CORPORATE FILE INTERVIEW Open Briefing. Hardman. MD on Banda Oil...

CORPORATE FILE INTERVIEW Open Briefing. Hardman. MD on Banda Oil & Gas Discovery

Record of interview :
corporatefile.com.au
Hardman Resources Limited recently announced that the C-4-3 Banda (Hardman 24.3 percent) exploration well, offshore Mauritania, had encountered oil and gas bearing sandstones over 133 metres. What is the nature of the structure you have drilled at Banda?


MD Ted Ellyard
The Banda Prospect is a structural / stratigraphic trap located 21 kilometres to the east of Chinguetti-1 within the same sand turbidite system as the oil reservoir at Chinguetti. The Banda trap is situated at the headwaters of the canyon sand system (eastern end) where it was first deposited on the deep ocean floor before heading west across the basin. The Chinguetti trap on the other hand, is a salt dome anticline that has “punched” upwards through the sand system and although it is a smaller sized hydrocarbon trap, it can still hold very significant volumes of oil.


corporatefile.com.au
The wireline logs indicate a gross gas column of 110 metres underlain by a 23 metre gross interval of oil bearing sandstones. Your discovery announcement stated the “Banda exploration well is a significant new oil and gas discovery…” Do you have any indications as to the potential size of the structure and how might it compare with the Chinguetti discovery well also offshore Mauritania?


MD Ted Ellyard
The Banda trap covers about four times the area compared to that of Chinguetti and is potentially much larger. Therefore, although we only have a 23 metre oil column it extends over a larger area potentially resulting in a similar sized oil accumulation as that of Chinguetti, which is currently estimated to be at least 100 million barrels recoverable. Overall, the Banda field is much bigger than Chinguetti but a large part of it is gas filled. The fact that Banda is located in water depth of only 300 metres means the potential to exploit the gas resource is much easier than in the deep water.


corporatefile.com.au
What were your pre-drill expectations for Banda?


MD Ted Ellyard
Hardman’s pre-drill estimate for Banda was a mean reserve of 290 million barrels recoverable for an Oil Only case. This was quite a conservative estimate and we encountered good quality sands in both the gas and oil pay sections of the well which results in a higher reserve figure. However, as I’ve said already, only part of the prospect contains oil, but this is sufficiently large enough to be of economic interest.


corporatefile.com.au
What's the plan for further appraisal of the Banda discovery?


MD Ted Ellyard
It is too early yet for any decisions by the Joint Venture. At this stage I am confident that we can justify drilling one or two appraisal wells on the Banda field as part of the 2003 drilling programme.


corporatefile.com.au
What implications does the Banda discovery have for future exploration activities offshore Mauritania?


MD Ted Ellyard
The fact that we have now discovered oil and gas in a stratigraphic trap unrelated to salt dome structures like Chinguetti is very encouraging as it upgrades the potential of the many similar stratigraphic sand targets which we have identified in the basin. It means that oil has migrated into the sand systems, not just into traps at the top of salt dome structures, opening up the whole deep water basin area as a potential target.

corporatefile.com.au
What are your immediate plans for exploration around Banda and Chinguetti and on your other Mauritanian permits?


MD Ted Ellyard
The drill ship is now moving back to the Chinguetti field to drill the next appraisal well. After the well is drilled a decision will be made to either test in this well or in the Chinguetti 4-2 well drilled earlier this year. The data obtained from the appraisal drilling will then be studied to finalise a development plan for a stand alone production facility at Chinguetti.


The Banda discovery will need to be studied in more detail before a decision is made to drill one or more appraisal wells. This will probably be undertaken as part of the 2003 drilling programme. In the other Mauritania blocks, we are undertaking five 3D seismic surveys this year which will define many drilling prospects and some of these are expected to be drilled next year.


corporatefile.com.au
What size prospects are indicated for Thon?


MD Ted Ellyard
The mean prospect size has been estimated at about 80 million barrels recoverable. Although this is a relatively small prospect size for the basin we consider it to be low risk and could potentially prove that oil occurs in significant volumes in Block 6 which is about 100 kilometres to the north of the Chinguetti discovery.


corporatefile.com.au
How much cash does Hardman have and what amount is allocated for your exploration programs?


MD Ted Ellyard
Currently we have about A$40 million cash and no debt. Hardman’s remaining expenditure commitments for the 2002 calendar year is about A$30 million. We therefore have sufficient cash reserves for our current drilling programmes.


corporatefile.com.au
Hardman Resources Limited recently announced results of the production tests for Chinguetti 4-2 located 2.5 kilometres from the original Chinguetti-1 discovery (Hardman 21.6 percent). The first production test from a 10 metre zone achieved a 1,560 BPOD flow but was constrained by sand influx. What have the flow rates and data revealed about the quality of the reservoir and how can you deal with sand influx from an engineering perspective?


MD Ted Ellyard
The test rate was restricted by sand influx into test equipment but the pressure data has provided definitive results that gives us confidence the sands could produce at several times the rate achieved (ie several thousand barrels per day). Sand influx is common in highly porous sands which often occur in deep water basins and can be easily controlled by using sand screens and gravel pack techniques in the production wells.


corporatefile.com.au
What's the likelihood of Chinguetti progressing to development and when could you bring it into production?


MD Ted Ellyard
We need to wait for the drilling results from the third Chinguetti well which will be drilled in the next few weeks. However, following the success of the Chinguetti 4-2 well which proved that the oil field extends over both the downthrown and upthrown sides of the structure, Hardman is confident that our earlier reserve estimate of 110 million barrels recoverable will be met. On this basis we expect that the Chinguetti field can be progressed through the development studies work to achieve first oil production by 2005.


corporatefile.com.au
Thank you Ted.





For previous Open Briefings by Hardman Resources visit www.corporatefile.com.au