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Hardy Oil and Solo Oil feature in Fox-Davies Newsflash


Daily Oil & Gas Monitor

Solo Oil (LON:SOLO) – Building Towards Critical Mass: While today’s announcement from the Company isn’t going to change its fortunes overnight, the fact that the management team are seeking to add to their Tanzanian acreage, but stay within Africa, is a testament to the fact that it is seeking to expand its horizons beyond its existing positions. While no projects have been highlighted, most likely due to the fact that they are yet to be finalised, it positions the Company well for the future, and not just via this transaction.

In this news:

Cash & Shares deal

o £200M cash

o £300M shares.

Hardy Oil & Gas (LON:HDY) – Déjà vu?: Today’s announcement brings a sense of disappointment and déjà vu. It would appear form this statement that all the progress has been largely due to other peoples’ progress, D3 (Reliance & BP) and arbitration on CY-OS/2 (lawyers). The stuff yet to come, and is always yet to come, is PY-3 (still an unmitigated disaster) and GS-01 development approvals. While the majority of these issues predate the existing management, there is a sense that the same problems are being repeated, which is a shame, as the Company’s assets are a solid core around which you could build a strong business. This management team has a chance to break from the past by delivering PY-3, GS-01 and CY-OS/2 on time and in the case of PY-3, quickly. At this stage, we are giving the management team the benefit of the doubt, and reiterating our BUY Recommendation and 185p Target Price.

In this news:

D3 – Interpretation of PSDM processing of 3D seismic data of 1,292km2 covering the eastern area of the block is in progress and new exploratory locations are being identified

D3 – Declaration of commerciality (DOC) for the Dhirubhai 39 and 41 natural gas discoveries is under review by the Government of India (GOI)

PY-3 – Continued work towards the submission to partners and the GOI of a full field development plan

GS-01 – Field development plan for Dhirubhai 33 natural gas discovery is with the GOI for review, discussions continue to increase our interest

CY-OS/2 – tribunal ruled in the Company's favour, allowing for a further three years to appraise the Ganesha-1 natural gas discovery and awarded interest and costs to the Company (contingent asset - $24.8M)

Cash and short term investments at 31 March 2013 amounted to $28.6M which is sufficient for the Company's committed exploration drilling programme; Hardy has no debt.

Quick facts: Archer Daniels Midland

Price: 41.14 USD

Market: NYSE
Market Cap: $22.85 billion

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