(By Balaseshan) Hyperdynamics Corp. (NYSE: HDY), an oil and gases exploration company, said its subsidiary, SCS Corp. Ltd., has completed sale of 40% interest in oil and gas exploration concession offshore Guinea to Tullow Guinea Ltd., a unit 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 Monday, 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.
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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.
The interests of SCS, Tullow and Dana Petroleum E&P Ltd. in the concession are now 37%, 40% and 23%, respectively. BofA Merrill Lynch, acting as financial advisor, assisted Hyperdynamics in connection with the sale.
"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," said Ray Leonard, Chief Executive of Hyperdynamics.
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HDY is trading up 4.24% at $0.615 on Monday. The stock has been trading between $0.53 and $3.63 for the past 52 weeks.