Intially the market was disappointed that initial rumours of a hundred-metre oil column discovery at the Banda well were scaled back to a third of that size after determining the discovery was gas prone. However, industry experts say the discovery is highly exciting and commercial in its own right despite the high expectations for a liquids discovery.

Rumours put the placement at around 70 cents. The stock turned at 71 cents before firming slightly to drop back and finish at that level. Technical analysts say this would explain why Hardman stopped short of reaching a support level at 69c.

Hardman directors were out of the office and unavailable for comment but, according to shareholders who said they had had spoken to directors this morning, were unable to categorically deny the claims of the placement at that time.

There was an unidentified seller of millions of shares earlier this week, which also helped to depress the stock. The biggest sellers of Hardman stock were Macquarie Institutional and JB Were, unloading 1.7 million and 1.5 million shares so far this week.

Adding intrigue to the equation is the fact that Macquarie is the issuer of a series of warrants which come into the money at 95c, which would have made the bankers increasingly uncomfortable as Hardman reached 87c in the last fortnight.

Analyst for Euroz Securities, Ollie Foster, said if a placement was happening the timing would make sense as it had been flagged over recent months.

"They listed in the UK a few months ago without issuing any stock and I understand the appetite over there is pretty keen," he said. "The English understand Africa a lot better than we do in Australia."

"It would be obvious timing as they are right between wells."

Hardman managing director Ted Ellyard recently completed a trip to the UK and Europe.

Woodside's name has been mentioned in the recent machinations, and it is understood the Hardman shareholder is keen to at the very least maintain its current 10% stake. In a similar fashion to its last capital injection into Hardman, Woodside were prepared to pay a significant premium over the market price.

If the placement becomes reality it has two very good immediate benefits for Hardman. It will boost its cash reserves by at least $40m on current prices and guarantee its capital requirements for next year's exploration and development costs, and at the same time put an effective floor price on the Hardman share price.