Hyperdynamics Corporation announced that following a week of negotiations, Ray Leonard, Chief Executive Officer, and Minister of Mines, Energy and Hydraulics of the Republic of Guinea, Mahmoud Thiam, have signed a Memorandum of Understanding ("MOU"). The MOU is a binding agreement reaffirming the validity of Hyperdynamics' concession.
Leonard stated, "I am pleased that the government supports Hyperdynamics' continuing program to explore for oil and gas offshore Guinea. This agreement clarifies key points such as the relinquishment dates of portions of our acreage and continuing rights, which allows us to move forward on our planned seismic program in the fourth quarter 2009."
Key terms of the agreement include the following:
- The Government of Guinea reaffirms the validity of Hyperdynamics' concession and the Company's right to choose 36%, being 28,800 square kilometers, (11,160 square miles) of the initial acreage and carry it through the exploration period.
- The required relinquishment of 64% of the acreage by the Company, as stated in the 2006 Hydrocarbon Production Sharing Contract, must take place by December 31, 2009.
- The Company must spud its first well no later than calendar year 2011.
- Hyperdynamics has the right of first refusal on any new concessions Guinea offers within the 64% relinquished area, granting Hyperdynamics the right to match the terms offered by another party.
- The contract in its entirety will be reviewed to assure it is in conformity with international standards. If this process has not come to a satisfactory conclusion within six months, any unresolved points will be submitted to international arbitration.
A joint working team of Hyperdynamics Corporation and the Ministry of Mines, Energy and Hydraulics technical experts will begin joint work in October to identify outstanding points in the contract and begin transference of data to Guinea to allow the Ministry to prepare for the handling of the released acreage.
