Highlands Natural Resources Regulatory News (HNR)

23 May 2006 07:00

Hardman Resources Limited23 May 2006 STOCK EXCHANGE / MEDIA RELEASE RELEASE DATE: 23 May 2006 AUSTRALIAN CONTACT: Simon Potter Hardman Resources Ltd +61 8 9261 7600 Peter Thomas Hardman Resources Ltd +61 8 9261 7600 Jim Kelly Third Person Communications Pty Ltd +61 2 8298 6100 LONDON CONTACT: Patrick Handley Brunswick Group +44 207 404 5959 RE: UGANDA DRILLING PROGRAMME Hardman Resources Limited ("Hardman") provides the following update on itsoperated drilling activities in Uganda: Uganda: Block 2 - Mputa-2 Appraisal Well Mputa-2 reached a total depth of 1,344 metres at 9:30am, Saturday 20 May,shallower than the planned depth for the well of 1,500 metres, as all horizonswere intersected high to prognosis. At midnight on Monday 22 May wireline logs were being run for evaluationpurposes. Mputa-2 is a step-out appraisal well 3 kilometres from the Mputa-1 discovery,with two principal objectives; the first to determine the lateral extent andpotential of the upper oil bearing reservoir in Mputa-1 and the second to targetthe potential for extensive stratigraphic trapping of the thicker lower zoneintersected in Mputa-1. The well confirmed the lateral extent of the upper reservoir sands although thisinterval appears to be water wet in Mputa-2. A core was taken which willdetermine reservoir parameters useful for assessing production potential atMputa-1. The widespread lateral extent of this reservoir unit is encouraging forthe potential of the Mputa-1 discovery. Hydrocarbon shows were encountered in sands in the lower target zone of Mputa-2and oil samples have been recovered. While this sequence appears to have areduced nett:gross and thus thinner potential reservoir units compared with theequivalent sands encountered at the Mputa-1 location, the presence of both reservoir and oil at such a step-out is highly encouragingfor the exploration of the extensive basin. A decision on whether to case thehole for future testing or completion will be made shortly. Results from Mputa-2 will be integrated with the results from Mputa-1 andWaraga-1 to determine the reserve potential, commerciality and potentialdevelopment plans for the fault block which contains the Mputa-1 and Waraga-1oil discoveries. Planning for the drilling of additional exploration/appraisalwells and the acquisition of further seismic is in progress. Equipment mobilisation is currently underway to flow test the Waraga-1 oildiscovery utilising the Eagle Drill Rig. Testing operations are expected tocommence mid June. Simon Potter, Hardman CEO commented. "We are at a very early stage in the exploration of this new and exciting basin.We already have two oil discoveries and now a successful appraisal well that hasconfirmed lateral extension of the reservoirs, the presence of hydrocarbonsdeeper into the basin and a valid migration pathway from under Lake Albert. Thisinformation will now be integrated into our regional understanding for futureexploration and appraisal of larger structures under the lake as well as furtherdrilling later in the year onshore". Equities in Block 2 are: Block 2Hardman Petroleum Africa Pty Ltd (Operator) 50.0%Tullow Oil 50.0% Times and dates for Ugandan wells refer to UTC/GMT +3 hours (Uganda time), 5hours behind Western Standard Time, Perth. All reported depths are referenced tothe rig rotary table (RT). PETER THOMASCHIEF FINANCIAL OFFICER Note: (1) In accordance with the ASX Listing Rules, the geological informationsupplied in this report has been based on information provided by geologists whohave had in excess of five years experience in their field of activity. (2) In accordance with the AIM Rules, the information in this report has beenreviewed and signed off by Mr Chas Sheen, B App Sci (Geology), Grad Dip App Phys(Geophysics), Senior Geophysicist at Hardman, who is a member of the PetroleumExploration Society of Australia and who has at least 5 years relevantexperience within the sector. This information is provided by RNS The company news service from the London Stock Exchange