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    Oil find sends Woodside stock soaring
    By Barry FitzGerald
    Resources editor
    February 16, 2005

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    Woodside Petroleum shares raced to a record yesterday in response to confirmation of the Tiof oil discovery off Mauritania as a big find and speculation that the North-West Shelf gas project could pick up a $US30 billion ($A38 billion) supply contract with South Korea.

    While the South Korean gas supply contract is expected to be wide of the mark, the result from Tiof fed expectations that Woodside and its partners had another good-sized oil project, with the consensus ranking it as a 1 billion barrel (in-situ) find.

    Woodside shares jumped 77¢ to $21.72 yesterday. Its local partners in Mauritania, Hardman and Roc, also performed strongly, rising 22¢ to $2.09 and 5¢ to $1.94 a share respectively. Woodside's gain was supercharged by the Korean speculation.

    Woodside's enthusiasm for Tiof's potential - somewhere between 20 and 40 per cent of the oil could be expected to be recovered - will come under scrutiny today when the group reports that its profit for (calendar) 2004 has surged from $528 million in 2003 to an expected $691 million, the market's consensus figure.

    AdvertisementThe forecast 32 per cent hike reflects the surge in oil prices and lower operating costs. The bottom-line profit will be boosted to more than $1 billion thanks to the sale of a stake in the Enfield oil project in WA to Japanese interests.

    While there is some certainty with today's profit result, that could not be said about yesterday's speculation on a LNG supply contract to South Korea for the Woodside-managed NWS gas project. The partnership, already sold to Japanese and Chinese customers, faces stiff competition from suppliers from Malaysia, Yemen and Russia.

    An announcement in South Korea on the LNG contract bid is expected today, but the NWS is not expected to feature. Woodside's estimate of what it will call contingent reserves at Tiof are expected to be included in the updated reserves statement, due for release with the profit report.

    Elsewhere, Santos shares jumped 4.1 per cent to a near-record $9.65 ahead of confirmation of a major reserves downgrade at its Mutineer-Exeter project off WA. But the field will start producing earlier than expected and more cheaply.

    The reporter owns Hardman and Santos shares.

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