Highlands Natural Resources Regulatory News (HNR)

24 Apr 2006 07:00

Hardman Resources Limited24 April 2006 STOCK EXCHANGE / MEDIA RELEASE RELEASE DATE: 24 April 2006 AUSTRALIAN CONTACT: Simon Potter Hardman Resources Ltd +61 8 9261 7600 Peter Thomas Hardman Resources Ltd +61 8 9261 7600 LONDON CONTACT: Patrick Handley Brunswick Group +44 207 404 5959 RE: MARCH 2006 QUARTERLY REPORT PAGES: 15 Please find attached the March 2006 Quarterly Activities and Cash Flow Reportfor Hardman Resources Ltd. SIMON POTTERMANAGING DIRECTOR HARDMAN RESOURCES LTD ABN 98 009 210 235 REPORT TO SHAREHOLDERS FOR THE QUARTER ENDED 31 MARCH 2006 This report summarises the activities of Hardman Resources Ltd (the "Company")and its controlled entities (together, "Hardman" or "the group") during thequarter ended 31 March 2006. ACTIVITY HIGHLIGHTS • Production: First oil from Chinguetti field achieved on 25 February, 2006 (WST) with rapid production build-up to facilities capacity. Chinguetti production averaged 66 mbopd in March (gross; Hardman net economic share 10.9mbopd). Hardman net economic share of production for the quarter was 359 mbbls. Production averaged approximately 60 mbopd (gross) for the first half of April; impacted by gas management restrictions; • Developments: Tiof development concept selection; JV decision anticipated in current quarter. Chinguetti estimated final project cost US$708 million (gross), 2% below the previous estimate; • Exploration success in Uganda: Hardman-operated Mputa-1 and Waraga-1 oil discoveries in Block 2 successfully open an exciting new play. Testing of two wells and drilling of the follow-up Mputa-2 appraisal well to commence in May; • New acreage in Tanzania and Suriname: prospective areas which diversify the portfolio with different risk and cost profiles. Suriname venture announced today is a low cost farm-in to onshore concessions close to existing infrastructure and production; • Mauritania exploration: Colin (PSC A) and Flamant (Block 8) prospects selected as initial wells for next exploration campaign, commencing July 2006 - both potentially highly material to Hardman in success cases. Zoule-1 and Dore-1 wells plugged and abandoned as dry holes in the quarter; • Commercial: First two Hardman cargoes lifted in April 2006; Settlement of Mauritanian contract dispute agreed in-principle, subject to joint venture approval; • Finance: ended March 2006 with net debt of A$12 million. OUTLOOK: Hardman's CEO and Managing Director Mr Simon Potter commented: "Thesuccessful completion of the Chinguetti project is a momentous event for Hardmanbut needs to be viewed in the context of a series of major activities we haveundertaken in recent months. We are close to consensus with operator, Woodside,for a way forward on the Tiof project; we have diversified our portfolio withlow cost entry into Tanzania and Suriname which have different risk and costprofiles but are complementary to and leverage off our existing assets; andfinally we have reinforced our credentials as a 'play-maker' with our recentdiscoveries in Uganda. The forward programme is a balance of maximising cashflow, assessing development options, appraising potential developments as wellas managing active exploration programmes in six countries." CORPORATE On 12 April 2006 Hardman announced the appointment to the Board as Non-ExecutiveDirectors of Mr Peter Mansell and Mr John Conlin, effective after the Company'sAnnual General Meeting on 18 May 2006. On the same day the Company announcedthat Mr Scott Spencer had retired from the Board after nearly 12 years' servicein an Executive, and more recently in a Non- Executive, capacity. Due to its change in balance date from 30 June to 31 December, the Company willhold its next Annual General Meeting at 9.30am on 18 May 2006 at Event Room A ofthe Burswood Convention Centre, Burswood International Resort, Great EasternHighway, Burswood, Western Australia. FINANCE The net cash outflow before financing for the quarter ended 31 March 2006 wasA$46.1 million. Cash expenditure included A$22.4 million spent on explorationand appraisal activities and A$24.0 million on development of the Chinguettifield. In aggregate, exploration, evaluation and development cash spend for thequarter was significantly below the amount forecast for the quarter in theprevious report (A$71 million). This reduced cash spend of A$25 millioncomprised A$8 million reduction in development expenditure and A$17 millionlower-than-forecast exploration expenditure. The development reduction reflecteda combination of later than anticipated cash calls on the Chinguetti developmentflowing into the next quarter and a reduced forecast project cost from theoperator. The reduction in exploration and evaluation expenditure occurred as aconsequence of a number of factors, including: lower than anticipated drillingcosts in Mauritania; lower seismic acquisition and processing costs for Guyane;and re-phasing of cash payments. The net cash outflow was financed from cash balances, resulting in Group netdebt as at 31 March 2006 of A$12 million (31 December: net cash of A$36million). As at 31 March 2006, the Group had available cash balances of A$76.4million and an undrawn facility of US$37 million available to re-financedevelopment costs previously funded from internal resources. Forecast cash expenditure for exploration and appraisal for the quarter ended 30June 2006 is approximately A$15 million, with A$8 million expected to be spenton the Chinguetti project. No amendments were made in the quarter to the hedging contracts, principallyoption collars, previously entered into. The programme did not include sale ofany call options for quarter two 2006, so the group is fully exposed to currentoil price strength. As part of the hedging put in place in 2005, the Group hasgiven up oil price upside above US$72 - US$76 per barrel for up to 4,200 barrelsper day for the second half 2006, in order to fund the cost of purchasingoptions for downside protection. REVIEW OF OPERATIONS MAURITANIA - WEST AFRICA Chinguetti Field Development (Hardman 19.008% equity, Woodside operated) Chinguetti first oil was achieved on 25 February 2006 (WST), thereby meeting theproject target of production by the end of March 2006. This followed on from thesuccessful commissioning work on the Berge Helene FPSO, and installation of thesub-sea systems. Water injection commenced in early March and has since beensuccessfully operating at full capacity. Commissioning of gas compression forthe re-injection of produced gas to the Banda reservoir has yet to besuccessfully completed, due to outstanding equipment problems, though theseshould be rectified soon. The Chinguetti project estimated final cost is US$708 million, US$14 millionbelow the previous estimate. The FPSO achieved production ramp-up to capacity more quickly than expected,with a peak oil rate of over 75mbopd being briefly achieved in early March.Average daily production in March was 66 mbopd (gross; Hardman net economicshare 10.9 mbopd). On a net economic basis, Hardman entitlement to productionunder the production sharing contract allocations for the quarter was 359 mbbls.For the first half of April production has been approximately 60 mbopd (gross),impacted by gas management constraints and current low deliverability from thenorthern wells. While it is too early in terms of production history data to make inferencesabout overall reservoir performance and reserves, initial well deliverabilityhas met expectation for the four southern block producers. The productionpotential of the southern wells is currently restricted in part by gas handlingconstraints. Production has, however, been below expectation from the northernblock, where two producers penetrate the reservoir on the fringe of the mainchannel axis and as a result provide low current deliverability. A side-track ofan existing well or additional drilling are among options being considered tooptimise production, and the scheduled arrival of the Atwood Hunter drilling rigin late July creates options for such intervention. Production is expected to remain below oil facilities potential at least untilthe current gas handling constraints are alleviated and production from thenorthern part of the field is optimised. Planning for the Phase II wells is now underway and the first wells are expectedto be drilled in early 2007, in line with the project development plan for theChinguetti field. Tiof (Hardman 21.6% equity, Woodside operated) During the quarter, further geoscience, reservoir engineering and facilitiesstudies were undertaken, in order to develop a commercially and technicallyrobust phased development plan for this large but complex resource, which liesin water approximately 950-1,400 metres deep. The concept being optimised by the field operator, Woodside, is based on a drytree unit, either a tension leg platform (TLP) or possibly a spar platform, witha light-weight integral drilling facility. Under this scenario, initialdevelopment would cover the central area of the Tiof field, with subsequentfurther development to be determined once production history has been obtained. The key advantage of this proposed route, rather than an FPSO-based developmentwith sub-sea wellheads similar to Chinguetti, is that drilling and subseaequipment costs would be significantly reduced, thus bringing down the economicthreshold of recoverable reserves per well. However, this concept does carry ahigher initial facilities capital cost than a leased FPSO, with project capexindicatively in the range US$650-700 million. Given the complexity of the Tiofreservoir, and particularly concerns about the connectivity within thereservoir, reducing costs per well may be a key determinant of ultimate economicrecovery. The next step would be a joint venture decision anticipated in the currentquarter to take the selected concept forward. At this stage the concept is provisionally for six initial production wellswhich would access reserves in the region of 40-60 mmbbls and first oil shouldbe by 2009. With the facility having some 15 to 18 well slots to allow forfuture expansion, there would be considerable potential for additional reservesto be accessed from further development drilling. Potential reserves could befurther enhanced by better-than-assumed reservoir parameters. Indicatively, thefirst phase would be designed to handle oil production of approximately 50mbopd. The Chinguetti FPSO could be used for final processing and storage priorto export, at least for the initial phase of development, although a dedicatedfloating storage and offtake vessel is also an option. Hardman estimates oil in place for the Tiof field at around 1 billion barrels,comprising c.600mmbbls from the Miocene horizon (with P10 upside of some 900mmbbls) and additional contingent resources from the Oligocene horizondiscovered in Tiof-4. Since not all oil-in-place would be accessible from suchan initial development, further outlying volumes could be developed insubsequent phases, either via long reach wells or subsea wells. Ultimately, aphased development will optimise and enhance recoverable reserves whilstmanaging risk and capital exposure. Tevet, Labeidna and Banda Appraisal (Hardman 21.6%/ 24.3% equity, Woodsideoperated) Evaluation of the Tevet and Labeidna discoveries and the oil leg of the Bandagas field as tie-backs to the the Chinguetti facilities is ongoing, to beoptimised with Chinguetti phase 2 drilling and the development of Tiof. Mauritania Exploration PSC A and B (Hardman 24.3% and 21.6% equity respectively, Woodside operated) The Dore-1 well spudded on 18 January 2006, located in 385m water depth. A totaldepth of 2266m was achieved on 27th January 2006 penetrating the main objectiveLower Tertiary slope channel reservoirs, updip of the main Tiof field. The wellfailed to encounter any reservoir and was plugged and abandoned in February,with the Stena Tay rig subsequently being released from contract. Exploration drilling offshore Mauritania will resume in late July with thearrival of the Atwood Hunter semi-submersible rig. This unit will permit thedrilling of prospects in shallower water than was achievable in the previouscampaign. The initial sequence will include the drilling in PSC Area A of theColin-1 Miocene objective with mean potential reserves of 170 million barrels.Kibaro-1 will be the second PSC A well to be drilled in the campaign; it will bedrilled to a Cretaceous objective and is expected to satisfy the commitment forthe third exploration period of PSC-A. Work is ongoing to mature the lead drilling candidate for a PSC B well in theAtwood Hunter drilling campaign. Considerations for the PSC B 25% relinquishmentwere finalised towards the end of the quarter and will be submitted in quartertwo. Block 1 (Hardman 18% equity, Dana operated) The joint venture continued to evaluate the results of the Faucon-1 welldiscovery. The discovery is significant as it has expanded the proven limits ofthe Cretaceous petroleum system into the southernmost offshore block ofMauritania. PSC C 2 (Hardman 28.8% equity, Woodside operated) Work on the review of hydrocarbon prospectivity in Block 2 is ongoing. Block 2has been upgraded by the Block 1 Faucon-1 well discovery and the well resultswill be integrated into the charge / maturity modelling of southern offshoreMauritania. PSC C 6 (Hardman 22.422% equity, Woodside operated) Zoule-1 was plugged and abandoned as a dry hole on 14th January 2006,significantly under the dry hole budget. The joint venture is committed to thethird exploration phase, with the Zoule results being incorporated into thereview of prospectivity within the permit. Block 7 (Hardman 16.2% equity, Dana operated) Processing of the new 1,540 sq km 3D survey has been completed. The data isbeing merged with the 'ATAR' Block 6 traded data and the earlier (2001) Block 73D data. Interpretation of the merged datasets has commenced in order to maturea prospect for the commitment well to be drilled during the upcoming 2006/2007Atwood Hunter campaign. Block 8 (Hardman 18% equity, Dana operated) Planning was completed for the final location of the Flamant-1 well, to bedrilled by the Atwood Hunter in 2006. The location is considered to be the besttest of a large regional high with both primary and deeper secondary objectives.This prospect will target a Cretaceous carbonate platform/reef play as theprimary objective with significant follow up potential. The Flamant prospect hasthe potential to contain about 5 TCF of gas recoverable, or 1 billion barrels ofoil. Commercial During the quarter the Company announced that its affiliate, Hardman ChinguettiProduction Pty Ltd (HCP), had entered into a term sales contract for its crudeoil production entitlement from the Chinguetti field offshore Mauritania withVitol S.A., a major oil trading company. HCP also entered into a poolingarrangement with the Government of Mauritania, its national oil company, SocieteMauritanienne des Hydrocarbures, and affiliates of BG plc and Premier Oil plcwho are participants in the Chinguetti joint venture, to lift cargoes jointlyfrom the FPSO (Berge Helene). This will provide for more frequent liftings ofentitlements and therefore more regular cashflow than could be achieved if HCPlifted its crude oil entitlements separately from other sellers. Three cargoes have been successfully lifted from the field to date, andlimitations to date on tanker size will now be relaxed allowing larger VLCCcarriers to lift cargoes from Chinguetti. Hardman participated in the second andthird cargoes; the first Hardman sale achieved a realised price of US$62.89 perbarrel. On 3 February 2006 Woodside Mauritania Pty Ltd, as Operator, advised the Companythat the Mauritanian Government was disputing the validity of agreements whichare supplementary to Production Sharing Contracts (PSCs) for Area A, Area B,Area C Block 2 and Area C Block 6 offshore Mauritania. On 31 March 2006 theCompany was advised by Woodside that an agreement in principle had been reachedwith the Mauritanian Government to settle the dispute concerning the validity ofthe supplementary agreements. Approval of all joint venturers to the agreementin principle is required before it can be implemented. At the date of thisreport, evaluation of the terms of the agreement is continuing. In summary, thesettlement would provide a modest increase in the Government's share ofproduction for periods when realised oil prices exceed US$55 per barrel. Anupfront bonus payment of US$100 million (gross; Hardman share 21.6%) would bepayable to the Government on signature of a revised PSC B Agreement reflectingthese amendments. UGANDA (Hardman 50% equity and Operator) In January 2006, Hardman announced that its Mputa-1 wildcat well in Block 2, incentral western Uganda, was an oil discovery. The well, which had been spuddedon 22 December 2005 reached a total depth of 1,186 metres in early January.Wireline logs indicated the presence of hydrocarbon-bearing sands over a grossinterval from 965 metres to total depth. Samples of black, waxy crude wererecovered from a gross sand interval of 965 metres to 975 metres but no samplescould be recovered from the deeper intervals with the available equipment. Thewell was cased and suspended for subsequent re-entry to permit testing. The Waraga-1 well, located 19km north east of Mputa-1 was spudded in February totest a structural prospect with geological targets identical to Mputa. The welldiscovered three zones of oil-bearing sands. The upper zone, which is bestconstrained by logging and pressure measurements, has a gross interval of 32metres and a net to gross ratio in excess of 50%. A middle oil zone ofapproximately 27 metres and a lower zone of 5 metres were also encountered, infair to excellent reservoir quality rock. The Waraga oil is believed to be c.30-40 API, although possibly waxy, crude. The Waraga-1 well was also cased andsuspended for testing. Hardman is presently mobilising a second rig into Block 2 along with testequipment, in order to test firstly Waraga-1 and then Mputa-1 and / or Mputa-2.Testing will allow representative oil samples to be obtained and permitestimates of reservoir productivity. Simultaneously, the Dafora rig is beingmoved to the Mputa-2 site, 3 km from Mputa-1, to test the extent of thehydrocarbon-bearing reservoirs seen at Mputa-1. The success so far has proven that the Albertine Graben contains an activepetroleum system and that oil can be trapped where interbedded reservoir andseal pairs are present. Future exploration plans include the testing,acquisition of further seismic in the north eastern portion of the permit afterreceiving the results of the current gravity survey and planning for thedrilling of further prospects onshore and offshore Lake Albert. TANZANIA (Hardman 50% equity and Operator, subject to farm in obligations) As announced on 24 March 2006, Hardman has farmed in to a production sharingagreement for the onshore and nearshore Tanzanian portion of the Ruvuma Basin,to earn a 50% interest in the Mtwara and Lindi licence areas from NdovuResources Limited (a subsidiary of Aminex plc). Hardman will be appointedoperator of the permits upon completion of the earning commitment, whichinvolves approximately US$3million of 2D seismic acquisition, and will providetechnical support during the seismic acquisition programme. The FarmoutAgreement and subsequent change of operatorship are subject to formal TanzanianGovernment approval. The Ruvuma PSA is located approximately 500 kilometres south of Dar es Salaam,along the Mozambique border. It covers a total area of 12,360 square kilometresover the onshore and adjacent nearshore, Tanzanian portion of the Ruvuma Basin.The area is adjacent to the Mnazi Bay gas field, discovered in the 1980's andcurrently under development. The area was last explored in the 1980's and priorto the recent activity less than 1,400 kilometres of 2D seismic had beenrecorded. Numerous leads have been identified by previous operators from thisdata, several with potential in excess of 100 million barrels. Initial targetswill be Tertiary and Cretaceous reservoirs expected at depths of 1,000 to 3,000metres. Oil seeps are known in the area. The onshore seismic survey is expected to comprise approximately 500 kilometresof data and is scheduled to be carried out during 2006 with a view to firming uptargets for the joint venture's first exploration wells in this area, to bedrilled in second half 2007. GUYANE (Hardman 97.5% equity and Operator) An application for a second five year permit term to commence 1st June 2006 wasdelivered to the authorities earlier this year 2006. The second period wouldextend the permit to 31 May 2011. Preparation continued during the quarter for the first exploration well inGuyane, and long lead items such as drill pipe have been ordered. Rigavailability in the prevailing tight market remains a key issue. Hardman expectsto be ready to drill by the end of 2006 although it is becoming increasinglylikely that drilling will not now commence until 2007. Hardman has engaged environmental specialists to conduct an EnvironmentalBaseline Study (EBS), followed by an Environmental Impact Assessment (EIA) fordrilling. These works will be conducted in accordance with French environmentalregulations. Field preparation for the EBS / EIA work commenced in late March;the work programme is necessarily extensive and will continue through toSeptember this year. This programme will provide a comprehensive understandingof environmental issues in this frontier region. Processing of the 2D and 3D seismic data acquired in late 2005 continued to theend of the quarter. As previously reported, this data was recorded over a numberof deepwater channel sand systems in the under-explored eastern portion of thelicence. The data is of high quality and the preliminary results are highlyencouraging, with geomorphology and fill similar to that of the Mauritanianincised channel systems. Farm-out discussions are in progress with a number of interested parties. A dataroom has been established in Trinidad, and farm in offers have been invited forthe end of quarter two. SURINAME ( Hardman 40%, subject to farm in obligations. Staatsolie operated ) As detailed in a separate announcement today, Hardman has agreed to acquire a40% working interest in the onshore Uitkijk and Coronie concessions in Suriname,South America. Hardman is now in the process of concluding final negotiation ofJoint Operating and Production Sharing Agreements and arrangements for a thirdparty potentially to participate in a small portion of Hardman's acquiredinterest. The concessions are both large and prospective, covering a total area ofapproximately 3300 km2, and lying directly adjacent to Suriname's main producingoil fields, Tambaredjo and Calcutta, which collectively have over 1 billionbarrels of oil in place and which produce approximately 13 mbopd. Hardman willearn its interest via the funding of an initial exploration campaign of up to 25wells capped at a maximum expenditure of US$8.5 million; drilling is anticipatedto commence in the 4th quarter of 2006. The Suriname acreage complements Hardman's existing exploration portfolio, beingprospective acreage but in a lower cost, lower risk environment, and forms partof a broader initiative within its selected Latin American focus area, as theconcessions are close to the existing large acreage position offshoreneighbouring Guyane. FALKLANDS (Hardman 22.5% equity, FOGL operated) During the quarter, acquisition of the approximately 6,125 kilometres 2D seismicsurvey continued. This survey is being acquired in conjunction with the seismicsurvey underway in neighbouring permits. Approximately two thirds of the datahad been acquired by 31 March 2006. The data from the current survey, along with the existing data acquired in 2004/2005, will be used to define prospects and select the location for additionalseismic, including a planned 3D seismic survey to define drillable prospects bymid 2007. OTHER AREAS During the quarter the Company completed the sale of its 100% interest inRetention Lease AC/RL1 which contained the Talbot Field, for a modest cash sum. The Company awaits confirmation from the relevant authorities that itsapplications to surrender in good standing each of AC/P25 and AC/P26 have beenaccepted SIMON POTTERMANAGING DIRECTOR Note: In accordance with Australian Stock Exchange Limited and / or AIM listingrequirements, the oil and gas reserves statements included in this Report arebased upon information compiled and reviewed by Hardman's Development Manager,Andrew Patterson, B. Eng. SPE a practising petroleum engineer with in excess offive years' technical upstream petroleum experience. HARDMAN RESOURCES LTD Level 1, 50 Kings Park Road West Perth Western Australia 6005 TELEPHONE FACSIMILE +61 (0) 8 9261 7600 EMAIL +61 (0) 8 9321 2375 WEB SITE office@hdr.com.au www.hdr.com.au Rule 5.3 Appendix 5B Mining exploration entity quarterly reportIntroduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001. Name of entityHARDMAN RESOURCES LTD ABN Quarter ended ("current quarter")------------------- ------------------98 009 210 235 31 MARCH 2006------------------- ------------------ Consolidated statement of cash flows ------------ ------------Cash flows related to operating activities Current Year to date quarter $A'000 (3 months) $A'000 ------------ ------------ 1.1 Receipts from product sales and related - - debtors 1.2 Payments for (a) exploration and evaluation (22,398) (22,398) (b) development (24,003) (24,003) (c) production (1,539) (1,539) (d) administration (3,679) (3,679) 1.3 Dividends received - - 1.4 Interest and other items of a similar nature 963 963 received 1.5 Interest and other costs of finance paid - - 1.6 Income taxes paid - - 1.7 Other (Income tax refund) 988 988 ------------ ------------ Net Operating Cash Flows (49,668) (49,668) ----- ----------------------- ------------ ------------ Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects - - (b) equity investments - - (c) other fixed assets (332) (332) 1.9 Proceeds from sale of: (a) prospects 1,350 1,350 (b) equity investments 2,787 2,787 (c) other fixed assets - - 1.10 Loans to other entities - - 1.11 Loans repaid by other entities - - 1.12 Other (provide details if material) (214) (214) ------------ ------------ Net investing cash flows 3,591 3,591 ----- ----------------------- ------------ ------------ 1.13 Total operating and investing cash flows (46,077) (46,077) (carried forward) ----- ----------------------- ------------ ------------ ----- ----------------------- ------------ ------------ 1.13 Total operating and investing cash flows (46,077) (46,077) (brought forward) ----- ----------------------- ------------ ------------ Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, 396 396 etc. (Net) 1.15 Proceeds from sale of forfeited shares - - 1.16 Proceeds from borrowings - - 1.17 Repayment of borrowings - - 1.18 Dividends paid - - 1.19 Other (provide details if material) - - ------------ ------------ Net financing cash flows 396 396 ----- ----------------------- ------------ ------------ Net increase (decrease) in cash held (45,681) (45,681) 1.20 Cash at beginning of quarter/year to date 120,824 120,824 1.21 Exchange rate adjustments to item 1.20 1,229 1,229 ------------ ------------ 1.22 Cash at end of quarter 76,372 76,372 ----- ----------------------- ------------ ------------ Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the relatedentities ------------- Current quarter $A'000 ------------- 1.23 Aggregate amount of payments to the parties included in 360 item 1.2 ------------- 1.24 Aggregate amount of loans to the parties included in item - ------ 1.10 ------------- -------------------------------- 1.25 Explanation necessary for an understanding of the transactions ------------------------------------------- Payments in item 1.23 are consulting and related costs (excluding GST) paid during the quarter to directors of the entity and their associates. ------------------------------------------- Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows -------------------------------------------- Nil -------------------------------------------- 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest -------------------------------------------- Nil -------------------------------------------- Financing facilities available Add notes as necessary for an understanding of the position. ------------- ------------- Amount available Amount used $A'000 $A'000 ------------- ------------- 3.1 Loan facilities 140,647 88,657 ------------- ------------- 3.2 Credit standby arrangements - - ----- ----------------------- ------------- ------------- Estimated cash outflows for next quarter $A'000 ------------------ 4.1 Exploration and evaluation 14,900 ------------------ 4.2 Development 8,017 ----- ----------------------------- ------------------ Total 22,917 ----- ----------------------------- ------------------ Reconciliation of cash------------------------- ------------- -------------Reconciliation of cash at the end of the quarter Current Previous(as shown in the consolidated statement of cash quarter quarterflows) to the related items in the accounts is asfollows. $A'000 $A'000 ----- ---------------------- ------------- ------------- 5.1 Cash on hand and at bank 25,332 33,500 ------------- ------------- 5.2 Deposits at call - - ------------- ------------- 5.3 Bank overdraft - - ------------- ------------- 5.4 Other (provide details) 51,040 87,324 ----- ---------------------- ------------- ------------- Total: cash at end of quarter (item 1.22) 76,372 120,824 ----- ---------------------- ------------- ------------- Other cash balances comprise amounts held on 30 day deposit. Changes in interests in mining tenements ------------- ---------- -------- -------- Tenement Nature of Interest at Interest reference interest beginning of at end of quarter quarter (note (2)) ------------- ---------- -------- -------- 6.1 Interests in mining ACR/L 1 - Timor Working 100% Nil tenements Sea relinquished, reduced or lapsed ------------- ---------- -------- -------- 6.2 Interests in mining - - - - tenements acquired or ------------- ---------- -------- -------- increased Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rightstogether with prices and dates. Total number Number quoted Issue price per Amount paid -------------- ---------- ---------- security (see up per note 3) (cents) security ----------- (see note 3 (cents) ----------- 7.1 +Preference - - securities (description) ---------- ---------- ----------- ----------- 7.2 Changes during quarter (a) Increases - - through issues (b) Decreases - - through returns of capital, buy-backs, redemptions ---------- ---------- ----------- ----------- 7.3 +Ordinary 659,138,095 659,138,095 - - securities ----- ----------- ---------- ---------- ----------- ----------- 7.4 Changes during quarter (a) Increases 360,000 360,000 $1.10 $1.10 through issues (b) Decreases ----- through returns of capital, buy-backs ----------- ---------- ---------- ----------- ----------- 7.5 +Convertible - - debt securities (description) ---------- ---------- ----------- ----------- 7.6 Changes during quarter (a) Increases through issues (b) Decreases ----- through securities matured, converted ----------- ---------- ---------- ----------- ----------- Exercise price Expiry date 7.7 Options 2,445,000 - $1.10 31/12/06 (description and conversion factor) ---------- ---------- ----------- ----------- 7.8 Issued during - - - - quarter ---------- ---------- ----------- ----------- 7.9 Exercised 360,000 - $1.10 31/12/06 during quarter - ---------- ---------- ----------- ----------- 7.10 Cancelled - - - - ----- during quarter ----------- ---------- ---------- ----------- ----------- 7.11 Debentures - - (totals only) ----- ----------- ---------- ---------- 7.12 Unsecured - - notes (totals only) ---------- ---------- Compliance statement 1 This statement has been prepared under accounting policies which comply withaccounting standards as defined in the Corporations Act or other standardsacceptable to ASX (see note 4). 2 This statement does give a true and fair view of the matters disclosed. Sign here: .............................................. Date: ................ Company Secretary Print name: RICHARD OSHANNASSY Notes 1 The quarterly report provides a basis for informing the market how theentity's activities have been financed for the past quarter and the effect onits cash position. An entity wanting to disclose additional information isencouraged to do so, in a note or notes attached to this report. 2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect ofinterests in mining tenements acquired, exercised or lapsed during the reportingperiod. If the entity is involved in a joint venture agreement and there areconditions precedent which will change its percentage interest in a miningtenement, it should disclose the change of percentage interest and conditionsprecedent in the list required for items 6.1 and 6.2. 3 Issued and quoted securities The issue price and amount paid up is notrequired in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluationof Mineral Resources and AASB 107: Cash Flow Statements apply to this report. 5 Accounting Standards ASX will accept, for example, the use of InternationalAccounting Standards for foreign entities. If the standards used do not addressa topic, the Australian standard on that topic (if any) must be complied with. == == == == == This information is provided by RNS The company news service from the London Stock Exchange