Hi Hardmano,
This is from one of my previous posts and is from O&G.
Regards M.
what next
Posted 20/11/02 20:29 - 17 reads
Posted by Mangrove
Post #54548 - in reply to msg. #85891
Took a bit of working out.
Regards M.
THE FIRST (TOP) TIER
1. HARDMAN RESOURCES (HDR)
Thanks to what is obviously quite irrational selling by
day traders HDR shares are, in the bulletin’s opinion,
the most exciting stock on the oil boards at present.
The reaction to the failure of the Thon wildcat to find
commercial hydrocarbons has been almost
unbelievable. Even though HDR didn’t contribute a
single cent to this well which, moreover, was a long way
from the previous action in what has now been
convincingly established as a major hydrocarbon
province, the company’s shares dropped more than
20% on the news, with almost $60 million sliced off its
market valuation. When such extraordinary things as
this are allowed to happen, it makes one wonder what
maniacs have been let loose in the market place. It
didn’t make the slightest bit of difference that, when
making the announcement about Thon’s failure, HDR’s
managing director commented on what a wonderfully
successful year his company had enjoyed in Mauritania,
with the very positive results from appraisal drilling at
Chinguetti and, on top of that, the most exciting oil and
gas discovery at Banda. Reading between the lines,
the bulletin is now almost certain at least 150 million
barrels of recoverable oil have now been proved up at
Chinguetti, and it doesn’t even need any reading
between the lines to be pretty confident the huge Banda
structure contains at least 100 million barrels of
recoverable oil, and almost certainly a great deal more.
And Banda, even at this very early stage, has been
credited with several trillion cubic feet of natural gas
which at this relatively shallow water location, and within
quite easy reach of markets, has very significant value.
And, what always must be remembered is that
exploration of this truly fantastic area has barely started,
with many dozens of highly attractive prospects and
leads of various play types remaining to be tested.
Surely nobody, in view of this, can seriously disagree
with the bulletin’s assertion it is highly probable that
HDR has already booked at least 50 million barrels of
recoverable oil, and almost certainly more than this in
barrels of oil equivalent (boe) of natural gas. While the
bulletin isn’t even going to attempt to put a Net Present
Value (NPV) on the gas, it’s simple enough to put one
on the oil, and while it knows quite a few people will say
it’s too high, the bulletin is sticking with its figure of ten
Australian dollars a barrel, assuming high levels of
production, which there’ll certainly be, are not much
more than two years away. The bulletin is also counting
on OPEC doing what’s necessary to maintain an oil
price at around US$25 a barrel, and the Australian
dollar remaining much where it is now. In other words,
web site http://petroleum.co.nz 3 e-mail [email protected]
the bulletin is working on an Australian dollar oil price of
around $45 a barrel for its NPV of $10 a barrel. The
bulletin is also counting on the high level of production
to nullify the effect of the additional costs associated
with a deep water location. Anyway, if this NPV is
accepted, HDR’s share of the likely 250 million barrels
of oil discovered in Mauritania to date, has a present
worth of something over $500 million or, say, $1.20 a
share as issued capital stands at present.
2.
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