Hardy Oil and Gas

REDUCE

05/03/2010 Robert Tyerman

India-focused Hardy Oil and Gas went into the red last year, converting an £8.3m profit into a £5.2m loss.

The fully listed company, whose revenues fell 56% to £5.1m in 2009, saw average daily production fall 30% to 276 barrels a day, with the average selling price halving to $52.96 a barrel, only $3.34 above average cost. Chief executive Sastry Karra, who is soon to hand over that role to operations chief Yogeshwar Sharma, is upbeat about this year’s exploration drilling programme in the key Krishna Godavari Basin and points out Hardy has made several new discoveries, which should add to its earlier estimated potential resources at its D3 and D9 blocks of 9.5 trillion cubic feet of gas and 143m barrels of oil.

Having raised £10.8m in May at 174p, the company ended 2009 with £20.3m cash. Chairman Paul Mortimer insists Hardy is ‘well positioned to see itself through its key exploration activities in 2010'. Growth Company Investor recommended Hardy at 276p four years ago and urged partial profit taking at 808p in 2008. With the shares now trading at 233p, it could be prudent to sell more, while leaving a residue in case it all comes right in the end.

Tags: Boardroom moves, Commodities, Full list

Sector: Oil & Gas Producers

Companies: Hardy Oil & Gas

Market cap: £169.2m

PE Forecast: n/a

Share price: 233p