Hyperdynamics Amends '06 PSC with Guinea Govt

Hyperdynamics Corporation announced that it and the Government of the Republic of Guinea have executed an amendment to the 2006 Production Sharing Contract (PSC). The document was signed by the Guinean Minister of Mines and Geology, Mahmoud Thiam; the Minister of Finances and Economy, Kerfala Yansane; and Ray Leonard, Hyperdynamics' President and Chief Executive Officer. A decree giving the Government's formal agreement to the assignment of a 23% interest to Dana Petroleum in the PSC is being prepared and will be issued in the near future.

The amendment was entered into in accordance with the September 2009 Memorandum of Understanding (MOU) between Hyperdynamics and the Republic of Guinea that reaffirmed the Company's PSC but which also required a review of the commercial terms to ensure that they were in line with international standards.

In addition to addressing the points raised in the MOU and clarifying certain elements of the PSC, the amendment included the following terms:

  • The company will retain a contract area of approximately 24,000 sq km, 30% of the original concession area and will relinquish 25% of the retained contract area by September 30, 2013.
  • In September 2010, the company will enter into the second exploration period which runs until September 2013 and may be extended to September 2016. The work program to September 2013 is to acquire a minimum of 2000 sq km 3D seismic and drill an exploration well, to be spudded by end 2011, to a minimum depth of 2500m while that for the period from September 2013 to September 2016 is to drill one exploration well to a minimum depth of 2500m.
  • The Republic of Guinea will be carried through to first production for its share of up to 15%, at which time the cost of that carry will be recovered out of 62.5% of the Republic of Guinea's share of cost and profit oil.
  •  An annual training budget of $200,000 will be established for the benefit of Guinea oil industry personnel, and the companies will also pay an annual surface tax of $2.00 per square kilometer on its retained acreage.