The company this morning reported the volume estimates in its first half report for fiscal 2006, in which it said successful testing of the Mputa and Waraga wells had confirmed excellent reservoir quality and potentially commercial flow rates.

Also during the period, Hardman reported it swung to a first half before tax profit of $A31.1 million from an $8.4 million loss in the previous corresponding period.

The result was achieved on the back of $61 million in cash earnings from the Chinguetti oil development in offshore Mauritania.

Hardman’s share of production from the field totalled 975,684 barrels or 7683 barrels of oil per day (bopd) since first oil was achieved in February.

Hardman managing director Simon Potter said high oil prices have helped to offset lower-than-expected output from the field, which has since prompted operator Woodside Petroleum to undertake a review of field reserves.

“The unpredicted decline in production and need to review reserves at Chinguetti was a disappointment and suggests that the reservoir development of this field will be a challenging process of optimisation and application of technology over time to enhance recovery,” he said.

“But high margin barrels and a strong prevailing oil price mean the prize for translating oil-in-place to sold barrels is substantial and a strong incentive for the joint venture.

“Despite setbacks the mitigation lies in pursuing our existing strategy to fully exploit our portfolio.”

After unpredicted early decline, Chinguetti production stabilised in the third quarter, averaging 35,068bopd in July and 33,018bopd between August 1 and August 22.

Hardman said production over the remainder of the year was either expected to continue to stabilise or enter a slow decline, depending on reservoir connectivity and efficiency of water injection.