Annual Shareholders Meeting
Questions & Answers Session
Q: In regard to the strategy going forward, are you looking to diversify beyond Guinea?
A: The most important thing is for the company to focus on the Guinea project. We must make sure that we 1) complete the PSC clarification with the Government of Guinea, 2) conclude the farm-out process with Dana and Repsol and collect the $51 million in combined entry fees that they will owe us, and 3) continue our work program with the objective of spudding the first exploration well during the fourth quarter of 2010. That said, we also do not want Hyperdynamics’ future to be tied strictly to one project. We are in the early stages of thinking about other opportunities that will diversify our portfolio.
Q: How confident are you that you will obtain the PSC clarification by March 11, 2010? What factors contribute to your confidence?
A: First of all, nothing is done until it is done. There are no guarantees, but everything looks good for getting the PSC Amendment signed soon. Our confidence comes from three things – 1) we have basically reached agreement on all points and we (Hyperdynamics) have initialed the agreement, 2) the government, which was in transition until recently, is now in place, and 3) the government is motivated to proceed.
Q: What are the steps required to attract institutional investors to invest in the company?
A: We must continue to complete the milestones we have laid out in a timely fashion. We have done a good job of meeting the promises we made over the last seven months, but we need to complete the PSC Amendment in order to attract institutional investors. Once the PSC Amendment has been signed, we will have a pretty compelling story. At that point, HDY would plan a road show to get the Company’s story out to the institutional investor community.
Q: What is the expected cost of the 3D survey?
A: The area over which we would plan to shoot the 3D survey needs to be decided and that will help determine the ultimate cost. In order to get adequate coverage of the leads and areas that look most promising to us now, we could expect to spend on the order of $30-50 million. Some of the features we have seen to date suggests that there exists the possibility of giant or super-giant fields (500 million barrels to 1 billion barrels of oil equivalent).
Q: Please discuss the Right of First Refusal in regard to the 64% relinquished area.
A: We believe that we have retained the best acreage. It is difficult to judge how likely it is that we put want to pick up any of the acreage we relinquished. Also, there is the issue of what it means to match. If it is a tender round, it is pretty clear. However, if the proposal includes other elements, such as infrastructure investments, for example, it may be difficult for Hyperdynamics to match.
Note: The questions listed above are representative of those asked during the meeting, and the answers have in some cases been shortened while retaining the substance.
