UPDATE 1-Hyperdynamics settles two lawsuits

(Adds details, background)

June 11 (Reuters) - Hyperdynamics Corp. (HDY.A) said it settled two lawsuits over production operations in northeast Louisiana. The oil company said it will receive back a 30 percent working interest in its Norris and Kelly leases, located in northeast Louisiana. An independent third party had estimated the consideration to be paid by Hyperdynamics to be between $750,000 and $1.4 million, it added.

Hyperdynamics said it will also issue 30,000 common shares and about 3.5 million warrants with an exercise price of $4 a share.

The settlement is expected to enhance cash flow from producing wells on the Kelly lease and give it full title to one of its top drilling targets on the Norris Lease, the company said.

On March 8, 2006, a lawsuit was filed against the company by Trendsetter Investors LLC alleging certain charges of fraud and seeking unspecified monetary damages.

Trendsetter Investors spokesman Jack Manning said the settlement is favorable to both parties.

The other lawsuit was filed against Hyperdynamics on May 5, 2006, by certain individuals alleging they had the pre-emptive right to invest in the oil firm's common stock. (Reporting by Esha Dey in Bangalore)