Hardy Oil not to hike stake in Reliance's KG basin gas block

Hardy Oil and Gas plc has decided not to exercise an option to increase its participating interest, by 3 per cent, in the D3 (KG-DWN-2003/1) exploration licence.

Hardy Oil and Gas plc (LSE: HDY), the oil and gas exploration and production company with assets in India, announces that it has elected not to exercise an option to increase its participating interest, by three per cent, in the D3 (KG-DWN-2003/1) exploration licence.

Hardy had waived its pre-emptive rights to increase its participating interest in all of these blocks following BP's acquisition of a 30 per cent interest in the RIL-operated D3, D9 and Assam exploration licences, while retaining an option to increase its participating interest in D3 by three per cent.

If exercised, the three per cent option in D3 would have cost Hardy approximately $150 million, payable in three installments over a seven-month period from the closing of the BP acquisition.

The option consideration implies a gross value of approximately $5.0 billion for the D3 exploration licence, Hardy said.

"After due consideration of the company's cash position and future capital requirements under the existing production sharing contracts, the board has elected not to exercise this option which has now lapsed, and so Hardy's participating interest in the D3 exploration licence will remain at 10 per cent," the company said.