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HyperDynamics' SCS Makes Exploration Gains in West Africa
Wednesday June 18, 9:03 am ET
New Technology Identifies Large Hydrocarbon Indicators
HOUSTON--(BUSINESS WIRE)--June 18, 2003--HyperDynamics Corp. (OTCBB: HYPD - News) today announced that its wholly owned subsidiary, SCS Corp., is continuing to make substantial progress in the development of its immense oil and gas holdings off the coast of The Republic of Guinea, West Africa.
Pursuant to SCS' 2002 Farm-Out Agreement with USOil Corp., a report was submitted to the highest authority in The Republic of Guinea that outlined its exploration progress and findings. A permit fee was paid and a work plan approved which incorporates additional detailed seismic exploration commencing later this summer. The report included new information from the recently processed data acquired last year. Neil Moore, president of SCS, stated, "The work performed to date has identified numerous large targets that demand we move ahead aggressively towards drilling our first well as soon as practical."
SCS continues to discover new leads from the study of the older data and by the innovative application of new technology to the data acquired in 2002. SCS has engaged Seismic Ventures Inc. of Houston to reprocess and apply two new proprietary applications to the data acquired last year. According to Hank Saunders, chief operating officer of Seismic Ventures, "Our unique processes of Energy Absorption and High Frequency Resolution are two excellent techniques for confirming direct hydrocarbon indicators (DHI). They have a very high correlation to proven hydrocarbon production." Saunders went on to add, "Based on the application of our Energy Absorption process on one small area in the concession, we have located a DHI of at least 10 kilometers across. A lead of this size should assure those considering exploring in Guinea that the economics of the play make sense."
In light of these recent developments, Kent Watts, chairman and CEO, stated, "It is my duty to inform our shareholders that I believe our company's stock is substantially undervalued at this time. The acquisition of the Guinea concession has changed the speculative potential of our market. For example, Environmental Remediation Holding Corp. (OTCBB: ERHC - News), a company whose sole asset is a minority working interest in six blocks off the West Coast of Africa, has a market capitalization of over $200 million. My review and analysis indicates that if ERHC is worth anything, it's worth billions. In comparison, we have a much larger concession with 100% of the exploration, drilling and production rights and yet HyperDynamics currently trades at a market cap of less than $12 million."
SCS' 16 million acre concession, an area about the size of East Texas, is becoming an important aspect of the United States' strategy of shifting energy dependence from the Middle East. According to a June 12, 2003 article titled "Pentagon Planning for Long-Term Safari" by the Scripps Howard News Service, "As much as 15 percent of America's oil now comes from West Africa -- about the amount imported from Saudi Arabia. By next year, the West African portion is expected to jump to 20 percent." According to Offshore magazine's May 2003 article titled "West Africa Major Focus of Future E&P Spending," "Global E&P (exploration and production) expenditures are expected to top $130 billion in 2003. West Africa's vast deepwater frontiers will receive a fair portion of those dollars in the form of exploratory drilling." Exploration in West Africa is currently being conducted by Woodside Petroleum (ASX: WPL - News), Amerada Hess (NYSE: AHC - News), Marathon Oil (NYSE: MRO - News), Canadian Natural Resources (NYSE: CNQ - News), Agip, Shell (NYSE: RD & SC), ExxonMobil (NYSE: EOM - News), TotalFinaElf (NYSE: TOT - News), Kerr-McGee (NYSE: KMG - News), Vanco Energy, Premier Oil and Dana Petroleum (London: DNX.L), among others.
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