Oil Barrel

Hardman Is Well Financed After Succession Of Exploration Successes.

Hardman Resources the Aussie independent listed on London’s AIM market has had a very busy and successful first quarter 2002/2003 doing what an explorer is supposed to do - finding oil and gas. In the three months to September 30 in the Woodada gas field in Perth in Australia where the company already has some production, the Woodada 19 well tested gas at a stabilised rate of 3.2 million cubic feet per day. The pipeline application to connect Woodada 19 to the gathering system has been submitted to government and the well should be on production by December.

Hardman was also part of the consortium, which found oil with the Jingemia –1 well in the primary Dongara Sandstone in the Perth Basin. More wells are planned but it is thought that some 12 million barrels are recoverable. But it’s the company’s activities in West Africa that everyone has been looking out for because the stakes are high. In 2001 Hardman and its co-venturers discovered oil in Block 4 offshore Mauritania with its Chinguetti –1 well. This last summer, drilling has been appraisal of the discovery and some new exploration.

The Chinguetti Oil Field is a typical salt dome structure with a vertical relief at the target depth of over 300 metres. The primary oil zone is contained within Miocene- aged deep-water turbidite sandstones, which were deposited prior to the salt uplift. The structure is faulted with a downthrown southern flank (Chinguetti-1) and an upthrown northern flank, which was tested by Chinguetti 4-2, the first of the new wells. The Chinguetti 4-2 well encountered several oil-bearing sandstones in the primary objective over a gross pay interval of 94 metres. On the basis of wireline log data and four cores cut over the interval 2,385 to 2,428 metres, excellent to good quality reservoir sands are interpreted to occur within the oil pay interval.

The Chinguetti 4-4 appraisal well was drilled as the third well in the 2002 drilling programme, approximately 1.5 kilometres east of the Chinguetti-1 discovery. It intersected gross oil pay of 114 metres in the A sand reservoir and located oil-water contact in the southern downthrown part of the field. So on the southern downthrown block, taking Chinguetti-1 into account, there is total drilled column height of 280 metres. These results have provided Hardman with confidence that the project is commercially robust and that the field contains in excess of 110 million barrels of oil recoverable. Woodside, the Australian explorer and producer who is operator may upgrade this estimate.

The second well of the 2002 drilling programme C-4-3 Banda was declared a new oil and gas discovery after encountering a gross gas column of 110 metres underlain by a 23 metre gross interval of oil bearing sandstones. The fourth well in the programme C-6-1 Thon well was recently spudded in Block 6, approximately100 kilometres north of Chinguetti. Before drilling started Hardman and Woodside concluded a farm-in agreement with Petronas Carigali resulting in Hardman being free carried through the drilling whilst retaining 22.4 per cent of the equity.

New exploration on other Mauritania blocks in which Hardman has interests is planned. Projects in French Guyane, Gabon and the Falklands are also being advanced. But there is to be no more exploration in Chinguetti. The partners now want to move to full development of the field.

On the corporate side Hardman has sold its remaining shareholding in Arc Energy to realise a profit of approximately A$2.28 million. It also raised approximately A$ 25.7 million (£9 million) though a placement in Australia and London. According to Ted Ellyard, chief executive of Hardman the group has some A$60 million in cash and will go into 2003 with some A$40 million.He says first production from Chinguetti could be in late 2004 or early 2005. Hardman’s share would amount to 17,000 barrels a day that would make it one of the larger London quoted mid tier producers.