Replies to post #18927 on Hyperdynamics Corp (HDYNQ)

[tdbowieknife]

There is no clause in the contract that says they can renege on drilling because of low oil prices. Breach of contract is breach of contract. As operator they were still obligated to drill a well.

Rule64 posted and interesting post...

Re: Case suspended by order of Arbitrator

The implications being that if they still refuse following an arbitration ruling, HDY will be in a position to declare they will proceed with the well and make claim under the provisions of the contract for an arbitration award for Tullow and Dana to each pay their full share of the well costs, as per the stipulation in the JOA. Remember, Tullow is responsible for HDY's share as well.

If they got an order to that effect, what do you think the odds are that HDY could make financial arrangements to borrow funds up front to proceed with the well? I suspect, given that HDY indicated earlier that they had a willing financial backer willing to step in to allow them to take over Dana's share, it might not be out of the question that something is already in place, should the situation actually advance to that point. Perhaps Tullow and Dana are banking on the inability of HDY to make those arrangements to get out of their obligations. No well, no award (at least as I understand the language of the JOA).

More importantly, at that point what do you think the odds are that Tullow and Dana would still not cooperate? If they still refuse with an arbitration award hanging over their heads and HDY able to obtain financial backing, they still pay full cost, while simultaneously giving up any claim to a find.

..