Hyperdynamics' CEO Reports Valuable Progress and Superb Positioning for 2008
Tuesday January 15, 7:00 am ET
First 3-D Seismic In History Specified for Offshore Guinea
HOUSTON--(BUSINESS WIRE)--Hyperdynamics (AMEX:HDY - News) today announced that its board of directors has set its annual shareholder meeting, regarding its fiscal year end June 30, 2007, for Wednesday, February 20, 2008 at 10:00 AM CST. The meeting will be for shareholders of record as of January 2, 2008, and will be held at Sugar Creek Country Club in Sugar Land, Texas. Details have been filed with the SEC on Schedule 14A.
The following is this year’s shareholder letter written by the Company’s Chairman and Chief Executive, Kent Watts.
“January 14, 2008
To our Shareholders:
We greatly appreciate your support over this past year. I believe that our market and you, our shareholders, will soon clearly understand that we have made valuable progress in the past year and that we are positioned to have a fantastic 2008.
This past year has challenged us in many ways. We are exploring for world-class oil and gas reserves in a 31,000 square mile offshore concession that is in the hottest exploration region in the world. Hereunder I will explain our company’s major progress. However, to first set the stage, I believe that you should be aware that in the past year we have encountered intense petro-politics. The world’s energy shortage is growing more acute every day and at the same time our asset becomes more valuable. We have successfully dealt with political attacks all year and this is why a strong presence in Guinea has been our number one priority and has produced our number one achievement.
In 2008 we are focused more deeply than ever on our exploration work, while our business and political status in Guinea continues to grow. I have five categories to report about that reflect our progress in 2007. They are:
1) Guinea political and business status,
2) Joint venture partner status,
3) 2007 exploration program accomplishments,
4) Status of building our internal exploration team, and
5) Our superb positioning for success in 2008.
Guinea political and business status
Our organization in Guinea, led by our Vice President of Guinea Affairs, Mr. Famourou Kourouma, has a strong organizational foothold inside Guinea and our in-country team is formidable at protecting our interests.
A presidential delegation, led by Secretary General of the President of the Republic, Mr. Sam Mamady Soumah, visited us in Sugar Land, Texas in September 2007. After the Secretary General’s report to the Chief of State, President Lansana Conté, the President invited me to visit Guinea and to report on our investment and exploration plans. As a result of our work in Guinea, the President’s office deals directly with us regarding the 2006 Production Sharing Contract and we have been told to expect more positive changes in their government that will help us streamline and accelerate our work in the near future. On December 5, 2007, a presidential decree clarified substantial far reaching powers of the Secretary General to administer the government. On December 10, 2007, former Assistant Secretary of State for African Affairs, Mr. Herman (Hank) Cohen, traveled with us to Guinea. Our group met with the President, the Secretary General, and the President of the National Assembly, Mr. Aboubacar Somparé. In these meetings, we were consistently assured that positive changes were in process. Hank, Famourou, and I also met with US Ambassador to Guinea, Phillip Carter III. It’s important for you to know that we continue to have the U.S. government’s support and the Guinea government is aware of such support. In August 2007, Ambassador Carter replaced former Ambassador Jackson McDonald as US Ambassador to Guinea. Over the last few years we have worked extensively with Ambassador McDonald who was extremely supportive and consistently gave us valuable political guidance. Since then, we are continuing with Ambassador Carter regarding all our work in Guinea. This last year we also began working with our local Congress members. We engaged the lobbyist firm Patton Boggs this year to protect our interests in Washington D.C.
As part of our corporate responsibility goals, Hyperdynamics supported efforts by American Friends of Guinea that helped to save lives of many children during a very serious cholera outbreak. Our combined public relations strategies and humanitarian efforts in Guinea have raised our business profile in Guinea as a responsible corporate citizen.
Joint venture partner status
Early in 2007 we solicited potential joint venture partners to join our exploration efforts offshore Guinea. During the year we signed approximately 20 companies to confidentiality agreements and held meetings to evaluate their level of interest. In the process, by the middle of the year, we determined that, while we remain open to negotiating joint venture arrangements, we could achieve much greater shareholder value by first advancing our exploration efforts to the point of having a portfolio of drillable prospects. Most of the potential partners expressed interest in our project and have asked for updates on our progress. We attend monthly meetings as a member of the West African scout group whose participating oil companies invest in exploration and production projects offshore West Africa. This provides us a forum to present regular updates to many of the companies that may have an interest in partnering with us in the future. We believe our efforts this year have provided a foundation to build on. We continue to talk with potential partners on an ongoing basis and expect the interest in our project to grow substantially in 2008.
2007 exploration program accomplishments
Our exploration work this year has resulted in major progress. In August we ramped up our 2007 exploration program towards developing our hydrocarbon plays in our concession. From our information base developed from previous exploration programs since 2002, we designed and implemented our going forward exploration program. To date, our studies comprise the largest knowledge base in existence concerning the Guinean offshore region and the 2007 program continues to build on this critical information base. We acquired additional 2-D seismic from a third party together with gravity and magnetics data and began to reinterpret as many as 25 leads from our seismic database. The reinterpretation of our satellite oil seeps study reported the existence of light crude oil seeps in our concession. Our historical exploration efforts have identified plays such as the Guinea Bissau salt province, Lower Cretaceous/Upper Cretaceous slope-fan deposits, Paleozoic tilted fault blocks, Mesozoic syn-rift half grabens, Tertiary deltas and turbidites along with Tertiary channel sands. Our exploration work since August 2007 has verified that we have the Transform Margin fairway in our concession. This is part of the same play that has produced at least 39 discoveries offshore West Africa collectively containing a world-class level of oil reserves. Based on our critical work in 2007 we can prioritize our activities and we are currently scrutinizing the Transform Margin play. Our 2007 program was a major success that is leading us in the right direction for a future world-class discovery of our own.
Building our internal exploration team
We have taken major steps and embraced our original strategy to build a formidable exploration team. This last year we made the decision to bring our core exploration team in-house and to add extensive oil and gas exploration and production experience to our board of directors and corporate management team. This decision was critical for positioning us to accelerate our timelines for exploration, to retain more value, and to maximize returns for our shareholders. We hired Mr. James R. Spear as our Vice President of Exploration and Chief Geophysicist. His past experience includes working successfully in 42 major hydrocarbon basins around the world. His enthusiasm and depth of experience is the cornerstone of our efforts to build our exploration team. Jim is leading the process of assembling our in-house team and we expect to make additional announcements as we bring on new talent. In December, Mr. Charles H. Andrews joined Hyperdynamics’ Board of Directors as a next step to add exploration experience at the top. Currently we continue to evaluate potential board members and to recruit additional geoscientists and geo-technical personnel. We are dedicated to building our board and exploration team and we will be steadily assessing appropriate additions as we move forward in 2008. As part of an extensive forward 2008 exploration program, our exploration team has configured multiple grids over several prospects for Guinea’s first 3-D seismic data acquisition in history. Our future announcements will provide updates about the 2008 program.
Our superb positioning for success in 2008
It is my sincere hope that you are assured that we are doing the right things to provide greatly enhanced shareholder value in the future. We have a steadily growing relationship with Guinea and have built a strong foundation for extended discussions and negotiations with many potential joint venture partners. Additionally, based on the positive results of our 2007 forward exploration program, we have advanced and refocused our exploration efforts to hydrocarbon plays that have world-class levels of proven results in West Africa. Finally, we have made major progress in establishing a highly experienced and successful exploration ability in-house, giving management technical control of our exploration process. We are now prepared to move forward with 3-D/2-D seismic data acquisition programs that should increase our chances for drillable prospects and ultimately a discovery.
We are superbly positioned for realizing the value of our oil and gas concession offshore Guinea. I would ask you, our shareholders, to recognize the progress we have made and to understand the extensive work ahead for us. We most certainly appreciate each of you and I am asking for your continued support towards the goal of making a world-class discovery. Thank you for your investment and keep watching for our update