Replies to post #17013 on Hyperdynamics Corp (HDYNQ)

[Joeboo]

Hillzman, I think they should be working on a settlement as well. I also think a support decree from the GOG would solve the problem. Something has to give next week... If you analyze the FM claim based on the DOJ investigation it in no way impacts Tullow. They would impose a monitary fine at most. The only thing that could impact Tullow is if the corrupt government of Guinea tries for a third time to pull the PSA (the same PSA NO ONE WANTED UNTIL SCS DEVELOPED PROSPECTS) If any correspondence was delivered with that implication it would be an 8k event. Stay calm people this will be resolved - imo.

[Rule_62]

Yes Guinea is certainly the key player in this mess, and have been right from the beginning.

What I'm finding disconcerting from the little information that we're getting regarding the Guinea BSGR investigation is that it appears to be rooted in 2008. This is the same time frame (2008-2009) where the US Embassy concerns about HDY were being expressed. It's also the same time frame when it appears that HDY was receiving conflicting treatment from various Guinea officials.

I suppose some key dates (5 years later) taken from the HDY news archives coming down the pipe as far as the DOJ are

Sep 14, 2009 - Hyperdynamics Corporation Signs Memorandum of Understanding with Guinea Government

Sep 30, 2009 - Kent Watts Resigns From Hyperdynamics' Board of Directors

Mar 25, 2010 - Hyperdynamics Reaches Agreement With Government of Guinea on Production Sharing Contract Terms

However, that Sept 30, 2009 PR contains other important dates pertaining to the gifting of shares, and were outlined as follows:

Watts is one of several Hyperdynamics shareholders who own an aggregate 2,406 shares of the Company's Series B Preferred Stock and 4,980,000 warrants. These holders have agreed to convert their preferred stock to approximately 17.8 million Hyperdynamics common shares. The holders will then donate the equivalent of 3 million shares of common stock and warrants to the American Friends of Guinea, a charitable organization through which the Company continues to provide humanitarian aid to the Republic of Guinea. In addition, the holders will surrender the equivalent of 3 million shares of common stock and warrants back to the Company.

The issuance and disbursement of shares will be as follows:

The 2,406 shares of Series B Preferred Stock (par value of $1,000 per share and $0.135 conversion price) will yield 17,822,222 gross shares. Two million of these shares will be donated to the American Friends of Guinea, subject to certain lock-up restrictions, and the remaining 15,822,222 shares will be issued to the holders and the remaining 2 million shares will be given back to the Company. Additionally, the holders will donate 2 million shares to the American Friends of Guinea in annual one-third increments, with 670,000 shares donated on or before July 1, 2010; 670,000 shares donated on or before July 1, 2011; and 660,000 shares donated on or before July 1, 2012.

Of the holders' total warrants to purchase 4,980,000 shares of common stock, 1 million warrants will be donated to the American Friends of Guinea in annual one-third increments, with 333,333 warrants donated on or before July 1, 2010; 333,333 warrants donated on or before July 1, 2011; and 333,334 warrants donated on or before July 1, 2012. An additional 1 million of the holders' warrants will be cancelled.


It would seem that any assumptions regarding time limits imposed on the DOJ might be premature. Nor have I ever felt all that comfortable about that whole donation business. More than once in the past months I've wondered what was driving it? What is it that Ray and the BOD uncovered, and was this entire thing an attempt to right a wrong without reporting it? Is the wrong at stake here, as far as Ray is concerned, one of not reporting transgressions that occurred prior to his watch?

But then it's never been the DOJ investigation that concerned me so much as what else it might trigger. Especially when it comes to a Government in Guinea that appears to be quite willing to revisit the past (aided of course, by a cooperative US Government that won't exactly be shy about turning over anything they uncover, regardless of any time stamp that might bar them from taking any direct action).

All that said, I suspect the next two news events will be a NYSE non-compliance notice, followed by a not so pretty 10-Q. And of course, whatever dilution/re-financing wild card that pretty much has to be dropped sooner than later to keep any hope afloat while all this plays out. Unless of course, Guinea plays their wild card first.