Finds cheer Hardy Oil

24/09/2007 Robert Tyerman

Despite falling interim sales and profits, Hardy Oil & Gas is bullish after two discoveries in India.

Pre-tax profits at Isle of Man-based Hardy dropped 68 per cent to £1.4 million in the half-year to June on turnover down 41 per cent to £3.5 million. The AIM-listed company blames a 16.3 per cent fall in output from the PY-3 field in the Cauvery Basin of Eastern India, a fall in sale prices from $65.3 (£32.3) to $62.8 a barrel and an increase in the Indian Government's profit take.

However, chief executive Sastry Karra prefers to dwell on January's discovery of hydrocarbons in the 75 per cent-owned CY-0S/2 exploration block in the Cauvery Basin, with a present target of one trillion cubic feet of gas, and another hydrocarbon find in March at the ten per cent-owned GS-01 well in the Gujarat-Saurashtra Basin, with a target of 150 million to 200 million barrels of oil. Hardy has submitted a drilling programme to appraise CY-0S/2 and says two new wells are to be drilled at 18 per cent-owned PY-3.

The company has ten per cent of the D9 and D3 gas wells in Eastern India, next to a 30 trillion cubic foot deposit. Hardy also has interests in Nigeria's Niger Delta Basin. Here, well testing plans are being put into operation in the Oza field.

The early months of next year should bring some significant developments at several of Hardy's projects. The company, which raised £14.7 million at 183p last year and £21 million at 423p in May, says its financing needs are 'well covered' until the end of 2008.

Floated two years ago at 144p, Hardy shares were highlighted by Growth Company Investor at 276p a year ago and went on to hit 480p in June. They have lost ground since then, but at 392.5p, up 11.5p this morning, they could still resume progress if the current strength of the oil price persists.

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