To OTC Journal Members:
 

HyperDynamics (OTC BB: HYPD) Goes Into Outer Space

You are looking at HYPD's west African offshore oil and gas concession as seen from the space shuttle Columbia. Satellites are now going to start taking pictures of the 16 million acre concession in order to help identify the exact location for the first drill sites and identify other seeps the company might not have found yet.

According to Friday's press release, HYPD's has retained Infoterra, a leading European-based geospatial information company, to provide a complete satellite image-based Global Seeps Study over its entire 16 million-acre concession.

The summer's coring sample program yielded positive results for hydrocarbons, most of which favored the far more valuable oil over natural gas, in 55 of 57 samples. This news got the stock moving after a lackluster summer.

At some point in the not too distant future HYPD is going to have to move forward with its first drilling partner. As disclosed in past editions, HYPD has enough capital to complete the requisite seismic studies, but does not have enough capital to launch its own drilling program.

More evidence garnered out in front of a partnership will yield more favorable terms for HYPD shareholders.

In direct discussions with management I have learned the company feels there are enough potential drill sites to split the development into a number of zones, each with its own upside potential.

One year ago the tiny Western African island nation of Sao Tome had a major windfall when bids were opened to explore the Nigeria/Sao Tome Joint Development Zone. $500 million in bonus money was paid out by eight different companies just for the right to begin to drill. The bidders included Chevron/Texaco.

Each of these studies takes us one step closer to the ultimate prize which should send the stock into the stratosphere and find it cruising along with the satellites.

The six month chart has one striking feature. Note the large gap in mid October. The gap occurred when the company announced the results of its coring program. The market now believes the eventual development of the concession in some form is a fait accompli.

I am surprised the stock has not made any attempt to come back down and "fill the gap", as will happen in most cases. A gap on a chart like this is almost like a vacuum- and nature abhors a vacuum.

Since the stock has not come back and tried to fill the gap, one could assume the stock is now poised to try to attain higher levels. A move above $3.72 would take the stock to a new all time high, which would be extremely bullish.

Energy stocks continue to be the darlings of Wall Street. The next four years under the Bush Administration should see a renewed enthusiasm for new oil exploration outside the Middle East. With a little luck HYPD will play a part in that movement.

Here is the complete text of the news release for your review:
 

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