Hardy Faces Shortage of Specialty Exploration, Development Equipment

The D9 licence, in which Hardy Oil and Gas holds a 10% participating interest and which is also operated by Reliance, is located in the Krishna Godavari basin on the East Coast of India and covers an area of approximately 11,605km2.

The oil and gas industry continues to experience significant shortage of specialty exploration and development equipment. This has been particularly apparent for offshore drilling ships capable of operating in water depths of greater than 2,000 m. As a result of this shortage Hardy's D9 deepwater exploration licence has previously experienced delays in the drilling of the licence's minimum work programme.

After careful consideration of the current equipment shortage and the priority of the operator to complete offsetting commercial developments, the Company is of the view that drilling on the D9 licence is unlikely to commence until the latter part of 2008 at the earliest. However, as experienced with the D3 licence, windows of availability do occur and Hardy will endeavour to ensure that our stakeholders are notified of developments on a timely basis.