Highlands Natural Resources Regulatory News (HNR)

30 May 2006 07:00

Hardman Resources Limited30 May 2006 STOCK EXCHANGE / MEDIA RELEASE RELEASE DATE: 30 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 PAGES: 2 Hardman Resources Limited ("Hardman") provides the following update on itsoperated drilling activities in Uganda: Uganda: Block 2 - Mputa-2 Appraisal Well As of midnight on Saturday 27 May, Mputa-2 has been cased and suspended as apotential future oil producer. This follows the completion of extended wirelinelogging activities after some equipment malfunctions. The results of Mputa-2 confirm that the upper reservoir sands intersected inMputa-1 and Waraga-1 are laterally extensive, but at this location are waterwet. Pressure data indicates that the hydrocarbon column height in the upperzone of the Mputa field is potentially of the order of 100 metres, although atthis upper level, the Mputa and Waraga structures do not have a common oil leg.The implications of this pressure data and the fact that the target sands camein over 100 metres shallow to prognosis are both positive to the interpretationof the Mputa Field; the new data is being integrated with existing models inorder to provide estimates of oil in place for these upper sands shortly. Theextent to which these sands will flow commercial volumes of oil will bedetermined when flow testing operations begin on Waraga-1, expected to commencemid June. Oil samples have been recovered from the lower reservoir zone in Mputa-2, whichcan be correlated to similar oil bearing zones in both Mputa-1 and Waraga-1. Thepresence of oil saturated sands in these basal units in all wells drilled todate implies an extensive stratigraphic trapping mechanism at this level. Thegross interval of these units is variable and there does not appear to bepressure communication between them. But contained within the sequence areobvious oil bearing zones of around 5 metres thickness that will be flowed inour testing programme at Waraga-1 to determine whether they are capable ofsustaining commercial flow rates. The information derived will then determinewhich of either Mputa-1, or Mputa-2, or both, will be subsequently tested.Assessing where the thicker sand units and more extensive net pay exists inthese sequences will be key to their commercial potential and the need for 3Dseismic acquisition is currently being evaluated. The results from the three discovery wells and the testing programme will beintegrated to define the reserve estimates, commerciality and potentialdevelopment scenarios for the onshore area. Planning for additional exploration/appraisal wells onshore and a test of a prospect just offshore has commencedwith onshore drilling scheduled for 4Q 2006. Plans for the acquisition offurther 2D seismic in the north of the block are also well advanced. Simon Potter, Hardman CEO commented."The casing and suspension of Mputa-2 reflects a third discovery in three wells.The range of reserves will be calculated based upon the deliverability of boththe upper and basal reservoirs and the exact nature of the crude determined fromproduction testing at Waraga-1 and Mputa commencing in mid June. We haveidentified other follow-on reservoir targets for exploration and these will beconsidered for the planned exploration and appraisal drilling programme later in2006. "We have an active exploration schedule for the remainder of 2006. As well ascontinuing exploration and appraisal in Uganda, we will commence new drilling inMauritania in and begin a new exploration programme in both Tanzania andSuriname." 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). SIMON POTTERMANAGING DIRECTOR 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