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Tullow oil ‘farm-in’ to Guinea concession

  • SOURCE: | Editor
  • The Hyperdynamics Corporation of Guinea, yesterday announced that its wholly owned subsidiary, SCS Corporation Limited, has entered into an agreement with Tullow Guinea Limited, which is also a subsidiary of Tullow Oil Public Limited Company, for the sale of a 40% gross interest of Hyperdynamics’ oil and gas exploration concession offshore Guinea and the transfer of operations as well.

    In a press statement released by the Hyperdynamics Corporation yesterday, it indicated that subject to completion of due diligence, the sale was expected to close by the end of year following the satisfaction of certain closing condition and approval of the assignment   Ministry of Mines and Geology.

    It said, at closing the interest of SCS, Tullow and Dana Petroleum E&P Limited in the concession will be 37%, 40% and 23% respectively.

    According to the terms of the agreement, Tullow will reimburse SCS in respect of its past cost running into $27 million cash at closing, and will carry SCS’ participating interest share of future expense up to a gross expenditure cap of US $ 100 million, from the date of entry into the next exploration period until 90 days after the drilling of the well.

    Tullow is also expected to carry SCS’ share of costs associated with an appraisal well of the initial exploration well if drilled but subject to an additional gross expedition cap of $100 million.

    Speaking at the signing ceremony, President and Chief Executive Officer of Hyperdynamics, Ray Leonard said “We are delighted to have reached this agreement with Tullow, Tullow fulfills all the requirement we were looking for; expertise and exploration success in the Atlantic Margin off West Africa – particularly the transform Margin play that is present on the Guinea acreage – along with experienced in deepwater production, the financial strength needed to explore this large block and availability of a suitable rig to initiate the deepwater drilling. Our decision to choose Tullow was made in consultation with the Guinea Ministry of Mines and Geology.”

    Again, he said, “We believe this agreement with Tullow enhances the future of Hyperdynamics’ Guinea exploration program and represent the best opportunity for us to realize maximum potential value for our shareholders as we explore the potential of this large and prospective petroleum basin.”

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