Highlands Natural Resources Regulatory News (HNR)

27 Feb 2006 07:00

Hardman Resources Limited25 February 2006 STOCK EXCHANGE / MEDIA RELEASE RELEASE DATE: 25 February 2006 AUSTRALIAN CONTACT: Simon Potter Hardman Resources Ltd +61 8 9261 7600 LONDON CONTACT: Patrick Handley Brunswick Group +44 207 404 5959 RE: FIRST OIL PRODUCTION FROM CHINGUETTI FIELD PAGES: 3 Hardman Resources Limited ("Hardman") is pleased to announce that oil productionfrom the Chinguetti field (Hardman 19.008%), offshore Mauritania, commencedduring the early hours of the morning on Saturday 25 February 2006. "This is a profoundly important moment in the history of Hardman Resources",Simon Potter, Hardman CEO and Managing Director, commented. "The company is nownot only an explorer but on the verge of being a significant international oilproducer. Clearly, Chinguetti is of crucial importance in underpinning ourbusiness strategy." The transition to international oil producer is the culmination of a processthat began in September 1996 when Hardman negotiated and signed the firstoffshore Production Sharing Contract ("PSC") with the Mauritanian Government.Hardman later introduced other companies, including Woodside, through farm inagreements signed in August 1998 and those companies funded the initialexploration investment. Extensive technical work was carried out with the acquisition and interpretationof a very large volume of new 2D and 3D seismic data. This led to the decisionto drill the Chinguetti prospect as the first exploration well, and where an oildiscovery was subsequently announced in May 2001. The Chinguetti development project is operated on behalf of the joint venture byWoodside Mauritania Pty. Ltd and is located in water some 800 metres deep. Thedevelopment involved a gross capital expenditure of about US$720 million andinitially comprises twelve wells - six production wells, five wells for waterre-injection and one for gas re-injection. Production is via the floatingproduction storage and offloading facility (FPSO), Berge Helene - located 80kmsouth-west of the capital Nouakchott - and is expected to increase steadily overthe coming weeks to reach a peak of about 75,000 barrels a day in April, withthe sale of Hardman's first oil cargo currently also forecast for that month. Aside from Chinguetti, Hardman participates in further discoveries offshoreMauritania at Tiof, Banda, Tevet and Labeidna, operated by Woodside, and Pelicanand Faucon operated by Dana. These are currently being evaluated for developmentand/or appraisal. In addition to Woodside and Dana, Hardman now has as partnerssuch major international companies as, BG, Gaz de France, Petronas, Wintershall,Premier and Tullow, as well as the Mauritanian State. In aggregate, the jointventures in which Hardman participates have invested over US$1.4 billion inexploration and development offshore Mauritania. "The move to production provides us with the revenues to sustain a growthstrategy embracing not only our Mauritanian holdings but other selectedopportunities in our focus areas," Mr Potter said. "Together with my colleagues,I'd like to thank all those who have gone before me at Hardman who helped createthis substantial opportunity, everyone involved at Woodside in the developmentand specifically to congratulate the project team. Achievement of first oil fora deep water project within 20 months from the development decision is asubstantial accomplishment." Alan Burns, Chairman, added: "Hardman's achievement in opening the Mauritaniabasin through primary exploration, through fostering relations with the state ofMauritania, and by introducing joint venture partners, is a measure of theresolution of all our employees and colleagues involved - at all stages. We lookforward to sustaining our commitment to the region with further investment, bothin the acreage and locally on-shore, and to working in partnership withMauritania and its people." Participating interests in the Chinguetti Joint Venture are: Company Chinguetti Joint Venture Woodside group companies (Operator) 47.38448%Hardman group company 19.00800%Societe Mauritanienne des Hydrocarbures (formerlyGPC) 12.00000%BG group company 10.23440%Premier group companies 8.12328%ROC Oil group companies 3.24984% SIMON POTTERMANAGING DIRECTOR Note: In accordance with Australian Stock Exchange Limited listing requirements,the geological information supplied in this report has been based on informationprovided by geologists who have had in excess of five years experience in theirfield of activity. This information is provided by RNS The company news service from the London Stock Exchange