India – our platform for growth

Preliminary Results

June 2014

1

Presentation team

Alasdair LockeNon-Executive Chairman

Ian MacKenzieChief Executive Officer

Financial summary

Reporting 15 months due to synchronisation of

the Group’s accounting reference date to 31

March

No revenue was realised due to the continued

shut-in of PY-3. Net cash used in continuing

operating activities was $4.7 million and

exploration related expenditures amounted to

$0.2 million

Cash and short-term investments at 31 March

2014 amounted to $24.7million (2012: $29.1

million) and no debt

Loss before taxation for the 15 months ended 31

March 2014 amounted to $5.4 million (12 months

ended 31 December 2012: loss of $12.7 million)

Operational summary

PY-3 – Good progress in regard to finalisation of

the comprehensive Field Development Plan that

will enable us to meet our target to recommence

production in early 2015

GS-01 - Hardy is continuing to pursue the

acquisition of the operator’s participating interest

and progress the approval of the proposed FDP

The CY-OS/2 arbitration award in our favour was

a very positive development

D3 - Drilling at D3 was pushed to 2014 due to the

lack of rig availability. The joint venture applied

for a 12 month extension to exploration Phase I

2

Robust cash position

2013/14 summary

Governance

In February 2014 the Company announced the

appointment of Mr Ananth Kumar as a non-

executive director of HEPI

The Board adopted a new Code of Business

Conduct and amended its Committees’ terms of

reference in accordance with the UK Corporate

Governance Code

2014/15 outlook

PY-3 - Secure approval of FDP and target the

recommencement of production in early 2015

GS-01 - Conclude discussions to acquire the

operator’s participating interest in the block

CY-OS/2 - Recommence work on the appraisal of

the Ganesha-1 natural gas discovery once the

block has been restored to the CY-OS/2 joint

venture

D3 - exploration drilling is expected to re-

commence by the end of 2014

The working capital position of the Company

remains strong and we are well funded to meet

our planned work programmes

3

Staying the course

2013/14 summary

Demand for Energy

• India’s demand for natural gas is expected to more

than triple to 500 MMscmd by 2022 with domestic

supply projected to fall well short of expected

demand

• Robust environment in which to monetise the

Company’s current and potential gas discoveries.

Empowered & Progressive

• National election has provided a clear majority

government with an unprecedented mandate to see

through its plans and energy supply and security is

continuing to be an active topic on the national

agenda.

• Realising the full potential of India’s hydrocarbon

resources will require continued participation of

independent operators, service providers and

government.

4

Leadership Optimism

India Macro backdrop

Source: “Vision 2030” Natural gas infrastructure in India, Petroleum & Natural Gas Regulatory Board (PNGRB)

5

For the period ended 31 March 2014

Consolidated Statement of Income

US$ million 2014 2012

Revenue - -

Cost of sales 0.5 (5.6)

Gross profit 0.5 (5.6)

Administrative costs (6.2) (7.5)

Operating loss (5.7) (13.2)

Interest and investment income 0.7 0.8

Finance cost (0.4) (0.4)

(Loss) /profit before taxation (5.4) (12.7)

Taxation 0.6 1.6

Total comprehensive loss (4.8) (11.1)

6

Statement of Financial position

US$ million 2014 2012

Assets

Non-Current 96.0 95.1

Current 27.3 32.5

Total 123.2 127.6

Equity and Liabilities

Equity attributable owners 112.7 116.4

Non current liabilities 5.5 5.2

Current liabilities 5.0 6.1

Total equity and liabilities 123.2 127.7

As at 31 March 2014

CY-OS/2 arbitration award - Contingent assets of $36 million

7

Consolidated Statement of Cash Flow

US$ million 2014 2012

Cash flow (used in) operating activities (5.0) (7.1)

Taxation refund 0.3 0.6

Cash flow from operating activities (4.7) (6.5)

Investment in continuing operations (0.2) (1.5)

Site restoration deposit (0.1) (0.3)

Cash flow from Investing activities (0.3) (1.8)

Issue of shares - -

Interest and investment income 0.7 0.9

Finance cost (0.1) -

Cash flow from financing activities 0.6 0.9

Change in cash and short-term investments (4.4) (7.4)

Cash and short-term investments 24.7 29.1

For the period ended 31 March 2014

8

India focused

Hardy’s asset portfolio

Asset Status Partners %

PY-3(Pre NELP)

• Full Field Development Plan is prepared

and technical consensus achieved

• Commercial proposals being considered

to address disproportionate government

levy burden

Hardy*

Tata

HOEC

ONGC

18

21

21

40

D3(NELP V)

• DOC submitted & is under review

• Finalization of locations for completing

the MWP

• Applied for 12 month extension to

complete MWP

Hardy

Reliance*

BP

10

60

30

GS-01(NELP II)

• FDP submitted in December 2012

• Assignment of operator’s interest to

Hardy pending finalization

Hardy

Reliance*

10

90

CY-OS/2(Pre NELP)

• Arbitration award is in favor of JV

• GOI appealed in High Court citing

jurisdiction

• Execution application filed by Hardy

Hardy*

GAIL

75

25

* Operator of the block

Summary

FDP - Technical Consensus reached

Commercial proposals being considered to

address disproportionate allocation of

government levies

National elections slowed momentum

Background

The field was shut-in from July 2011

Average rate prior to shut-in was ~3,350 bbld

Hardy operates PY-3, which is located 80 km

south of Pondicherry

Capable of gross daily production of

approximately 8,000 bbld with the drilling of

two additional wells

9

Production catalyst

PY-3

Targeting Resources

Now in the de-risking and high potential

value addition phase

of the exploration programme

BP’s acquisition valued the D3

block at ~$5 billion (net $500 million)

KG Basin is close to existing offshore

infrastructure and onshore facilities

Drilling expected to recommence H2 2014

10

Organic growth potential

Krishna Godavari Basin – D3

Net Risked Prospective Resources 2011

D3 Prospects and leads bcf 396

Six play types present

11

D3 - Unique exploration block

• Ongoing geotechnical evaluation integrated with new regional data has identified a number of additional prospects and leads

• The new prospectively is primarily focused in deeper thermogenic sourced plays

• Four consecutive natural gas discoveries

• DOC for A1, B1 and W1 submitted in 2011

• Net Contingent Resources 68 bcf

• Block area 3,288 km2

• HDY 10%, BP 30%

• Reliance operated

Hardy illustrations

Declaration of commerciality was approved

by MC in Dec.2011.

JV retained 600 km2 development area

Discovery (Dhirubhai 33) May 2007 at 80 m

bathymetry

Net contingent resources 8.3 bcf (2C)

Net risked prospective resources 14 bcf

Submitted the Field Development Plan for

Dhirubhai-33 discovery to DGH in December

2012

Discussion with RIL on the assignment of

interest and transfer of Operatorship

12

Progress to monetisation

GS-01

Block area 5,890 km2

Dhirubhai 33 gas discovery

HDY Interest 10%

Reliance operated

Summary

GOI has filed appeal in High Court Delhi.

Process may extended through 2014.

Filed execution application in 2013

International tribunal award is unanimous

and well reasoned

Background

Arbitration award restored block to the

joint venture and allows a further three

years to complete the appraisal of the

Ganesha-1 discovery. (Contingent asset

interest award of ~$36.0 million)

Ganesh-1 Natural gas discovery

announced in 2007, net Contingent

Resources 97 bcf (2C), net risked

Prospective Resources 84 bcf

Restoration of block

CY-OS/2

13

Significant enhancement of India’s natural gas pipeline infrastructure

5.611

18

6

Pre 2005 2010 2015

Creating a national gridto unlock demand

Incremental demand growth is expectedfrom refining and industrial end-users

14

Market for monitisation

India natural gas demand

Source: McKinsey & Company – Gas 2015 Unlocking Opportunities

Demand by end-use sector, 2015mmscmd

Source: McKinsey & Company – Gas 2015 Unlocking Opportunities

Gas pipeline length‘000km

24

3x

37 37

34 4617

5263

6478

82

0

50

100

150

200

250

300

Base Demand Upside Demand

CGD / Others

Industrial

Petchem & Ref

Fertiliser

Power

Full scale change in Ministry and regulator

Dharmendra Pradhan, Minister of State – Independent Charge, MOPNG, GOI (appointed May 2014)

“Energy self-reliance is a pre-requisite for the country to become an economic superpower.”Source – India Times 24 May 2014

Shri Saurabh Chandra, Secretary, MOPNG, GOI (appointed March 2014)

B. N. Talukdar, Directorate General, DGH, under MOPNG, GOI (appointed August 2013)

“Projections indicate India's energy consumption to be more than double over the next twenty years.

This high degree of dependence on imported crude oil definitely adversely affects the nation's energy

security as well as economy. It is, therefore, highly imperative that we encourage the E&P companies

to invest in exploration and production activities covering all the sedimentary basins of Source – DGH website posted February 2014

Platform for constructive engagement

15

New Leadership

D3 - Drill the fifth exploration well in 2014, GOI to review the submitted declaration of

commerciality proposal

PY-3 - Secure timely approvals for the proposed field development plan

GS-01 – Complete discussions with our joint venture partner to acquire their interest in

the block and secure approval of field development plan

CY-OS/2 – Await outcome of GOI appeal. Re-engage with the regulator and initiate

planning for the appraisal of the Ganesha-1 natural gas discovery

“We have been making progress and our short-term focus is to establish a

commercial framework for all PY-3 stakeholders and encourage the D3 operator to

fulfil the exploration programme in a timely manner. The longer term strategy in India

will be shaped by the outcome of these activities.”

An important year for Hardy

16

Outlook 2013/4

“We are well positioned to benefit from the significant changes in the

political and wider economic environment taking place in our target

market. It is because of this back-drop that we are indeed optimistic.”

Alasdair Locke - Chairman

Appendix

18

LSE Main Market listing

Capital Structure

Shares outstanding

73.1 million

Options outstanding

3.4 million

Fully diluted

76.5 million

Average daily volume

~0.1million

Current marketcapitalisation

~£74million

Directors andsenior managers

~7.1%

Trading symbol

HDY.L

19

Competent Person’s Report on Hardy’s petroleum interests

CPR 2011 – reserves

Current Previous

RESERVES (Proven + Probable) Gross Net Gross Net

PY-3 Producing Oil mmbbl 15.1 2.1 16.3 2.5

Reserve

Category

Pre-tax NPV ($ million) Post-tax NPV ($ million)

7.5% 10.0% 12.5% 7.5% 10.0% 12.5%

1P 12.3 12.0 11.8 12.3 12.0 11.8

2P 66.0 60.6 55.8 43.5 39.9 36.7

3P 97.9 88.6 80.5 57.7 51.8 46.7

Year 1P 2P 3P

Prod CAPEX OPEX Prod CAPEX OPEX Prod CAPEX OPEX

mbbl $ million $ million mbbl $ million $ million mbbl $ million $ million

2011 1,151.5 0 35 1,151.5 0 35 1,151.5 0 35

2012 802.9 0 37 2,156.4 162 37 2,156.4 162 37

2013 557.6 0 37 2,981.5 0 45 4,039.5 162 45

2014 0 0 0 2,205.6 0 45 2,771.2 0 445

20

Competent Person’s Report on Hardy’s petroleum interests

CPR 2011 – contingent resources

CONTINGENT RESOURCES (2C) Gross Net Gross Net

GS-01 B1 (Dhirubhai 33) Gas BCF 83.0 8.3 83.0 8.3

CY-OS/2 Ganesha 1 Gas BCF 130.0 97.5 130.0 97.5

D3 A1 (Dhirubhai 39) Gas BCF 210.0 21.0 210.0 21.0

D3 B1 (Dhirubhai 41) Gas BCF 213.0 21.3 213.0 21.3

D3 R1 (Dhirubhai 44) Gas BCF 98.0 9.8 98.0 9.8

D3 W1 (Dhirubhai 52) Gas BCF 162.4 16.2 -

GS-01 B1 (Dhirubhai 33) Oil mmbbl 1.85 0.19 -

Total Contingent Resources

(2C)

Gas BCF 896.4 174.1 734.0 157.9

Oil mmbbl 1.85 0.19 - -

21

Competent Person’s Report on Hardy’s petroleum interests

CPR 2011 – prospective resources

Current Previous

Risked Prospective Resources

(Best Estimate)Gross Net Gross Net

D3 Prospects and Leads Gas BCF 3,959 396 3,870 387

D9 Prospects and Leads Gas BCF 4,655 466 5,197 520

D9 Prospects and Leads Oil mmbbl 180 18 180 18

CY-OS/2 Prospects Gas BCF 113 84 113 84

GS-01 Prospects Gas BCF 142 14 142 14

Total Risked Prospective

Resources (Best Estimate)

Gas BCF 8,907 964 9,321 1,005

Oil mmbbl 179 18 179 18

Aggregated risked Prospective Resources have been derived by Hardy and are not aggregated

or provided as risked volumes by GCA.

22

Profit Sharing Contracts

India fiscal terms

Asset P.I.

Contractor Profit Oil

Tax5

Holiday

Cost

Recover

Royalty

Phase

Investment Multiple (R factor)

Oil Gas<1.5 1.5-2 2.0-2.5 2.5-3.0 3.0-3.5 >3.5

PY-31 18% 90 75 60 50 40 30 0 100% n/a n/a Prod

CY-

OS/21-375%2 100 90 80 70 60 50 7 100% n/a n/a III

GS-01 10% 84 60 30 21 21 21 7 100% 10% 10% I

D94 10% 90 84 75 66 15 15 7 100% 5% 5% I

D34 10% 84 72 60 24 24 15 7 100% 5% 5% I

1. PY-3, CY-OS/2: Royalty & Cess paid by Licensee (ONGC)

2. CY-OS/2 – In event of declaration of commerciality ONGC entitled to assume 30 per cent interest

3. CY-OS/2 – Current subject to arbitration hearings regarding the status of the licence

4. Deepwater blocks (D9, D3) royalties increase to 10 per cent 7 years after commencement of production

5. Tax Holiday for natural gas undertakings is under dispute – to be determined by courts

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Fax: +44 (0) 122 463 3995

Investor Relations Contact

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