Hardy Spuds Well in Bay of Bengal

Hardy Oil and Gas plc

Hardy Oil and Gas plc, which owns significant interests in India, said that its two-well drilling program on Block CY-OS/2 in the Cauvery Basin offshore the east coast of India has commenced.

The first exploration well commenced drilling on Sunday. The Fan E-1 well is located in approximately 90m of water (295 ft) and is being drilled by the Deep Driller-1 jackup rig. With a total depth of approximately 2,500m, the Fan E1 well will be terminating within the Precambrian Basement. The primary target consists of sands within a potential Eocene fan system.

The second exploration well (Fan A-1) will commence upon completion of Fan E-1. The Fan A-1 well has a target depth of approximately 4,500m. The primary target is a Campanian slope fan and the secondary target is the Turonian sands.

Upon completion of the CY-OS/2 drilling program, Deep Driller-1 is expected to move to the GS-OSN-2000/1 block in the Gujarat-Saurashtra basin off the west coast of India. Reliance Industries Limited is the operator of this block, in which Hardy has a 10% working interest.

Hardy is the operator of the CY-OS/2 block, which is located approximately 12km from the east coast of India. Hardy has a 75-percent equity share in the block, with GAIL (India) Limited holding the remaining 25 percent. Given that CY-OS/2 is a pre- NELP (New Exploration License Program) PSC, in the event of a commercial discovery ONGC has an option to “back-in” to the block for 30 percent.

Results from the two wells are expected to be available in the fourth quarter of 2006.