Hyperdynamics Corporation announced that on August 19, 2016, Ray Leonard, Chief Executive Officer, and the General Director of the National Petroleum Office of the Republic of Guinea, Diakaria Koulibaly, signed a Memorandum of Understanding (MOU) regarding the terms of the one year extension to the 2006 Production Sharing Contract, as Amended (the PSC) until September 22, 2017.
Hyperdynamics and the Government of Guinea agreed that the MOU is not a legally binding document, but committed to negotiate mutually acceptable documents for the extension period by September 1, 2016 incorporating the following key terms:
- Hyperdynamics will be Operator and 100% interest holder in the Guinea Concession.
- The Government of Guinea will grant a one year extension to the current Exploration period until September 22, 2017.
- Hyperdynamics will retain a mutually agreed area equivalent to 23% of its current acreage in the Concession and it will commit to drill one (1) exploratory well offshore Guinea with a projected commencement date of April 2017. If the well is not drilled within the one (1) year extension period, Hyperdynamics will owe the Government of Guinea the difference between the actual expenditures related to the well and U.S. $46,000,000.
- Hyperdynamics reaffirmed that due to the August 15, 2016 withdrawal of Tullow and Dana from the PSC, it is obligated to pay any unused portion of the training program under Article 10.3 of the PSC, estimated to be at $500,000 and agrees to administer it in conjunction with the National Petroleum Office of Guinea.
- The cost recovery pool is limited to Hyperdynamics' share of expenditures in the PSC since 2009.
Mr. Leonard stated, "I am pleased that the Government of Guinea continues to support Hyperdynamics and we remain committed to the country, negotiating key agreements and drilling the Fatala well offshore Guinea within the proposed timeline".
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