HDR hardman resources limited

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  1. 1,747 Posts.
    Here's some from Corporate File

    Regards M.



    Open Briefing. Hardman. Mauritanian Reserves & Drilling

    Record of interview :
    corporatefile.com.au
    Hardman Resources Ltd announced today that studies indicate the most likely (P50) recoverable reserves of the Chinguetti Field (Block 4, PSC Area B - Hardman 21.6%) is in excess of 100 million barrels. That's for the primary reservoir target only. In January 2002, Woodside advised that the Scope For Recovery reserves was 65 million Barrels. What were the main differences between your evaluation and Woodside's?


    Managing Director Ted Ellyard
    The Woodside estimate of reserves for Chinguetti of 65 million barrels was a risked reserve estimate. That is, parts of the field that have not yet been evaluated by drilling have had a risk factor applied, thereby reducing the oil volume estimates. Hardman’s reserve estimate, which was over 100 million barrels recoverable, was a most likely or P50 estimate, based on the interpretation of the results from the Chinguetti-1 well and the 3D seismic data available over the field.


    corporatefile.com.au
    What risks remain in Hardman’s estimates for recoverable volumes of 100 million plus barrels?


    Managing Director Ted Ellyard
    The estimate of 100 million plus barrels recoverable is the most likely estimate and incorporates the entire area of the primary reservoir sand and an oil column of 300 metres gross thickness, as interpreted from 3D seismic.


    The first well, Chinguetti-1, has proven the reserves for part of the field and a minimum gross oil column of 120 metres. The joint venture is planning to drill two appraisal wells which will test the northern and eastern sides of the field and also prove the total thickness of the oil column. After drilling these two wells during the 2002 drilling campaign, the Chinguetti Field reserves will be more clearly defined.


    corporatefile.com.au
    When might you expect first production from offshore Mauritania and what type of field development would be expected in this deep water environment?


    Managing Director Ted Ellyard
    Following the drilling of the two appraisal wells this year we'll know the size of the field development required and be able to immediately start development work. The platform would most likely be a floating production storage platform or ship called an FPSO. This may take a year to build, but we could save time and capital cost by leasing an FPSO vessel.


    At this stage it's difficult to give a precise estimate of the time for development but I would hope that we could achieve first production within two years from drilling the appraisal wells.


    corporatefile.com.au
    What’s your assessment of the risks involved in developing a project in offshore Mauritania?


    Managing Director Ted Ellyard
    We consider the political risk to be low in Mauritania, which enjoys a fully democratic government and is economically stable.


    The main risks are those common to deep water developments which require high production rates to offset the large capital costs for drilling and development. At this stage we're confident that we have a high quality reservoir that will produce at high production rates and the field is well defined by 3D seismic. However, the results from the next two appraisal wells and production testing at one of the wells are required to confirm these aspects.


    corporatefile.com.au
    As you mentioned already, Hardman also announced the 2002 drilling and work programme for offshore Mauritania. This includes the two appraisal wells on the Chinguetti field and two exploration wells (one firm and one contingent) plus large 3D seismic programmes. How do the two exploration prospects planned compare with Chinguetti?


    Managing Director Ted Ellyard
    The firm exploration well is to test a structure in Block 6 (Hardman 35.5%) to the north of Area B. This prospect is a Cretaceous sand channel over a large structure that's well defined by 3D seismic and has good seismic indications of potential hydrocarbons, similar to that shown at Chinguetti before it was drilled.


    The second exploration well is planned as a test of a similar aged reservoir in a salt structure near Chinguetti. Currently three prospects are being considered and further 3D seismic has recently been shot over one of these. A final decision on the prospect to be drilled as the fourth well in the 2002 programme will not be made until the seismic data has been evaluated later this year. Therefore this well is still contingent.


    corporatefile.com.au
    Oil was recovered from the flank of the Block 6 prospect in a previous well drilled by Shell in the 1970’s. Why didn’t Shell pursue drilling in the area?


    Managing Director Ted Ellyard
    Shell drilled the structure back in the 1970’s when they did not have modern 3D seismic data to identify the sand channel reservoir and therefore did not intersect the main prospect reservoir. Shell recovered oil from thin sands on the flank of the prospect, but in sub-commercial amounts. As a result they abandoned the project. The fact that we have oil on the flank of this prospect reduces the exploration risk.


    corporatefile.com.au
    How important is it to increase the size of the current recoverable reserves for the Chinguetti Field, or to discover more oil within tie-back distance?


    Managing Director Ted Ellyard
    We consider that the Chinguetti Field will be economically viable at the current most likely estimate of 100 million plus barrels.


    There is potential to increase the reserves by discovering oil in deeper Tertiary sands which were not drilled by the first well and also in the B Sands which contained a 7 metre gas column in Chinguetti-1. If the reserves are larger, the profitability from the field will improve.


    In addition, we're planning to drill a similar type of prospect to Chinguetti, within a 25-kilometer radius of the discovery, as the fourth well in the 2002 programme and if successful this field could be tied into the Chinguetti FPSO, which would further improve the economics and profitability.


    corporatefile.com.au
    What will the current programme cost Hardman and what farmin obligations remain?


    Managing Director Ted Ellyard
    The net cost to Hardman for the 2002 drilling programme is about A$40 million.


    Woodside will free carry Hardman for 12.25 % of the cost of the Block 6 exploration well to complete its farmin obligations in Area C, while Hardman will fund 24.25% and retain 35.5% of the Block 6. Hardman is in discussions with some large oil companies to farmout its remaining cost of this well which would reduce its retained interest in Block 6 to about 23%. If a farmout deal is signed it would significantly reduce Hardman’s net cost in Mauritania to about A$30 million.


    corporatefile.com.au
    What drilling plans do you have beyond the current programme?


    Managing Director Ted Ellyard
    This year we'll shoot large 3D seismic surveys over Block 2, 3, 4, 5 and 7 in Mauritania, which will increase the total 3D coverage to about 8,200 sq kms. This additional seismic will be used to define many high quality prospects for drilling in 2003 and beyond. I expect that during 2003 we'll again have an active drilling programme in Mauritania comprising several wells.


    corporatefile.com.au
    What are your observations now that Hardman shares have traded since mid-March on the Alternate Investment Market (AIM) in London?


    Managing Director Ted Ellyard
    The share trading in London has been steady but on fairly low volume compared with the daily trading of Hardman shares on the ASX, due to the fact that the company has not issued any new shares to the London investors at this time. I understand that some London brokers have been buying shares in Australia to get stock and this may have fuelled the rise in price over the past few weeks. I believe there will be increasing interest in Hardman shares in London as the company’s prospects are better understood.


    corporatefile.com.au
    Thank you Ted.



 
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