HDR hardman resources limited

oriel securities

  1. 187 Posts.

    Oriel Securities is one of HDR's institutional brokers in the UK and I managed to speak to one of their analysts who couldn't tell me anything confidential (of course), other than that they are very positive about the stock. However, I did manage to get a few things out which may be of interest:

    1. they believe that HDR's current share price is underpinned by oils already discoverred and the real exploration potential is what's enticing;
    2. there are many chinguetti look-a-likes in the Mauritania and there must be at least a few more Chinguetti type discoveries;
    3. while the jv partners have focused on Tertiary plays, it is the Cretatious sands which could produce the 'big one'. However, Cratatious plays are deeper targets and more expensive to drill (and Courbine's failure puts a dampner on this.
    4. The exploration record so far of the jv partners in a virgin province of 50% (2 out of 4) is very impressive and highlights the prospectivity of the region, which is "as good as anywhere in the world".
    5. The recent sale of Fusion's interest in Mauritania is a 'midiocre' deal for Fusion but a 'very good' deal for Premier, as Premier is picking up good exposure to Mauritania at a discount.

    The fact that Oriel is an instituational broker should mean that there would be another institutional capital raising, the question is when. I personally think that it is very likely to be before year end, and after a successful well.

    HDR is holding steady at the moment, would be nice to see it clear 59/60, which is stacked with sellers.

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