OperatingCashFlows Chinguetti

15 May 2006 11:23

Hardman Resources Limited15 May 2006 STOCK EXCHANGE / MEDIA RELEASE RELEASE DATE: 15 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: OPERATING CASH FLOWS CHINGUETTI Hardman Resources Limited ("Hardman") provides the following update in respectof the Woodside operated Chinguetti oil field, offshore Mauritania. As Hardman has previously announced, production from the field averaged 66 mbopdfor the month of March and 53 mbopd for April 2006. Production for the period 1May to 10 May 2006 has averaged 45 mbopd. The Operator has reported that the principal reasons for the lower productionare the minimal contribution from the two production wells in the northern partof the field and gas and water management issues. The failure last week of a gascompressor onboard the FPSO, Berge Helene, will further delay the commissioningof gas re-injection to the Banda field and therefore resolution of facilitiesgas handling issues, as well as the availability of gas lift to supportproduction. Production from Chinguetti is not expected to increase significantly from thepresent level until well intervention and/or additional drilling takes place.Such remedial actions are currently anticipated by end of the third quarter orbeginning of the fourth quarter 2006. Optimally configured wells or sidetracksshould add potential of at least 10 mbopd per well in the southern sector of thefield and 5-10 mbopd in the northern sector. Plans for even earlierintervention, including sourcing additional completion equipment, are currentlybeing evaluated though would have the effect of delaying the commencement of the2006 Mauritanian exploration campaign. The current production issues do not impact on estimates of oil in place norlikely ultimate recoverable reserves, though additional investment may berequired to access those reserves. Anticipated operating cashflows from Mauritania will remain robust given highcurrent oil price realisations despite the lower production from Chinguetti. Hardman will update the market of any material change as it is advised by theOperator. All production figures reported above are gross. SIMON POTTERMANAGING DIRECTOR This information is provided by RNS The company news service from the London Stock Exchange