To OTC Journal Members:
 

HyperDynamics (OTC BB: HYPD) Completes Phase II

Hyperdynamics kicked off the end of summer with an impressive rally this morning on a day when you would expect minimal interest in microcap stocks. 

In early trading, HYPD charged up to $2.73 in the first half hour on about 100,000 shares of volume. The stock has not traded this high since early June, and rarely trades that kind of volume in the first half hour.

After the market closed today, HYPD put out news which might help explain the early volume surge. As it turns out, the company has completed Phase II of its seismic studies.

According to a press release which came out after the market closed, HYPD completed its core acquisition studies in its 16 million acre concession off the coast of the west African Republic of Guinea.

57 core samples were taken at strategic locations in the concession. These samples have been delivered to the TDI-Brooks International’s laboratory at College Station, Texas to begin the geochemical analysis processing.

Once completed, the results will be used to pinpoint locations for 3D seismic studies, which is the final step prior to drilling the first wells.

Here's an overview of the current status of HYPD:

What we know:

• We know the 2D seismic studies completed late in 2003 suggested a high probability of significant recoverable hydrocarbons in the concession.
• We know there have been a number of very significant hydrocarbon discoveries in the immediate geographic area which have sold at auction for hundreds of millions of dollars.
• We know the concession contains the same kind of geologic delta formation found at many significant oil fields world wide- i.e. the Gulf of Mexico.
• We know the company has enough capital to complete all the required seismic studies to identify the first drilling sites, but does not have enough capital or infrastructure to develop the concession on its own.
• We know the company is currently trading at a $100 million plus market valuation- there is plenty of upside if any number of factors quantifies the potential value of the concession, and plenty of downside if the company never delivers a viable development program.
• We know the former Chairman of the Board of Ford Motor company, and former board member at Kellog's and Shell Oil, has joined the board of HYPD.

• We don't know how long it will take to complete 3D seismic studies.
• We don't know if or when a "deal' will be made with a deep pockets partner to provide the capital and drilling expertise to begin development of the concession.
• Assuming a "deal" is eventually made, we don't know who it will be with, and what it will or could mean to shareholders of HYPD.
• We don't know if the hydrocarbons that could eventually be recovered are natural gas or the far more valuable commodity: oil.

The uncertainties of the future are keeping the market cap reasonable. When the blanks are filled in, the stock could be trading at much higher levels.

In the interim, the stock certainly greeted the first post-summer day of trading with a nice move to the upside. The stock surged on strong volume, and spiked to a high of nearly $2.73 in the early going.

The volume is a big surprise in light of the timing. Today is the first trading day after a long weekend and a very quiet summer. One would expect anemic volume levels, which should pick up as we get closer to October.

HYPD traded 226,457 shares today, which is the second highest volume day since the end of April. The stock is exhibiting some interesting characteristics which suggest today's breakout could be signaling a technical trend reversal. The high volume to the upside is the most reliable indicator that today's surge could have some follow through.

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

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