4 February 2013
Hardy Oil and Gas plc
(LSE: HDY)
CY-OS/2 Arbitration Award
Hardy Oil and Gas plc ("Hardy" or "the Company"), the oil and gas exploration and production company with assets in India, is pleased to report that the Hon'ble tribunal, hearing its dispute regarding the nature of the Ganesha-1 discovery, located in the CY-OS/2 exploration block, has issued an award in the Company's favour.
The Company has been successful in obtaining the extension of the CY-OS/2 licence. The Hon'ble tribunalaward provides for the CY-OS/2 joint venture to undertake appraisal activities on the CY-OS/2 block, in accordance with the governing production sharing contract, for a further three years from the date on which the block is restored. The Hon'ble tribunal also awarded the joint venture recovery of costs incurred as a result of the arbitration.
CY-OS/2 block - Hardy is the operator of the CY-OS/2 exploration block and holds a 75 per cent participating interest1, through its wholly owned subsidiary Hardy Exploration & Production (India) Inc. The block is located in the northern part of the Cauvery Basin immediately offshore from Pondicherry, India and covers approximately 859 sq km. The licence comprises of two retained areas with the Ganesha-1 natural gas discovery located in the northern area, which comprises an area of approximately 300 sq km.
Ganesha-1- The natural gas discovery Ganesha-1, announced in January 2007, was drilled to a depth of 4,089 metres, encountering sandstone reservoir in the Campanian. The well flow tested at a peak rate of 10.7 mmscfd. The Company published a competent person report, prepared by Gaffney, Cline & Associates, dated March 2011, which estimates 2C Contingent Resources of approximately 130 BCF.
As a result of the Hon'bletribunal's award, Hardy may now recommence work on the appraisal of the natural gas discovery Ganesha-1 and the Company will provide an update on progress and plans in due course.
Ian MacKenzie, Chief Executive Officer of Hardy, commented:
"As operator of the CY-OS/2 block, we are looking forward to recommencing our efforts to appraise the Ganesha-1 natural gas discovery. The award has resolved a key uncertainty and allows us to put in place a business plan for this asset as we have done with the other licences in our India focused portfolio. The award is a positive first step as we build momentum through the implementation of our 2013 campaign."
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1 CY-OS/2 - In the event of a declaration of commerciality, the Government of India's nominee is entitled to assume a 30 per cent participating interest in the block. As a result Hardy's participating interest would be 52.5 per cent.
The Company will be reporting its financial results for the year ended 31 December 2012 on 7 March 2013.
For further information please visit www.hardyoil.comor contact:
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Hardy Oil and Gas plc
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012 2461 2900
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Ian MacKenzie, Chief Executive Officer
Richard Galvin, Treasurer & Corporate Affairs Executive
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Arden Partners plc
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020 7614 5917
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Richard Day
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Tavistock Communications
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020 7920 3150
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Jeremy Carey
Simon Hudson
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GLOSSARY OF TERMS
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2C Contingent Resources
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the best estimate of those quantities of petroleum, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies
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BCF
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billion cubic feet
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Ganesha-1
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A non-associated natural gas discovery, located in the CY-OS/2 exploration licence, announced on 8 January 2007
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km
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kilometre
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mmscfd
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million standard cubic feet per day
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NOTES TO THE EDITORS
Hardy Oil and Gas plc is an upstream oil and gas company focused on India. Its portfolio includes a blend of exploration, appraisal, and production assets. Hardy's goal is to evaluate and exploit its asset base with a view to creating significant value for its shareholders.
Hardy is the operator of an offshore oil field and an exploration block in India's Cauvery basin. Hardy also has interests in two offshore exploration blocks in India's Saurashtra and Krishna Godavari basins.
Hardy is incorporated under the laws of the Isle of Man and headquartered in Aberdeen, UK. Ordinary shares of Hardy were admitted to the Official List and the London Stock Exchange's market for listed securities effective 20 February 2008 under the symbol HDY.
The Company's Indian assets are held through the wholly owned subsidiary Hardy Exploration & Production (India) Inc, located in Chennai, India.
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