Hyperdynamics Corporation announced it has signed a binding sale and purchase agreement (S&PA) with Aberdeen-based Dana Petroleum PLC under which Dana has agreed to acquire, through its subsidiary, Dana Petroleum (E&P) Limited, a 23 percent participating interest in Hyperdynamics' oil and gas concession offshore the Republic of Guinea. This S&PA is broadly similar to the letter of intent signed with Dana on October 19, 2009. The sale is expected to close by January 31, 2010, subject to customary closing conditions and government approvals.
Upon closing of the sale, Dana will pay Hyperdynamics a pro rata portion of accrued expenses associated with the Company's ongoing 2-D seismic program. Dana will then pay Hyperdynamics $19.6 million upon the conclusion of a review by the government of Guinea and Hyperdynamics of its 2006 Production Sharing Contract pursuant to the terms of a Memorandum of Understanding signed in September and the effectiveness of any resulting revisions or amendments, which review is expected to be completed by March 2010. Of the $19.6 million, Dana will pay $5.0 million in cash and the remaining $14.6 million will be paid in either cash or shares of Dana Petroleum PLC, at Dana's sole option. Should Dana choose to pay in stock, there would be no restriction on the immediate resale of these shares by Hyperdynamics.
"This is an important step forward in completing the commercial agreements for our alliance in the Guinea project," said Ray Leonard, Hyperdynamics' President and CEO.
On November 30, 2009, Hyperdynamics signed an agreement for exclusive dealing and letter of intent (the "LOI") with Spanish-based Repsol YPF, S.A. under which the two companies will negotiate the assignment to Repsol of a 37 percent interest in Hyperdynamics' oil and gas concession offshore the Republic of Guinea. Under the terms of this LOI with Repsol, the two companies will work to sign definitive documents no later than January 31, 2010.
Under a separate letter agreement between Hyperdynamics and Dana, in the event that Hyperdynamics' present letter of intent with Repsol YPF, S.A., terminates without a successful assignment, Hyperdynamics would have 90 days to secure the participation of an alternative major company with the financial and technical capability to operate in deep water off the coast of West Africa. After that 90 day period, Dana would have the option to negotiate with Hyperdynamics to take up to an additional 27 percent of the concession, with consideration to be separately negotiated, and to be designated operator of the Guinea concession.
Based in Aberdeen, Scotland, Dana has both production and exploration operations in the North Sea and Egypt, as well as additional exploration activities offshore Mauritania, Morocco and Senegal. It is traded on the London Stock Exchange, with a market capitalization of approximately U.K. 1.3 billion pounds Sterling. Dana reported that last year it produced more than 39,000 barrels of oil equivalent per day and had proved and probable reserves of 194 million barrels of oil equivalent at year-end 2008.
