Hyperdynamics Corporation announced that it has filed legal actions against its partners under the Joint Operating Agreement governing the oil and gas exploration rights offshore Guinea ("JOA"). The Company's subsidiary, SCS Corporation, has filed parallel actions in the United States District Court for the Southern District of Texas and before the American Arbitration Association against Tullow Guinea Ltd. ("Tullow"), a wholly owned subsidiary of Tullow Oil, PLC and Dana Petroleum (E&P) Limited ("Dana"), a wholly owned subsidiary of the Korean National Oil Company, for their failure to meet their obligations under the JOA and the Production Sharing Contract with the Government of Guinea ("PSC").
The two legal actions seek (1) a determination that Tullow and Dana are in breach of their contractual obligations, (2) orders requiring Tullow and Dana to move forward with well drilling activities offshore Guinea, and (3) the damages caused by the repeatedly delays in well drilling caused by the activities of Tullow and Dana. Hyperdynamics determined to bring the legal actions only after it became apparent that Tullow and Dana would not move forward, despite many opportunities to do so, with petroleum operations.
As of the date of this release, the Production Sharing Contact Amendment agreed to at the Petroleum Operations Management Committee in Guinea on December 16-17, 2015, remains unsigned by both Tullow and Dana despite the fact that Tullow initialed the document in Guinea and the amendment contains the exact title assurance request previously made by Dana. Instead of signing, the two companies have exchanged the document repeatedly with each continuing to insist the other must sign first and even ignoring Hyperdynamics' suggestion that they sign simultaneously.
Pursuant to the agreement between Tullow and a subsidiary of Hyperdynamics in 2012 in connection with the sale to Tullow of a portion of Hyperdynamics' interest in the Concession, Tullow agreed to drill an exploratory well and to pay all of the costs of Hyperdynamics' participating share of expenditures associated with joint operations up to a gross exploration cap of $100 million. The participating interests are owned 40% by Tullow, 37% by Hyperdynamics and 23% by Dana Petroleum.