FINN (COM) Daily Record for 10 September 2003

Compiled by J. Brock (FINN)

COURT NEWS:

There are three cases before Magistrates John Fowler and Marj McPhee in Summary Court this morning. It’s the first date for Terrance Mills, who is up on two charges. They are of procuring and consuming intoxicating liquor whilst a prohibition order is in place. It’s also the first date for Rachael Hobday who is up on a charge of driving a vehicle without due care and attention, and also Alhandro Igao for drink driving.

FIODA:

Are you FIODA’s next budding actor or actress? The Organisation will be holding a general meeting on Monday, 15 September. The meeting is being held in the Chamber of Commerce and is to decide on the Association’s next production. It’s thought that it could be a panto, which will be staged in December. Chairman, Norman McGregor Edwards, hopes that as many people as possible will come along, whether they are regular FIODA members or just vaguely interested in amateur dramatics. 21442 will get you more info.

COMMITTEE MEETINGS:

Don’t forget there are a number of Committee meetings taking place this week. Today’s meeting is the Fisheries Committee meeting, which took place at 0900 on Wednesday in the Liberation Room.

(100X Transcription Service)

"A" Press: 10 September 2003

News over the last three days has been dominated by the crucial negotiations between Argentina and the IMF for a new financial aid package. Yesterday and today the papers have been reporting that Argentina has refused to pay the IMF a debt of just over 2 Billion dollars that fell due yesterday, unless there is an agreement with the IMF. America is reported to be looking on the prospect of an agreement favourably, but there isn't one yet. The Stock Market fell 3.3% as a result of all this.

Other news is largely about various provincial elections.

(100X Translation Service)

The Falkland Islands are located in the South Atlantic approximately 500 kilometres east of South America at around 52 degrees latitude (equivalent to southern England). The Falklands are a dependency of the United Kingdom but are administered by the Legislative Council of the Falkland Islands which also governs the exploration and production of petroleum.

Hardman holds a 30% interest in a joint venture that has been awarded a large offshore exploration permit covering ten licence blocks, with a total area of approximately 57,000 square kilometres, in the South Falklands Basin. The licences are situated to the south and east of the Falkland Islands and have been granted by the Government of the Falklands in accordance with "open-door" legislation introduced in 2001.

The South Falklands Basin, where Hardman's licences are located, is distinct geographically and geologically from the northern basin which was the focus of exploration activity during 1996-98. The southern basin is under-explored and is covered by a grid of seismic dating from 1993 and totalling almost 8,000 kilometres. This basin has analogies with the Malvinas and Magallanes Basins in Argentine waters to the west of the Falklands, where a well drilled by Exxon in the early 1980s flowed 3,200 barrels of oil per day, demonstrating the existence of a nearby working petroleum system.

The permit has been awarded for an initial three year period during which the Joint Venture will reprocess existing seismic data, followed by acquisition of new seismic data to further delineate leads identified. At the end of this period, all or part of the permit area may be renewed for a further three year period during which drilling of one or more wells will be required.

© Copyright 2003 Hardman Resources. All Rights Reserved.

Mauritania is located on the northern Atlantic coast of West Africa between Morocco and Senegal. The country is largely arid and has a population of about 2.7 million. Mauritania gained independence from France in 1960 and now has a multi-party political system with an elected Presidency and two houses of parliament. The country presently has no oil and gas production, although it is one of the few countries in West Africa with refining capacity. Formal diplomatic relations with Australia were established in late 2001.

Since 1998,Woodside has shot two large seismic surveys over the Joint Venture areas at a cost exceeding A$50 million, including a total of 3,580 square kilometres of 3D seismic acquired during 2000. Initial exploration interest was focused in the deep water portion of Blocks 3, 4 and 5 (Areas A and B) where mature source rocks, turbidite sand reservoirs and salt dome anticlines were identified from the 2D seismic data. In addition a small 3D seismic survey was acquired in Block 6. All of this work was undertaken as part of Woodside and Agip's farmin obligations. The drilling of the Chinguetti-1 and Courbine-1 wells by Woodside and Agip during 2001 completed the farming obligations for Joint Venture Areas A and B with Hardman retaining an interest of 24.3% and 21.6% respectively. The first well, Chinguetti-1 was a significant oil discovery which intersected a 120 metre gross oil column in basal Tertiary sandstones ("A Sand") overlying a salt structure. The second well, Courbine-1 targeted Upper Cretaceous sandstones in a broad structural closure. Gas shows were encountered in the well, but the main target sandstones were water wet. The wells were drilled in 805 and 1,250 metres water depth respectively.

The 2002 Mauritania drilling campaign commenced on 30 July 2002 and was completed in early November 2002 with three highly successful wells out of the four wells drilled. The well results are summarised as follows:

• Chinguetti 4-2 Appraisal Well: encountered a 94 metre gross oil column on the northern (upthrown) flank of the salt structure.
• C-4-3 Banda Exploration Well: encountered a 110 metre gas column underlain by 24 metre gross oil column, confirming a new oil and gas discovery.
• Chinguetti 4-4 Appraisal Well: encountered a 114 metre gross oil column on the downthrown side and confirmed an oil column from drilling of at least 280 metres.
• C-6-1 Thon Exploration Well: unsuccessful well after encountering only minor oil and gas shows within low quality reservoir sands.

The Chinguetti Oil field is a typical salt dome structure with a vertical relief at the target depth of over 300 metres. The primary oil zone is contained within Miocene aged deep water turbidite sandstones which were deposited prior to the salt uplift. The structure is faulted with a downthrown southern flank (Chinguetti-1) and an upthrown northern flank, tested by Chinguetti 4-2.

The second Chinguetti well (C-4-2) encountered a 94 metre oil column. This well confirmed that the oil extends across the entire structure and provided confidence that Hardman's earlier estimate (2001) of 110 MBO was reasonable.

The third well (C-4-4) was drilled on the downthrown side and encountered 114 metre oil column which included an additional 69 metres of oil below the lower limit predicted from the 3D seismic. The total oil column height on the downthrown block confirmed by drilling the two wells (C-1 and C-4-4) is 280 metres. These drilling results are still being evaluated and correlated with the seismic data, however Hardman expects that the reserve estimate will be revised upwards on completion of this work in February/March 2003.

Excellent quality reservoir sands have been encountered in all three wells with a net to gross pay ratio of between 25% to 40%. A production flow test was undertaken on a 10 metre sand interval in the Chinguetti 4-2 well. The test flowed oil at rates up to 1,560 barrels per day through a 30/64" choke. The production rate was restricted by sand inflow from the reservoir, however pressure data from the test provides confidence that the well is capable of producing at much higher rates. Sand inflow is common in highly porous sands and can be controlled by using sand screens and gravel pack techniques in the production wells. Preliminary field development models have used a Chinguetti field production rate of 75,000 barrels per day as the initial production rate from possibly five wells.

A development team has been working on the Chinguetti project in Agip's office in Milan, Italy for the past six months and is aiming to complete a field development plan by April/May 2003. The Joint Venture will then review and approve this plan to reach a development decision by mid 2003. The next step would be the issue of tender documents by September 2003 for the platform, development drilling and other capital equipment. Work could be expected to start during 2004 with completion and first production planned for 2005 or early 2006. The timetable for start of production will be greatly influenced on whether the production platform (FPSO) is to be leased or purchased. This decision and its impact on the timing of first oil production will become clearer in April/May 2003.

Banda Oil & Gas Discovery: The C-4-3 Banda well encountered a 110 metre gas column and a 24 metre oil column. Approximately 75% of the Banda structure is situated in PSC Area A (Hardman 24.3%) and 25% in PSC Area B (Hardman 21.6%).

The actual commerciality of Banda will depend on the results of the two appraisal wells planned for 2003. At this stage, Hardman is greatly encouraged and considers that Banda is a large hydrocarbon accumulation. The 24 metre oil column could potentially represent between 80 to 100 million barrels (MBO) recoverable if the oil extends across the entire structure. Alternatively, the oil column could be much thicker in other parts of the field when the appraisal wells are drilled.

If a significant oil reserve is proven at Banda, it would probably be commercial due to the fact that it is only 20 kms from Chinguetti. If the reserve is less than 100 MBO then the Banda oil will probably be tied into the Chinguetti platform, thereby improving the economics of both projects. If the Banda field contains in excess of 100 MBO then it is likely that it will be a separate platform development. In either case it is likely that the oil will be produced first before the large gas resource is developed.

Block 6: The C-6-2 Thon well was drilled as the fourth well in the 2002 drilling programme. The well was drilled to a depth of 3,294 metres and abandoned after encountering only minor oil and gas shows in low quality reservoir sands. Although the result was disappointing, this well provides valuable information which is being studied to identify future exploration targets in the Block 6 area.

Prior to the well spudding, Hardman reduced its interest to 22.42% under the terms of a farmout agreement with Petronas Carigali, the Malaysian state oil company. As a result of this agreement and a previous farmout agreement with Woodside, Hardman was free carried through the entire cost of drilling the C-6-2 Thon well.

Following joint venture meetings in December, it has been agreed that 2D seismic will be acquired during 2003 to further define potential leads and new play types in the block.

2003 Drilling Plans: Several days of joint venture meetings were held in December 2002 on the Woodside operated areas. Up to five wells will be drilled in PSC Areas A and B during the 2003 programme. These include two firm exploration wells and three contingent wells (including the two Banda appraisal wells). In addition the partners will need to decide by April on whether to drill one well in Block 2 during 2003.

Following the 2002 drilling success, the most exciting and lowest risk prospects are the Miocene sand prospects close to Chinguetti and Banda. Hardman expects at least one well will target this play. However, many prospects were defined by the extensive 3D seismic acquired in 2000 and 2002 and considerable technical work needs to be completed by second quarter 2003 before the final drilling prospects can be agreed by the joint venture.

The Dana Joint Venture comprises three PSC areas which are situated immediately to the north and south of the Woodside/Agip acreage. Under the terms of the Joint Venture, Dana Petroleum plc ("Dana") is operator, while Hardman has an 18% interest in all blocks.

Block 1: The 3D seismic survey covering 1,330 square kilometres was completed during the last quarter of 2002. Processing of the data is being fast-tracked and a preliminary version of the data will be available by February 2003 to enable interpretation work to commence. The joint venture will need to commit by June 2003 to drill the first well in the Block.

Block 7: Interpretation of the 3D seismic acquired in early 2002 has identified a large prospect with multiple reservoir targets. The joint venture partners are in discussion on the well commitment, joint venture equity and timing to drill this prospect during 2003 and a decision is expected in February/March 2003.

Block 8: Block 8 is different from the rest of the Mauritanian offshore acreage as it includes carbonate platforms and reefs of Late Cretaceous to Palaeocene age. Interpretation work is continuing with an emphasis on understanding the carbonate seismic stratigraphy to identify potential reservoir and seal facies necessary to establish a drillable prospect. A decision to drill or surrender the permit will be required by June 2003.

© Copyright 2003 Hardman Resources. All Rights Reserved.

Uganda is a landlocked country bounded by Kenya to the north, the Democratic Republic of the Congo to the west and Tanzania and Rwanda to the south. Formerly a British colony, Uganda retained English as the official language when independence was granted in 1962. After a period of political unrest in the 1970s and early 1980s, democracy was restored and the country now enjoys stability.

Hardman is the Operator with a 50% interest in a Production Sharing Agreement ("PSA") over Block 2. The block covers an area of approximately 4,700 square kilometres over the northern part of Lake Albert in north-western Uganda. The area is under-explored with only one well having been drilled on the shores of Lake Albert in Block 2 by Shell in 1938, which encountered oil shows. The presence of a thick sedimentary sequence in the graben, well-documented oil seeps along the edge of the lake and information from gravity and magnetic surveys provide encouraging indications of the area's petroleum potential.

Preparations are continuing for the acquisition of a 2D seismic survey over Lake Albert. The survey is expected to comprise approximately 1,500 kilometres with about 65% to be shot in the Hardman PSA area. Both the joint venture partners and the government authorities have approved the survey programme which is now expected to commence in the first quarter 2003.

© Copyright 2003 Hardman Resources. All Rights Reserved.

BIRTHDAYS AND ANNIVERSARIES:

Patrick Lurcock (11^th)

Bonnie Curtis (11^th)