I think cpecan1 put togother a very strong argument against...

I think cpecan1 put togother a very strong argument against selling. An excellent post that did not get the attention it deserved.

Subject HDR - Research FACTS for followers ( 1 reads - 2 replies )
Posted 06/11/02 15:25
Member cpecan1

--------------------------------------------------------------------------------
Well this years painfull (due to market conditions) drilling campagn in Mauritania is finally over and it's worth re-capping on what new information we have learned with plans for the comoing year;
1) 3 out of 4 drills in Mauritania finding commercial oil/Gas
2) Commercial viability of Chinguetti confirmed as a "stand-alone" production field with a likely increase in estimate of recoverable reserves yet to be fully calculated and disclosed to market.
3) Quality of Chinguetti sands confirmed as good to excellent which is characteristic of clastic Turbidite sand reservoirs. This means less production wells, which means less start-up production costs which means Chinguetti is more commercially viable.
4) Banda confirmed as a new "oil/Gas discovery" with "possible appraisal drilling next year using a semi-submersible drilling rig." Appraisal drilling of Banda to prove up possible similar reserves as Chinguetti 2001/2002 estimates i.e. 100-million+ bbls + GAS.
4) HDR decision to farmout THON interest to Petronas shown to be prudent, HDR free-carried through the well costing $0.00 to HDR
5) In the fullness of time 70c share issue by Hardman to raise funds has been proven to be prudent and correct in difficult market environment.
6) HDR cashed up at what I think is $60+ million ready to fund next years expanded drilling programme in Mauritania and progress seismic elsewhere to attract farmin and free-carried wildcat drill-interests i.e. Guyane, Gabon.
7) HDR expand Woodada reserves with success of Woodada-19. Current gas reserves forcast to add around 7-million in cashflow/year. This is likely to increase as further production wells are added (using HDR Logan drill-rig which can drill to Woodada Gas reservoir depth) and further Gas sales made which HDR have named as a priority.
8) Jingemia looking to be a "great success" and has already confirmed 33m of high-quality oil bearing sand as a single column.
9) Exciting drill prospects up and coming in January with the drilling of Twin Lions in TP15, estimated at 360-MBBLs with HDR having a 30% interest after farmin out some costs to NWE. This follows the recent discovery at Cliff Head-1 which targeted the same geological play as Twin Lions will target some 4km away.
9) HDR currently have NO DEBT although HDR talks with Financiers have been positive in terms of gaining funding for long term developments. Some sort of long-dated bank note IMHO to fund Chinguetti production and an expanded exploration programme will be sought.
10) HDR have significantly increased their chances of survival from takeover predators to further develop their interests for at least 1-year by contractual agreement with WPL who have agreed not to increase their interest in HDR by more than 20% in that period with the current stake of >10% being an effective block-vote to other predators.
11) Dana petroleum has aggressively taken decisions to accelerate their Mauritani exploration programme; They are currently shooting a large 3D seismic in Block-1 using PGS's "Ramform Victory" rig with data processing being done on board to allow them to "accelerate availability of the seismic data for detailed interpretation." IMHO they are doing this to tie into their decision required soon on block-7. A decision whether to drill the first Wildcat well in that block is required before the end of 2002;

At the time of Chinguetti-1 Wildcat drilling HDR was an oil-speccy with the associated risk profile. With this years appraisal drilling of Chinguetti and further success in the Banda wildcat we are seeing a transformation in this status. If HDR holders could have hoped for anything (apart from getting rich quickly) before the start of this years drilling campaign it was the proving up of a minimum commercially viable 100-million bbls for Chinguetti and confirmation of reservoir quality, that is exactly what they have achieved and more-so what looks likely as increased Chinguetti recoverable reserve estimates.

The above are FACTS and can be easily confirmed with research easily at hand over the Internet. On the balance IMHO there are many more reasons to HOLD HDR than sell.

Regards
Hold HDR