MOU signed with Ugandan Gov't

11 Oct 2006 07:00

Hardman Resources Limited11 October 2006 STOCK EXCHANGE / MEDIA RELEASE RELEASE DATE: 11 October 2006 AUSTRALIAN CONTACT: Peter Thomas Hardman Resources Limited +61 8 9261 7600 LONDON CONTACT: Patrick Handley Brunswick Group +44 207 404 5959 RE: MOU SIGNED WITH UGANDAN GOVERNMENT PAGES: 1 Hardman Resources Limited through its wholly-owned subsidiary Hardman PetroleumAfrica Pty Ltd (collectively "Hardman"), operator of the Block 2 Joint Venture,is pleased to announce that the Government of the Republic of Uganda ("theGovernment"), Hardman and its co-venturer Tullow Oil plc, have signed aMemorandum of Understanding ("MOU") relating to future investment plans andlicence obligations for Block 2. The MOU includes commitments by both the Joint Venture and the Government toadvance appraisal and development activities to realise the full potential ofthe existing Block 2 discoveries and provide time for the continuing activeexploration of the remainder of the block. The next well in the 2006 exploration programme is Nzizi-1, an up dip appraisalwell to the south west of the Mputa discovery which is anticipated to spud byearly November. The Joint Venture will also undertake further 3D and 2D seismicsurveys to define the volumes of the existing discoveries better, develop infilllocations, as well as to explore the northern area of the block to identifyprospects for drilling in 2007 and 2008. In addition, the Joint Venture willcontinue to evaluate the most effective manner to drill offshore prospects inLake Albert by the end of 2007. In parallel with these exploration and appraisal activities, the Joint Ventureand Government have also agreed to review the early development potential ofhydrocarbons already discovered by commencing concept studies for an EarlyProduction System (EPS). This will determine the commercial and technicalfeasibility for early production. Any such development could initially compriseproduction and processing facilities to fuel a local power station (of around50MW capacity) and potentially also supplying a mini-refinery. Simon Potter, CEO & Managing Director of Hardman Resources, commented: "We appreciate the Ugandan Government's strong support for our operations sincethe oil discoveries at Waraga and Mputa. Confidence in the existing resourcebase and the market potential allows us to consider an Early Production Scheme.Further success in the planned exploration programme could lead to significantexpansion of domestic plans or an export option. We look forward to continuingto work closely with the Government to commercialise the oil found in Uganda tobenefit all stakeholders." Joint Venture Equities in Block 2 are: Hardman Petroleum Africa Pty Ltd (Operator) 50%Tullow Oil plc 50% Times and dates for Ugandan wells refer to Uganda time (GMT+3 hours), five hoursbehind Western Standard Time (Perth). Peter ThomasChief Financial Officer This information is provided by RNS The company news service from the London Stock Exchange