where i roc drilling update, page-13

re: offer value subi1

If there are no rival bids and the Scheme of Arrangement (SOA) between Hardman and Tullow gets a yes vote on 18th December, Hardman shareholders have an option to take $2.02/HDR share for all their HDR shares or part as 1 New Tullow share/0.22289 HDR share and the balance of their HDR shares at $2.02/HDR share.

The maximum percentage of HDR shares which can be converted to TLW is likely to be 40% because Tullow have placed a limit on the total New Tullow shares for this option and most HDR shareholders will accept the part scrip offer.

In London last night TLW closed at 4.12 GBP/share and the exchange rate was 2.51125 A$/GBP so TLW shares were worth A$4.12 x 2.51125 = A$10.35/share. At a scrip exchange of 1 New Tullow Share/0.22289 HDR share this valued the HDR shares exchanged at A$10.35 x 0.22289 = A$2.31/HDR share.

Accepting the part scrip offer was therefore worth 40% of A$2.31 + 60% of A$2.02 = A$2.136 last night. Assuming that on 11th January 2007 you can sell Tullow shares on the LSE for 4.12 GBP/TLW share and the exchange rate is 2.51125A$/GBP you average $2.136/HDR share. You might do better or you might do worse.

Buyers are paying up to $2.10/HDR share either hoping there will be a rival bid or, if he SOA proceeds, intending to take the part TLW scrip offer and expecting the TLW share price and exchange rate to give them a handsome profit in January.

Hope this helps

Complex