By Vishal Krishnan
Nov 20 Oil and gas explorer Hyperdynamics Corp
said it will sell a 40 percent interest in its primary
asset, a license offshore Guinea, to Britain's Tullow Oil Plc
Tullow will pay Hyperdynamics $27 million for its past costs
and also carry a share of the company's future expenses up to
Hyperdynamics, whose liquidity has shrunk due to
higher-than-expected drilling costs, said in April it was
looking to sell about half of its 77 percent stake in the
25,000-square-km (9,652-square-mile) license.
"With this money, they will be able to survive another
year," Global Hunter Securities analyst John Malone said.
Reuters, quoting a source, reported earlier this month that
Guinea was reviewing three resource agreements, including one
with Hyperdynamics. But Chief Executive Ray Leonard told Reuters
on Tuesday there was no review of its contract with Guinea.
"We have met with the government... there has been no
mention whatsoever, by any ministerial people, of a review of
our contract," Leonard said. "We are in touch with the
government and it has (also) supported the deal with Tullow."
The sale to Tullow is expected to close by year-end
following an approval from Guinea's mines and geology ministry.
Upon closing, Hyperdynamics will have a 37 percent stake in
the concession, Tullow 40 percent and Dana Petroleum E&P Ltd 23
"The reason we have gone down to 37 percent is that after
the initial well it was clear to us that it was time to bring in
a party with the expertise to drill in deepwater prospects,"
Leonard said, referring to Tullow.
Hyperdynamics shares, which rose as much as 29 percent on
Tuesday, reversed course to trade down 7 percent at 84 cents in
afternoon session on the New York Stock Exchange.
KLR Group analyst Jeffrey Hayden said the deal value was
slightly on the light side of what he had been expecting.