Hardy holds firm on D3 stake

Hardy Oil and Gas will not exercise an option to raise its interest in the D3 (KG-DWN-2003/1) exploration licence offshore eastern India.

May 6th, 2011

Offshore staff

LONDON-- Hardy Oil and Gas will not exercise an option to raise its interest in the D3 (KG-DWN-2003/1) exploration licence offshore eastern India.

This follows BP’s announcement concerning acquisition of a 30% stake in the Reliance Industries-operated D3, D9, and Assam exploration licenses.

If Hardy had taken up its option for a further 3% in D3, this would have entailed a cash payment by Hardy to Reliance of around $150 million.

In light of the company’s cash position and future capital requirements under the existing production-sharing contracts, Hardy’s board elected to retain its current 10% interest in D3.

The block covers an area of 3,288 sq km (1,269 sq mi), around 45 km (28 mi) offshore, in water depths ranging from 400-2,200 m (1,312-7,218 ft). Four exploration wells have been drilled resulting in four consecutive gas discoveries.

Six different play types have been identified, from shallow Pleistocene, stratigraphically trapped biogenic gas sands through toe thrust-related Miocene structural traps with mixed biogenic and thermogenic sourcing.

05/06/2011

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