With no current production, there are few meaningful financial comparisons within the 2012 full-year results of Hardy Oil & Gas (HDY) , beyond the rate of cash-burn. However, the report does reflect some progress linked to operational and arbitration issues, although the recommencement of production at the PY-3 field is at least a year away.
Exploration drilling is set to recommence at the flagship Krishna Godavari D3 licence on India's east coast. The licence contains the Dhirubhai gas discoveries, which are the subject of a revised Declaration of Commerciality now being considered by Indian authorities. Post year-end, an independent tribunal ruled in favour of Hardy and India's GAIL, in a dispute over the joint venture's relinquishment of a licence covering the 130bn cubic feet Ganesha-1 gas discovery that was previously enforced by India's Ministry of Petroleum & Natural Gas (MOPNG).
The upshot is that the MOPNG has been ordered (subject to appeal) to restore the licence and pay interest-linked compensation to the partners, of which around $24.8m (£16.5m) is net to Hardy. The remittance is important - Hardy's current cash pile should be sufficient to progress work at D3, but the group is likely to require additional funds to recommence production at its PY-3 licence, assuming government approval of a redevelopment plan.
Assuming PY3 recommencement by mid-2014 and $33m capital expenditure, Arden Partners gives a core net asset value of 73p a share.
| HARDY OIL & GAS (HDY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 119p | MARKET VALUE: | £87m | |
| TOUCH: | 117-120p | 12-MONTH HIGH: | 167p | LOW: 84p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 159¢* | NET CASH: | $29m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 17.3 | 12.4 | 12.0 | nil |
| 2009 | 7.70 | -7.25 | -10.0 | nil |
| 2010 | 13.2 | 0.09 | -1.00 | nil |
| 2011 | 11.3 | -4.60 | -3.00 | nil |
| 2012 | nil | -12.7 | -15.0 | nil |
| % change | - | - | - | - |
£1 = $1.50 *Includes intangible assets of $82.3m, or 112¢ a share | ||||
