re: reply from geos geosExcellent synopsis of the possible...

re: reply from geos geos

Excellent synopsis of the possible forward program and potentials. Add to the 944 mbo potential of the Chinguetti and Tiof fairway targets the minimum 500 mbo in Chinguetti and Tiof (105 + 375 as stated by HDR) and we are starting to talk a serious amount of oil. Then there's the gas in Banda, Chinguetti, Tiof and most likely some or all of this year's targets.

There's little doubt this is a very significant oil and gas province and that it is now going to happen. WPL selling part of Enfield is a good sign that its all systems go for Mauritania IMHO.

Current valuation is doable but it depends on a number of assumptions. A valuation on current reserves (Chinguetti, Tiof, and Banda gas) has to be over $2.00 IMHO (given Intersuisse values HDR's share of 120mbo at Chinguetti at 76 cents per share). Future valuations will depend on exploration success but even at a 50% success rate (less than what has been achieved overall so far) - this year's targets in the WPL/HDR/ROC JV areas could add 50-100mbo to HDR's reserves (conservatively) - another $1.40 if you use Intersuisse's figures. Then there's the Dana/HDR/ROC JV areas where 2 wells are planned and Pelican may be appraised, and then there's the possibility of gas developments with BG's involvement, and of course Guyane (Matamata at 2,000 mbo potential) and Uganda.

Now the cynics will howl "ramp", but please look at the record - I and other long-term HDR followers on this forum have consistently said HDR is an exceptional growth story and the sp has gone from 10 cents in 1999/2000 to $1.50 today, and market capitalisation has gone from $30m to over $800m today. We also said back in November/December that it was worth $1.40+ on last year's discoveries and now that commerciality and funding are wrapped up the market agrees. If you don't believe the potential of HDR then tell me another O&G company that has anything like the current reserves and exploration and development program?? You might come up with WPL - and I would agree there too - it has the potential to go to $25+ over the next few years on the back of sales to China and developments in Mauritania and GOM.

Cheers

H