HDR hardman resources limited

latest - for hardmano, black scorpion etc

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    Latest From Intersuisse (Fri)

    Hardman Resources (HDR)
    Situation Update
    Speculative Buy
    $0.73

    Test results from Chinguetti 4-5 well expected shortly
    HDRs share price hit a 12-month high yesterday of $0.73 in late trading, as the market anticipates the imminent release of test results from the current Chinguetti 4-5 well development/appraisal well in offshore Mauritania.
    HDR advised last week that the results of production testing were not expected to be available until at least the latter part of this week due to minor operational delays.
    Earlier this week HDR advised that completion operations of the test interval had been completed and preliminary activities prior to flowing the well have commenced.
    HDR has identified a gross hydrocarbon column of around 100 metres in the current Chinguetti 4-5 well, which is in-line with our pre-drill expectations and compares favourably with gross intercepts of 94 metres and 114 metres in the two previous Chinguetti wells.
    HDR has also advised that the wildcat component of the current Mauritanian programme should commence in late-October, with the arrival of the appropriate drill ship around October 25th.

    Impact
    Interest is now on the results of flow testing - the first of its kind ever undertaken on the Chinguetti structure. The flow of oil at stabilised rates has the potential to excite the market, although we believe that developments so far underwrite the current HDR share price.
    Development proposals for Chinguetti indicate that a FPSO will be used and that at least six production wells (possibly more), will be drilled to achieve a production rate of approximately 75,000bopd. Total development cost under this scenario would be US$400m of which HDR's share is 21.6%.
    We believe that the current results from the Mauritanian programme are sufficiently good to support the HDR share price at around the $0.70 level. Additional upside will depend upon the results of production testing from Chinguetti.
    This is just the first of at least four wells in Mauritania. Three successful high impact wells in Mauritania to date have highlighted the potential. HDR is highly leveraged to further success in this emerging hydrocarbon province, but it will probably require the confirmation of another wildcat success to really see significant and immediate price upside. This wildcat programme will commence in late-October.

 
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