RNS Number:5861T
Hardman Resources Limited
23 December 2003

HARDMAN RESOURCES LTD

Ground Floor, 5 Ord Street, West Perth

PO Box 869, West Perth

Western Australia 6872

Tel: +61 8 9321 6881 Fax: +61 8 9321 2375

ABN 98 009 210 235





STOCK EXCHANGE / MEDIA RELEASE



RELEASE DATE:               23 December 2003

CONTACT:                    Ted Ellyard (08 9321 6881)

RE:                         OPEN BRIEFING - EXTENT OF TIOF DISCOVERY


Enclosed is an Open Briefing with Managing Director Ted Ellyard, which has been
prepared by Corporate File for immediate release.


SCOTT SPENCER

DIRECTOR




                           Lodgement of Open Briefing



Hardman Resources Ltd

Ground Floor

5 Ord Street

West Perth  WA  6005









Date of lodgement:   23-Dec-2003



Title:   Open Briefing. Hardman. MD on Extent of Tiof Discovery



Record of interview:



corporatefile.com.au

Hardman Resources Limited recently completed a successful step-out exploration
well, Tiof West, located approximately 8 kms from the Tiof-1 oil and gas
discovery.  Can you describe the extent and shape of the Tiof structure and the
nature of the hydrocarbon accumulation?



Managing Director Ted Ellyard

The Tiof structure comprises a Miocene aged elongated sandstone channel system
which has been uplifted.  It forms a broad structural feature that is about 3
kilometres wide and several kilometres long in an east-west direction. The
actual Miocene channel system (or Canyon) extends for over 30 kilometres and is
a slightly smaller version of the Chinguetti-Banda channel system which extends
for over 50 kilometres.



The field is primarily a large oil field with a small gas cap encountered in
Tiof-1 which was drilled near the structural crest.  We were very pleasantly
surprised with the 122 metre oil column encountered in the Tiof West well.  We
were aiming to test the possible edge of the oil accumulation encountered in the
Tiof-1 well and we were expecting only a thin oil column near the oil-water
contact but encountered an additional 100 plus metres of oil beyond what we
expected.



corporatefile.com.au

Is it possible the structure extends further west than Tiof West?



Managing Director Ted Ellyard

Yes, it may extend a few kilometres further to the west.



corporatefile.com.au

How large is Tiof in comparison with the Chinguetti Oil Field, which you're now
moving to development?



Managing Director Ted Ellyard

We now believe the Tiof Field is much larger than the Chinguetti Field which we
have previously reported to have a mean reserve size of 142 million barrels
recoverable as estimated by Hardman's technical staff.  We now consider that the
Tiof Field has an area closure of about 54 square kilometres, which is between 4
to 5 times larger than the area of Chinguetti.



However, the Tiof structure is a broader feature with a total gross oil column
of about 214 metres from the top of the oil column in Tiof-1 to the lowest
sampled oil sand in the Tiof West well. On this basis our technical staff
estimates that the Tiof Field could contain between 300 to 400 million barrels
of recoverable oil. However, it is too early to make a definitive P50 estimate
as we will need to fully evaluate the 3D seismic data and drill 2 or possibly 3
appraisal wells in 2004 to define the limits of the field and potential
development plans.



corporatefile.com.au

Can you talk a little bit more about reservoir quality and the likely production
rates from Tiof?



Managing Director Ted Ellyard

The reservoir sands in Tiof are very similar to those in the Chinguetti Field,
which has a net to gross reservoir ratio in the 4 wells of between 25% and 40%.
Reservoir quality in the sands varies depending on whether the well has
intersected a channel centre or the more shale prone flanks of the channels. We
would expect the good quality sands (which we did intersect over portions of
both Tiof wells) to flow oil at very high rates, again similar to Chinguetti,
where the last well (October 2003) flowed at rates of over 15,000 barrels of oil
per day.



The good news is that we can confidently identify the channel centres from the
seismic data and so drill the production wells in the best producing zones.



corporatefile.com.au

If Tiof is commercial, how will it affect your development schedule for
Chinguetti?  For example, you presumably want to secure major infrastructure
items soon for Chinguetti but you now potentially have the additional task of
sizing the infrastructure for two fields?



Managing Director Ted Ellyard

It is too early yet to consider Tiof commercial but we are obviously very
optimistic.



In the case of Chinguetti we are well down the road to making a final
development decision early next year and then fast tracking the development
phase to achieve first oil production in the second half of 2005.



We see Tiof as likely to be large enough for a "stand alone" or separate
platform development. Tiof would therefore require separate infrastructure to
Chinguetti although there would be shared benefits from having two production
platform hubs. If the appraisal drilling and studies on Tiof next year are
positive we will be able to use the experience from Chinguetti and the same
Woodside development team to fast track the Tiof development to achieve first
oil possibly 12 to 18 months behind Chinguetti, that is, end 2007.  The
resulting economic benefits of a second production development in Mauritania
would be very significant to Hardman.



corporatefile.com.au

Tiof is the third discovery in the Miocene channel sands, following Chinguetti
and Banda whereas the recent unsuccessful Poune well targeted the Upper
Cretaceous channel sands.  What was the problem with the Poune well and what
will be the focus of drilling activity in 2004?



Managing Director Ted Ellyard

The problem with the Cretaceous sand targets drilled by the Poune well was the
lack of good reservoir quality sands which could achieve the high production
rates necessary for deep water development, despite oil shows being present at
these deeper levels. Woodside as the operator was keen to prove a deeper
commercial oil system, but we now need to study the Cretaceous sand distribution
further using the extensive 3D seismic data, before committing any further
drilling funds to these prospects.



I believe that next year the Joint Venture will concentrate on the numerous
Miocene drilling targets already defined within the central Area A & B licence
areas where we know the Miocene play works and we can now accurately identify
the hydrocarbon response on the 3D seismic.



The joint venture hasn't yet discussed the number of wells planned for drilling
in 2004 but I expect we will agree to drill two or more exploration prospects in
the two productive Miocene fairways defined by the Chinguetti-Banda and Tiof
discoveries. Also, I expect we will agree to an appraisal drilling programme for
Tiof, together with a second rig to drill the Chinguetti production wells.



corporatefile.com.au

Do you still believe in the non-Miocene plays in Mauritania?



Managing Director Ted Ellyard

I'm an optimist or I wouldn't be in this business so yes I do believe we will
find commercial oil and gas in the non-Miocene plays. However, we need to reduce
the risk level for the other non-Miocene plays before drilling those instead of
Miocene targets which now have a very high chance of success, although I
wouldn't call it 100% yet, despite the 3 out of 3 success rate we have achieved
for the Miocene so far.



corporatefile.com.au

You're nearing the completion of another drilling season in Mauritania.  How
have the results altered your view on Hardman's Mauritanian acreage?  How much
remains to explore and what's a reasonable expectation for discoveries over the
next few years?



Managing Director Ted Ellyard

The success in the two Tiof discovery wells is a great achievement as it has
proven that the Miocene play is not confined to the Chinguetti-Banda canyon
system and we can now target other Miocene channel systems.



Of great importance is the potential size of the Tiof Field which, if larger
than Chinguetti, will be very profitable and indicates that we can possibly
expect larger field sizes and perhaps several fields along the same Miocene
canyon system which could be connected to one large platform, thereby further
improving the economics. Much more work now needs to be done to define other
Miocene channel systems and we can expect to have several targets to drill each
year over the next 4 to 5 years.



      The successful production testing of the Chinguetti 4-5 early development
well, which achieved flow rates of over 15,000 bopd, was also a significant
milestone and has proven that the Miocene sands can produce at very high rates.
This success has provided confidence in the development plan for Chinguetti and
we expect the joint venture to make a decision early in the new year to proceed
to development.



      We are still drilling at the Pelican well in the Dana Petroleum operated
Block 7 area, 150 kms to the north of Chinguetti. Any success here would open up
the potential of the northern parts of the deep water basin. This prospect is
higher risk than in the proven central areas operated by Woodside, but it would
be a nice Christmas present if we could at least identify good oil shows in the
target sands in the Pelican well. However, regardless of the outcome of the
Pelican well I am very satisfied with the 2003 drilling programme results.



corporatefile.com.au

The Operator of some of Hardman's Mauritanian permits, Woodside, is more
conservative with its comments about the discoveries.  Hardman is an emerging
oil company, moving from small producer/explorer to a potentially significant
oil producer/explorer and is naturally keen to talk about its major asset.
While both approaches are understandable, how do you balance your comments with
the more conservative stance of your joint venture partner?



Managing Director Ted Ellyard

We have a strong working relationship with the Woodside Mauritania team and
actually share a lot of ideas, which is made easier with both companies being
based in Perth. As Hardman is a much smaller company than Woodside, the stock
exchange reporting requirements for Hardman are more demanding due to the
differing levels of materiality. Generally, we try to provide more information
in our announcements, while still respecting the joint venture confidentiality
requirements. In some cases we have released reserve figures based on our best
technical estimate ahead of Woodside, as we believe this information is material
to our shareholders. Woodside is often more conservative in its statements
particularly with regard to reserves. However, it would seem that given
sufficient time for Woodside to undertake the technical work it requires to
satisfy its internal checks and controls it has eventually announced a similar
reserve range to Hardman's earlier estimate.



corporatefile.com.au

Hardman's continuing success in Mauritania will require larger funding to
develop more projects and also, presumably, to finance a larger exploration
budget.  You've also just announced that you've bought additional equity in PSC
Area B (now 33.2%, up from 21.6%), which contains Chinguetti and Tiof, and
additional equity in PSC Area A (now 37.4%, up from 24.3%), which contains
Banda.  What is your funding strategy?  Will you raise additional equity or debt
or sell down assets?



Managing Director Ted Ellyard

As announced last week we are finalising a corporate loan with the ANZ London
team for US$26 million to undertake the purchase of our share of the Agip/ENI
interest in these two core PSC areas.



We are also well advanced on the Chinguetti project financing which can be
applied proportionally to our original 21.6% or our larger equity of 33.2%.



However, we would have greater funding requirements for the exploration and
appraisal drilling programmes in 2004 with the larger equity and therefore will
need some additional funding by mid 2004 when the drilling programmes are
expected to get underway. We now have several options for this funding and will
decide over the next 2 to 3 months whether to sell down a portion of the
additional equity (obviously at a more favourable price than the Agip
transaction) or to raise capital via the debt or equity markets.



corporatefile.com.au

Hardman will pay about US$21 million plus adjustments to increase its equity in
PSC Areas A and B.  Woodside described the purchase price as attractive.  What
supports this view?



Managing Director Ted Ellyard

We were extremely pleased to be able to increase our equity in the two core
licence areas at such an attractive price. It was fortunate that the original
Agip transaction was negotiated some months ago and before the successes of the
2003 drilling programme were known. We therefore have the benefit of buying the
additional interest at a price negotiated without the confirmed high production
rates for the Chinguetti Field and of course the large discoveries in the Tiof
and Tiof West wells. If we consider that we now have three significant
discoveries with potential oil reserves totalling in excess of 400 million
barrels then it is easy to arrive at a much higher value than what we paid for
the Agip equity.





corporatefile.com.au

Hardman's exposure to Mauritania now clearly outweighs the rest of its
portfolio.  How can you mitigate the political risk in Mauritania?  What's the
attitude of overseas investors, compared with Australian investors, to offshore
African assets?



Managing Director Ted Ellyard

We are very comfortable with the political risk of Mauritania which enjoys a
democratic and stable government that is pro-resource development. This view is
certainly shared by Woodside and the commercial banks and IFC (World Bank).



In November 2003, President Taya was re-elected by a 66% majority in
presidential elections which were described as open and fair by US observers. I
would expect the Mauritanian economy to continue the strong growth rate and
improvement that it has enjoyed continuously over the past 10 years.



It is true that overseas investors, particularly in the UK where Hardman is
listed, are more familiar with resource investments in Africa compared to
Australian investors. This is probably why Hardman has been consistently trading
at a premium in London compared to our Australian share price for the past few
weeks. However, I believe that Australian investors are becoming more familiar
with overseas resource projects and in particular with Mauritania.  Woodside has
recently stated that Mauritania is one of its main growth areas.



corporatefile.com.au

Thank you Ted.
--------------------------------------------------------------------------------

For previous Open Briefings by Hardman Resources visit www.corporatefile.com.au



For further information on Hardman Resources visit www.hdr.com.au












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