired due to
    ill health as verified by his medical advisors
    Q What are the bonus payment criteria for the new CEO with regard to share
    market performance?
    A There are various elements of the CEO's remuneration package, the value of
    which are linked to share market performance. These are set out on pages 45 and
    46 of the Annual Report.
    Q Why is Mr Burns now shown as an independent director and last year he was
    not?
    A In March 2003 the ASX Corporate Governance Council issued its ten Principles
    of Good Corporate Governance and Best Practice Recommendations. The ASX Listing
    Rules were amended at that time to require companies to provide a statement in
    their annual report disclosing the extent to which they followed these best
    practice recommendations in the reporting period. In the Hardman 2004 annual
    report Mr Burns was described as being non-independent. This arose out of a
    mistaken belief that a tenure of ten years or more as a director automatically
    made him non-independent. In the course of preparation of the 2005 annual
    report, Hardman's General Counsel queried the status of the Chairman as a
    non-independent director. The issue was raised at an Audit Committee meeting and
    it was agreed that the matter be referred to the company's auditors,
    PricewaterhouseCoopers for their opinion. PricewaterhouseCoopers considered the
    matter including the detailed definition of independence set out in the best
    practice guidelines. Consequently, they concluded that Mr Burns was independent
    and so advised the Audit Committee who in turn advised the Hardman Board.
    Q Are there any plans to increase the size of
    the Board?
    A: Yes. Our objective is to recruit at least two new independent non
    executive directors within the next six months. We are looking to appoint
    individuals who have experience serving on a public company board and who have a
    background in or at least a working knowledge of the upstream sector of the oil
    industry. This search is being actively pursued.
    Q There is a large increase in employee related expenses, why?
    A Employee related expenses increased from $2 million in 2003/4 to $10 million
    in 2004/5, mainly due to a number of non-recurring charges. These include
    retirement benefits of $2million, termination payments of $1.5 million and a one
    off bonus of $2.5million amongst all staff in respect of the company's
    exceptional result in 2004. The remainder of the increase reflected somewhat
    higher staff numbers commensurate with the enlarged operating capacity of the
    company and its existing and planned growth.
    Q Has the Woodside litigation impacted on the joint venture relationship?
    A1 No
    Q Does Hardman have any M & A intentions?
    A We are always looking for value adding business opportunities within the
    international oil and gas sector. We should remember that Hardman was one of the
    founders of Dana and emerged profitably from that transaction. Also Hardman
    purchased a sizable stake in Arc Energy quite some years ago and sold that at a
    profit. With our enlarged capacity we constantly look at bigger deals
    Q Why are Mr Scott Spencer and Mr Alan Burns entitled to retirement benefits?
    A1 When service agreements were first entered Bob Carroll into between
    the Company and each of Messrs Burns, Ellyard and Spencer, provision was made
    for the payment of retirement benefits where retirement was effected after a
    relevant period of qualifying service. When those service agreements were
    extended with effect from Jan. 1, 2004 the retirement benefit provisions were
    carried forward. Since then the Board has adopted a policy whereby retirement
    benefits will not be paid to future non-executive directors. Mr Raven and I do
    not have any retirement benefits available to us under the terms of our
    appointments.
    Q Do we have any weather risks in Mauritania such as hurricanes or
    cyclones?
    A No, If you look at the slides, Mauritania is outside the hurricane or
    tropical cyclone belt. There are also few thunderstorms or waterspouts and no
    icebergs.


 
watchlist Created with Sketch. Add HDR (ASX) to my watchlist

Currently unlisted public company.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.