If you extract a sentence or two from the transcript below ...
Ray Leonard >>> " I think the best example is offshore Ghana where the Jubilee field has been delineated at 1.8 billion barrels. And, as a number of you [unintelligible] Exxon offered 4.2 billion dollars for a 23-percent share with Kosmos Energy, and while that seems to have been preempted by the Ghanaian government with backing from the Chinese, Kosmos is still going to get their payout—even though it may not be from Exxon.
That’s the type of play that we are looking at, and that’s the type of payoff we think we have as we actually have several of those turbidite-fan prospects in the offshore." <<<
What's our 77% of 2.3 billion barrels worth once it is proved? We are finally looking golden !!!
Have a great day !
Best to all ... MU_Redskin1
Ray Leonard, IPAA Oil & Gas Symposium, April 13
HYPERDYNAMICS BACKGROUND
“ My name is Ray Leonard; I am the chief executive officer of Hyperdynamics. And, as many of you are wondering, Hyperdynamics is not your average name for an oil company.
Hyperdynamics [the Company] was initially a software company, and after the ‘dot-com boom’, they decided to change into a [geophysical] software company, and they acquired, along with a large geophysical database and geophysical software, the drilling rights to offshore Guinea. And, over the years, everything else fell away, and the offshore rights became the core of the company. And there’s a lot of you who have been following west Africa as have probably seen, northwest Africa has become an exploration hotspot, and that offshore drilling rights in Guinea became really a [potentially] very profitable and very exciting asset to have.
The Company is an independent E&P company based in Houston, Texas, and is a 77-percent interest holder to a 25,000 square-kilometer offshore license [slightly bigger than Vermont], one of the largest licenses in west Africa. The area has a number of prospects in the billion-dollar range with [in respect to?] recent discoveries both north and south of the acreage. And what’s also as important, since July 2009, which is the time I came on board, there’s been a significant change in the management of the company and in the staff of the company.
My background: I spent about 20 years with Amoco; one of my positions there was as the division geologist for west Africa; my last position [with Amoco] was as the Vice-President of Resource Acquisitions located in the former Soviet Union. Since then I have had executive positions with Yukos, MOL [the Hungarian oil & gas company], and before joining the Company I was Vice-President of The Kuwait Energy Company based in Kuwait City.
My executive vice-president for commercial affairs, Bill Young, was most recently the commercial head for British Gas, a 40-billion-dollar company in the UK.
Steve Barrett, our exploration VP—his last position was with Nations Petroleum, a very successful independent company in the former Soviet Union.
Jason Davis, our CFO, joined at the same time I did in July; his last job was as CFO for Particle Drilling Technologies.
We also have an extremely strong Board [of Directors]:
Bob Solberg, the Non-executive Chairman, was the president of worldwide E&P for Texaco; after the merger with Chevron, he has been on a number of corporate boards; he’s also the chairman of Scorpion Drilling.
And then also Herman Cohen, who was [formerly] an Assistant Secretary of State for Africa; he is certainly exceptionally helpful in the west Africa political environment.
And Lord David Owen, the former Foreign Secretary for the U.K., who was also the chairman of Yukos International, brings E.U. and U.K support, as does Herman Cohen for U.S. Government support.
So, politically and technically, this is an extremely strong team.
HYPERDYNAMICS IN GUINEA
Northwest Africa is an interesting area. As I mentioned before, I was the division geologist for Africa in the 1980s, and actually we were the first ones to take out concessions in Liberia and Sierra Leone. The problem was that for us “deep water” [back then?] meant drilling in 200 meters of water, and, ironically, we drilled a well only 15km from the recent Venus discovery by Anadarko—the difference was that ours was on the edge of the shelf, and theirs was in the deep water.
The opening of the deep water has really opened the potential for northwest Africa. I think the best example is offshore Ghana where the Jubilee field has been delineated at 1.8 billion barrels. And, as a number of you [unintelligible] Exxon offered 4.2 billion dollars for a 23-percent share with Kosmos Energy, and while that seems to have been preempted by the Ghanaian government with backing from the Chinese, Kosmos is still going to get their payout—even though it may not be from Exxon.
That’s the type of play that we are looking at, and that’s the type of payoff we think we have as we actually have several of those turbidite-fan prospects in the offshore.
Now, when I was working in the 1980s, “west Africa and oil” meant a line from Nigeria down to Angola. But, a generation later, the northwest [of] Africa is really the place that can be a lot more profitable, and there are a few major reasons for that:
One, the fiscal terms are a lot better: you have 80 to 90 percent government “take” down in the Nigeria-to-Angola area, whereas your government take is more in the range of 50 percent in northwest Africa. So, per barrel, your value is up to 3 to 4 times higher in northwest Africa.
And, in addition, there are no OPEC quotas, and the countries in northwest Africa are “hungry”—if you find something, they want you to put it on stream as fast as possible. There are as few barriers as possible in your way. So it’s a much better place for exploration if you’ve got the prospects—better terms, faster development.
In “de-risking” the asset in Ghana, you’ve got, um…. excuse me, in Guinea… Freudian slip there; it’d be nice if it was Ghana—there are really three stages:
We’ve completed the first stage, and that’s to do 2D seismic to identify the play trends and the general prospects. And we took another step here, which was very important: with satellite imagery, we identified oil seeps in a number of areas, and then we got a boat out and did a geochemical coring exercise to get subsurface and surface samples and water samples to verify the seeps. We identified both Cretaceous and Jurassic source rocks. So we know that we have an active petroleum system there.
The second stage (and we’re putting out a tender this week actually for a very large 3D seismic program that should cover 3,500 to 4,000 square kilometers) is to go over three of the best prospects we see, and we are committed by contract with the government [of Guinea] to begin drilling by no later than the end of 2011—so our exploration drilling will be starting at that point. (The seismic run you see there [on a presentation slide] covers one of the turbidite fans that we see; it’s a very large and obvious structure that is actually about the size of the Jubilee prospect in Ghana.)
A second factor is bringing in additional participants. We came in this with 100 percent interest. We acquired one partner, Dana Petroleum: they’re very active in northwest Africa, active in Morocco and Mauretania where they’ve participated in discoveries; also, they’ve taken a position in Senegal. They acquired a 23 percent share [in HDY] for 19.6 million dollars.
We have had a letter of intent with Repsol to acquire another 37 percent; their exclusivity has lapsed [as of 11 March 2010]. However, they are still negotiating to try and close that deal. However, after their exclusivity expired, several other companies have stepped in. So we have an active competition to get that third slot, which is a 35 to 40 percent operating interest. So we are going to have a third partner there, a major company as an operator. [I take this to mean that HDY and Dana are the other two partners. –E.H.]
THE GEOLOGY
So what does the geology look like in more detail?
We see 3 prospect trends. The dashed area shows the specific concession area that we have. The gray outline shows the original concession, and then we were able to, after acquiring the [2D] seismic, basically able pick the 25,000 sq.km. that we wanted, which is one of the largest concessions in west Africa, and it covers the 3 main prospect trends.
One [of those trends] is the turbidite-fan area; the Anadarko east [?] discovery is right here [referring to a presentation slide]. So this is basically the same play type. We have a fan here, another here, and another here, so you have multiple prospects there.
Then we have very large lower-Cretaceous/Jurassic structures in ultra-deep water—we have one here that’s over 100 kilometers long [over 62 miles].
And then we have a series, right on the shelf edge, of smaller 4-way closures that have some direct hydrocarbon indicators.
So you have multiple prospects here—and this is really a “petroleum province”. I know when I was with Amoco, the company was really based on 2 or 3 international areas: one in Egypt and one in Trinidad. And the value to Amoco was, it was a large enough area that you not only had development projects but [also] consistent exploration prospects. So this is the type of concession that big companies are interested in. It really reaches the size that now you have super-majors far larger than the Amocos of the day when I came into the industry. They’re looking for projects that can have an impact on the bottom line of companies that size, and the Guinea offshore concession actually does reach that size.
You also can see there the locations of some of the active petroleum seeps; they’re not only by the coast where the formations crop up at the seabed, but also there are seeps in the middle of the concession area.
Just to look a little more at the details: This is one of the turbidite fans, you can see very clearly on the seismic it’s approximately 1,000 sq.km. in size, and this is a cross-line, and it’s hard to see from here, but you see this and you get very excited, because you have a mid-Cretaceous event here which disappears under the middle of this, under the area that’s under 4-way closure, which indicates some special event here, it has a different velocity that’s masking this reflection underneath which could be a direct hydrocarbon indicator.
The other type of prospect, the deep water, the lower-Cretaceous structures, it’s just a big huge anticline, that as I said before is over 100km long, and as you have identified active Jurassic source rocks in the area, this is another potential, although again, as it’s in 1500 meters of water, you’re really looking at an expensive deep-water well. This may not be the first well that’s drilled.
AI
