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Drills and thrills: oil find set to fire up the punters

Some good old-fashioned oil exploration excitement...

Some good old-fashioned oil exploration excitement - with the unlikely trigger of exploration off the coast of Mauritania - is set to fire up the local market today.

The two stocks at the centre of the excitement are Perth's Hardman Resources NL, headed by Ted Ellyard, and Woodside Petroleum, the group that Shell tried to snare in a $10 billion "merger" deal last month.

Hardman has a 21.6 per cent free-carried interest and Woodside a 35 per cent earning interest in the Chinguetti-1 exploration well, which it was reported yesterday had intersected oil-bearing sandstones over a (gross) interval of 86 metres.

While the discovery was significant in itself, the real excitement yesterday was that it opened up a new oil exploration hot spot off the coast of West Africa, already home to some of the biggest oil discoveries in recent times. They are further to the south.

The well was the first to be drilled by the partners in their permits, which run the full length of the Mauritanian coast. It will be followed by a well on another target, with at least 40 leads and prospects identified elsewhere.

Mr Ellyard said yesterday he was "extremely happy" with the result from the first well, which follows more than six years of commitment by Hardman to bringing Mauritania into the West African oil boom.

He said last night it would be some time before the partners had an idea of oil reserves in the discovery. But he said the oil sands encountered were of "extremely good" quality, indicating that well should flow "like a ripper" when production tested next year.

Ahead of the well being drilled, a consultant to Woodside estimated the mean recoverable oil potential of the Chinguetti structure was 180 million barrels of oil. News of the oil strike came too late in the day to have an impact on Hardman, which was voluntarily suspended from trade a couple of days ago pending the release of yesterday's results.

Ahead of its suspension, Hardman was quoted at 38c a share for a total market value of $110 million. A 6 per cent partner in the well, the London-listed Fusion Oil & Gas, was trading 34 per cent higher in early trade last night. Woodside traded 25c higher yesterday at $14.25 a share. That represented a total market value gain of more than $170 million.

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