Hardman Resources Limited
04 March 2004
STOCK EXCHANGE / MEDIA RELEASE
RELEASE DATE: 4 March 2004
CONTACT: Ted Ellyard (08 9321 6881)
RE: ARC PURCHASES HARDMAN'S PERTH BASIN ASSETS
ARC Energy Limited ('ARC') and Hardman Resources Ltd ('Hardman') are pleased to
announce that ARC has purchased Hardman's Perth Basin assets under a Sale and
Purchase and an Option agreement.
Under the Sale and Purchase Agreement, Hardman has sold the majority of its
Perth Basin interests to ARC. The interests comprise the following:
• 10.376% interest in EP 413, including the Jingemia oil field;
• 22.5% interest in EP 368
• 30% interest in TP/15
• 75% interest in L4/L5/PL6 including the Woodada gas field
• 100% interest in the Logue drilling rig
The consideration for these interests is a cash payment of A$7,644,000 plus
potential future payments up to a total of $1,500,000 if production from the
Woodada Gasfield exceeds certain levels.
Hardman's remaining 12% equity in EP 413 (Jingemia) has also been made subject
to a put and call option arrangement such that Hardman can require ARC to
purchase the interest and ARC may require Hardman to sell the interest to ARC
for an agreed amount. Under the terms of this agreement, ARC will acquire the
interest no later June 2005.
The sale of the assets to ARC is conditional on required joint venture, third
party and regulatory approvals, however, under the sale and purchase agreements,
ARC has assumed effective control of the assets as of today.
Commenting on the purchase, ARC's Managing Director Mr Eric Streitberg said:
'This acquisition completes the current phase of ARC's carefully considered
strategy of consolidating its strategic position in the Perth Basin. With this
purchase, ARC now has interests in all of the producing fields in the North
Perth Basin and operates the majority of them.
It has substantially diversified both our oil production base with the
additional equity in Jingemia and our gas customer base with the purchase of the
Woodada gasfield. This purchase will also allow us to pursue our portfolio
approach to exploration more effectively.
The acquisition will be funded from a combination of cash on hand and draw down
of our $10 million working capital facility and is forecast to be cash flow and
EPS positive subsequent to the development of the Jingemia oil field which is
We are delighted to have been able to work with Hardman to complete this
acquisition in such a short time fram. We will now get down to the business of
adding value through the drill bit and enhancing the value of the existing
production businesses after a great year which has seen us consolidate our
position in the basin and deliver a series of record profits.'
Commenting on the sale, Hardman's Managing Director Mr Ted Ellyard said:
'Hardman is pleased to have achieved this rationalisation of its Australian
assets, which will enable the Company to focus its efforts on those areas where
maximum value can be added. Since it acquired the original interests in the
Perth Basin in mid-2001,the Company has had a high success rate in discovering
large oil and gas reserves in offshore Mauritania. The recent sale of an
interest in Mauritania to British Gas shows clearly how the value of this area
can rapidly appreciate. Hardman needs to be able to direct its technical and
commercial resources to managing and further enhancing this asset.
In addition, the Timor Sea has recently come to the fore as an area which
Hardman believes has the potential to host larger petroleum reserves than the
Perth Basin, and is therefore considered more suited to Hardman's exploration
style and capabilities. This Perth Basin sale will free up manpower and increase
cash reserves to improve Hardman's ability to take advantage of opportunities in
its Timor Sea acreage. The same applies to Hardman's large scale international
exploration projects, some of which are nearing the drilling stage where
important technical and commercial decisions need to be taken.
Both parties will benefit from this transaction, which has been largely possible
because of the cooperative relationship which has existed between the two
companies for some time. We consider ARC to be particularly well qualified to
manage and exploit these assets, and we wish them well in their future Perth
Basin exploration and production activities.'
For further information please contact either:
Mr Ted Ellyard Mr Eric Streitberg
Managing Director Managing Director
Hardman Resources Ltd ARC Energy Limited
Note: In accordance with Australian Stock Exchange Limited listing requirements,
the geological information supplied in this report has been based on information
provided by geologists who have had in excess of five years experience in their
field of activity.
This information is provided by RNS
The company news service from the London Stock Exchange