Hyperdynamics Corporation (HDY) today announced that its wholly owned subsidiary, SCS Corporation Ltd, has completed the previously announced sale of a 40% gross interest in the Company's oil and gas exploration concession offshore Guinea to Tullow Guinea Ltd., a subsidiary of U.K.-based Tullow Oil plc.
Guinea's Ministry of Mines and Geology formally approved the sale by issuing an Arrete on December 27, the transaction closed today, and Tullow has transferred the $27 million cash payment to SCS. Tullow will also carry SCS' participating interest share of future expenses, up to a gross expenditure cap of $100 million, from the date of entry into the next exploration period until 90 days after the drilling of the well.
The parties intend to begin drilling a well to test a deepwater fan prospect in the concession before April 1, 2014. Tullow will also carry SCS' share of costs associated with an appraisal well of the initial exploration well, if drilled, subject to an additional gross expenditure cap of $100 million.
"We are delighted to close this transaction with Tullow and to be able to obtain funding for the next critical phase of our exploration program offshore Guinea," said Ray Leonard, Hyperdynamics President and Chief Executive Officer. "Tullow has an excellent exploration track record in West Africa, particularly along the Transform Margin trend, as is found on the Guinea concession. We look forward to working closely with them in the coming months as we transfer operatorship to Tullow and initiate preparations for drilling the next well."
The interests of SCS, Tullow and Dana Petroleum E&P Limited in the concession are now 37%, 40% and 23%, respectively.
BofA Merrill Lynch, acting as financial advisor, assisted Hyperdynamics in connection with the sale.