Hyperdynamics Corporation, a company with assets in Guinea, has reached a settlement with Tullow and Dana Petroleum, ending their ongoing arbitration.
To remind, Hyperdynamics’ Guinea subsidiary SCS had alleged that Tullow and Dana failed to meet their obligations over a block offshore Guinea in which the participating interest were owned 40% by Tullow, 37% by Hyperdynamics and 23% by Dana Petroleum.
Hyperdynamics through legal actions sought a determination that Tullow and Dana were in breach of their contractual obligations requiring Tullow and Dana to move forward with well drilling activities offshore Guinea.
In a statement on Wednesday, August 18, 2016, Hyperdynamics said its Guinea subsidiary released all claims Tullow and Dana. In turn Tullow and Dana issued to the Government of Guinea a notice of withdrawal from the Guinea Concession and Production Sharing Contract (“the PSC”) effective immediately. Tullow and Dana also transferred their interest in the long lead items previously purchased by the Consortium for $8.1 MM in preparation for the drilling of the Fatala well, and net cash of $686,570 to SCS.
SCS has also agreed to pay Dana a success fee based upon the certified reserves of the Fatala well if it results in a discovery.
As the sole remaining owner of the Guinea Concession, Hyperdynamics’ SCS is currently meeting with the Government of Guinea regarding its submission for a one-year extension until September 22, 2017. Without an extension, Hyperdynamics said, the current concession expires in September 2016.
SCS has also proposed and is in the process of negotiating a PSC Amendment and a work program and budget for the Extension period, should one be granted, that would include a minimum work obligation to drill one deepwater exploration well in the Guinea offshore Concession in April 2017.
“There can be no assurance that SCS will obtain the extension or successfully negotiate the PSC Amendment. If the extension is granted the next step for the Company will be to seek financing for the planned well by either raising the funds or taking a partner, or a combination of both,” Hyperdynamics said on Wednesday.
Offshore Energy Today Staff