HDR hardman resources limited

Chinghetti v Huinga

  1. 1,317 Posts.
    Been trying to assess the relative merits of these two oil discoveries in order to allocate funds appropriately. Question is whether to lighten up on HDR, take the profits and put them into the Huinga JV partners. Looks to me like HDR might have gone as far as it is going to go for the time being. Step out well does not appear to have been as successful and/or excited as much interest as the original and there will be a brief lull before the next drill.
    On the other hand attention is turning to New Zealand with the announcement today of the imminent testing of Huinga. So with the recent strengthening of the shares of all the jv partners (in percentage terms as good or better than HDR), timing is now of the essence for a trader.
    While Chinghetti is an exciting discovery with the potential for more finds in the area, being offshore, development will take years, be expensive, and thus not return a cash flow for some time. Huinga on the other hand, if it flows as expected, and if it is as big as some say it is, (100 mbs plus?) cash will start rolling in to the JV partners almost immediately. And that cash can be used to drill more wells into what is developing as an interesting new oil province. Hmm decisions, decisions.
    The conclusion I come too is that there is more potential upside in the Huinga jv partners than HDR in the short term. But when to buy??? If Huinga 's clean up flow is successful then I'm in. Need to watch for an announcement in the next day or two that they have pulled the plug and the well is flowing. Hope I'm right. JBC
 
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