If the placement is confirmed- although irritable to present...

If the placement is confirmed- although irritable to present shareholders - is overall positive in my view.

The foremost concern for HDR at present in the risk of being strapped for cash and thus unable to fulfil its obligations in the next drilling campaign. To raise $40m would probably be enough to carry HDR through until late 2003 and early 2004. Hopefully by 2005 the Chinguetti field would have come on line for production. Then HDR would have a reliable source of cash flow and could consider debt financing (which is not available at present) by that time. It is unrealistic in my view that the placement could have been made at a premium to market price (whether this has been manipulated only time will tell).

If the placement is to institutional investors then again I think this would enhance HDR’s investment standing in the eyes of other institutional investors. I think HDR is desperately lacking in institutional support at the moment.

If Woodside takes just 20% of the new placement (10 m out of 40 m supposedly), this does not significantly lifts its holding in HDR. In any case, I think Woodside has been a cornerstone of stability for HDR. Without Woodside, HDR would be a very different creature to what it is now. Additional shares in HDR would further increase WPL’s exposure to Mauritania without unduly presenting a takeover threat to HDR. Think of it as a farm-out for HDR- cash for exposure. Cash is vital to HDR as it is only through material participation in drilling that Mauritania oil potential can be proven and therefore HDR’s value be reflected in its share price.

Also I have totally exhausted every cash resource I have at the moment on HDR so a placement offer to myself personally would be tempting but out of reach.

I also take heart from the open briefing Ted Ellyard's reference to the gas development at BANDA. If easy development equals 'cheap' development then I think there's every reason to believe that HDR is trading below its proven value WITHOUT anything priced in for future exploration success.