HDR hardman resources limited

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  1. 161 Posts.
    STOCK EXCHANGE / MEDIA RELEASE
    RELEASE DATE: 31 March 2004
    CONTACT: Kathryn Davies (08 9321 6881)
    RE: SHARE PLACEMENT AND ENTITLEMENT ISSUE
    The Directors of Hardman Resources Ltd (“Hardman” or “the Company”) are pleased to
    advise of a Placement of 72,000,000 ordinary shares in the Company at A$1.10 (£0.455) per
    share and a non-renounceable Shareholders’ Entitlement Issue to all ordinary shareholders
    registered as at 5.00pm AWST (10.00am GMT) on 14 April 2004 (“Record Date”).
    Placement
    The Placement is with Australian and European (principally UK) institutional investors for
    72,000,000 Placement Shares, at A$1.10 (£0.455) per share to raise A$79,200,000
    (£32,760,000), before expenses. The Placement has been managed by Macquarie Equity
    Capital Markets Limited and co-managed by Euroz Securities Limited in Australia, and
    managed by Oriel Securities Limited and co-managed by Collins Stewart in the United
    Kingdom.
    Entitlement Issue
    The Entitlement Issue is non-renounceable and is offered to existing shareholders on the basis
    of one new share for every six shares held as at the Record Date at A$1.10 (£0.455) per share
    to raise up to A$88,386,838 (£36,560,010) before expenses.
    Woodside Mauritania Investments Pty Ltd has undertaken that it will participate in the
    Placement and that it will take up its entitlement in the Entitlement Issue in order to maintain
    its percentage holding in the Company.
    Company Background
    Since the first oil discovery in May 2001 in offshore Mauritania (Chinguetti-1), Hardman has
    participated in successful exploration and appraisal drilling programmes in both 2002 and
    2003 which have led to the Chinguetti Oil Field being declared commercial in January 2004,
    and the discoveries at Banda (principally gas), Tiof (principally oil) and Pelican (gas).
    Industry analysts are increasingly viewing offshore Mauritania as a new West African
    petroleum province, with the boundaries not yet established.
    Ground Floor, 5 Ord Street, West Perth PO Box 869, West Perth
    Western Australia 6872
    Tel: +61 8 9321 6881 Fax: +61 8 9321 2375
    ABN 98 009 210 235
    HARDMAN RESOURCES LTD
    Web address: www.hdr.com.au
    Email: [email protected]
    The development plan for the Chinguetti Oil Field has now been adopted by the Woodsideoperated
    joint venture and the final investment decision is expected by mid-2004. It is
    expected that production will start up in late 2005 or early 2006, at an initial rate of 75,000
    barrels of oil per day (“bopd”) of which Hardman’s share would be 16,200 bopd. The
    Woodside joint venture partners will commission a floating production, storage and off-take
    vessel (“FPSO”) so that gathering and loading of oil into tankers will be carried out entirely
    offshore.
    The 2003 exploration programme offshore Mauritania was particularly successful. The Tiof
    oil discovery was made with two wells separated by a distance of 8 kilometres, and the
    results indicate recoverable oil of between 300 to 400 million barrels. As an indication of the
    value of the 2003 exploration successes and the progress at Chinguetti, Hardman recently
    entered into an agreement to sell to the BG Group (British Gas) an interest in the Woodside
    joint venture of 13.08% in PSC Area A and 11.63% in PSC Area B, which Hardman had
    recently acquired from Agip, for a gross profit of approximately US$100 million.
    Development drilling on the Chinguetti oil field is scheduled to begin in the second half of
    2004. In parallel, an appraisal/exploration programme will comprise appraisal wells at Tiof
    and Banda as well as exploration wells targeting new prospects in the Woodside-operated
    joint venture areas, where the exploration risk has been significantly reduced by successes to
    date. This 2004 programme, expected to begin early in the third quarter, will entail the
    drilling of up to eleven wells. Depending on the degree of success in 2004, the Company’s
    Directors envisage a further increase in exploration and appraisal activity offshore Mauritania
    in 2005 ahead of production start-up at the Chinguetti field.
    While Hardman’s principal assets and activities are currently in the offshore Mauritania
    Basin, the Company is making good progress with its other international licence areas, which
    are at varying stages of the exploration cycle. In some cases, notably Guyane and Uganda, the
    Company has recently acquired new seismic which has been used to identify promising
    prospects for drilling. Other areas are at an earlier stage, with reinterpretation of older data
    and planning for a new exploration programme. Hardman aims to introduce farmin partners
    to its frontier project areas in order to reduce its exposure to costs during the early exploration
    drilling phase.
    Following successful completion of the transaction with BG, and the recent sale of Perth
    Basin interests (see announcement of 4 March 2004), the Board considers that Hardman will
    be in a good financial position. However, greatly increased expenditure is anticipated during
    the remainder of 2004 and through 2005. The Company’s share of the Chinguetti field
    development cost is projected to be approximately US$108 million, for which bank financing
    is being negotiated for a facility of US$70-80 million, expected to be finalised by late May
    2004, leaving approximately US$30 million to be provided by Hardman.
    The Mauritanian exploration and appraisal programme is planned for 2004, however, will
    require a much increased level of funding by comparison with previous years. As already
    mentioned, depending on success it is envisaged that this requirement could well increase
    further in 2005. The Directors therefore consider it prudent to ensure that adequate cash
    reserves are available to meet these requirements as they arise during the period leading up to
    positive cashflow being obtained from Chinguetti production.
    Web address: www.hdr.com.au
    Email: [email protected]
    In this way, the Company will be in a position to derive maximum benefit from the planned
    and projected exploration and appraisal activity in the core Woodside-operated Mauritania
    blocks, where risk has been reduced by successes registered to date. This is a key element in
    the Company’s strategy, which is to become a medium-sized international producer with a
    substantial reserves base to underpin future growth.
    The proceeds of the Placement and the Entitlement Issue, together with the Company’s
    existing cash resources, will be used for:
    · the exploration and appraisal programmes in Mauritania which are budgeted for 2004
    and forecast for 2005;
    · the forecast programmes for exploration, evaluation and development of other oil and
    gas projects; and
    · for working capital purposes.
    The Directors consider that this use of funds will put the Company in a strong position to
    realise its strategic goals and that the fundraising is therefore in the best interests of the
    Company and its Shareholders.
    A prospectus published by the Company and containing details of the Entitlement Issue and
    the Placing for Cash is expected to be posted to the ASX and AIM on Friday 2 April 2004.
 
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