SCS Corp Takes Action to Achieve Guinea Resolution

Hyperdynamics' subsidiary, SCS Corp., in response to the alleged termination letter disclosed last week, has taken action to resolve the dispute so that it can move forward with its drilling plans offshore the Republic of Guinea.

The company is communicating with the government of Guinea to request an explanation of this situation. An invitation has been sent, inviting officials of the Republic of Guinea to meet with the company. In addition to efforts of direct contact, the company is in communication with the State Department of the United States government regarding its diplomatic options.

Finally, the company's legal counsel is preparing for any legal remedy that may ultimately be necessary. The 2002 Production Sharing Agreement, the governing contract, provides the right of arbitration in London through the International Center for Settlement of Investment Disputes (ICSID). ICSID was created by the World Bank and the convention has more than 150 nations as signing members, including the Republic of Guinea. Parties that have consented to arbitration under the ICSID convention are bound to its ruling. Moreover, all ICSID contracting states are required by the convention to recognize and enforce ICSID arbitral awards.