Hardy sends mixed signals with half-year results

Vol 16, PW 4 (06 Sep 12) People & Policy

Hardy Oil & Gas is pinning its hopes on Reliance’s future drilling plans at deepwater block KG-DWN-2003/1 (D3) in an otherwise bleak outlook for the India-focused UK-listed company.

In half-yearly results published August 30, Hardy said operator Reliance would drill a fifth exploration well at D3 in the first half of next year (2013). “In April 2012 the D3 joint venture submitted a revised proposal for the Dhirubhai-39 and 41 gas discoveries,” says Hardy.

“The proposed development plan provides for a dry gas, sub-sea cluster development with the flexibility to add in additional zones and future area discoveries.” That’s where the good news ends.

Hardy blames the continued ‘shut-in’ at PY-3 and a decision to relinquish KG-DWN-2001/1 (D9) for a $7.2m loss. “Hardy is dying a slow death,” jokes an analyst.

“It has $30m in the bank but that won’t last long after a few D3 wells.” Hardy’s announcement its London office is re-locating to Aberdeen and speculation its might further downsize its 22-strong Chennai office are likewise discouraging.

“Aberdeen is hardly a hotbed of India activity,” we hear. “It doesn’t take a genius to see they might be looking at a North Sea opportunity to bring in assets from outside India.

” Even Hardy’s announcement that Reliance will submit a development plan for the Dhirubhai-33 discovery at GS-01 fails to excite. “I can’t see how GS-01 is high on Reliance’s ‘to do’ list,” we hear.

Yet Hardy is upbeat, particularly on PY-3. “Considerable progress was made during a recent meeting in Delhi,” Hardy tells.

“We do not anticipate a further staffing reduction (in Chennai) and we will evaluate possible staff additions once we have secured PY-3 partner and DGH approval to re-start production.”

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