- Hyperdynamics Corporation has today announced it has signed a letter of intent with Aberdeen-based Dana Petroleum PLC under which the two companies will negotiate the assignment of a 23 percent participating interest in the oil and gas concession offshore the Republic of Guinea.
According to the company, the letter of intent, which is non-binding and gives Dana exclusive negotiating rights for the 23 percent share, calls for Dana to take a participating interest in Hyperdynamics' concession in exchange for total consideration of $20 million.
This includes $5 million in cash payable upon execution of the definitive agreements and, where applicable, their entry into full legal effect pursuant to the laws of Guinea, the company exlained, adding that the remaining $15 million is payable at Dana's option in either cash or newly issued ordinary shares of Dana.
"It would be paid upon the conclusion by March 2010 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. There would be no restriction on the immediate resale of these shares by Hyperdynamics," explained the company statement.
According to the statement, the two companies intend to seal the deal no later than 31 December, 2009, when the letter of intent would terminate unless extended by further agreement.
Dana also has the option to negotiate with Hyperdynamics to take up to an additional 27 percent of the concession, with consideration to be separately negotiated, if Hyperdynamics does not sign a letter of intent for a participating interest with an additional exploration and production company with the financial and technical capability to operate in deep water off the coast of West Africa by 30 November, 2009.
"With a strong record of successful exploration and production activities in the North Sea and ongoing exploration in West Africa in Mauritania and Senegal, Dana is the kind of partner Hyperdynamics has been seeking to supply additional technical expertise and help us accelerate exploration of our offshore Guinea concession," said Ray Leonard, Hyperdynamics' President and Chief Executive Officer.
"We intend to begin a new 2-D seismic survey at the end of this month, and we look forward to working in partnership with Dana to help us evaluate the results of the new data and select which portions of our 31,000-square-mile contract area to retain for future exploration under our Production Sharing Contract and the more recent Memorandum of Understanding with the government of Guinea," Mr Leonard said.
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. 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.
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