Newsletter

Hyperdynamics Offers Further Confirmation

August 24, 2004
Volume V, Issue 82
Home Page : www.otcjournal.com
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To OTC Journal Members:
 

Hyperdynamics (OTC BB: HYPD) Gets Further Confirmation

Do you believe there is viable recoverable oil under the surface in this concession off the coast of West Africa? The drilling rights to this concession are owned by HyperDynamics. Itspans 16 million acres, and has been awarded to HYPD by the Republic of Guinea.

2D seismic readings were completed last year. They took readings along 4,000 kilometers, and learned there are hydrocarbons literally bubbling out of the ground below the ocean's surface within the area.

More seismic readings are being taken currently in order to build a strong case for eventual exploitation of the area. In the interim, HYPD has hired Oslo based Petroleum Geo-Services, a world renowned independent third party, to evaluate the current data.

According to a press release issued by HyperDynamics late yesterday, PGS has gathered all the seismic data and completed Phase I of the review. The preliminary report, delivered to HYPD on August 19th, confirms HYPD's initial findings.

HYPD's VP of Geology Robert Bearnth states: "All information which we have reported on before is being supported, even to the extent of agreeing whole heartedly that there is indeed a working petroleum system throughout the concession. This system includes significant hydrocarbon sources, structures, fault migration paths, reservoir and potential traps.  We also have conclusive evidence of three ancient deltas with very thick sedimentary deposits. There is additional consensus that gas seeps reported on earlier are of hydrocarbon origin.” 

HYPD has not delivered much in the way of news over the past several months. The company has been engaged in completing a geochemical coring program using the data from the first seismic readings.

Once all the data is compiled, and the seismic information has been interpreted and put in report form by both the company and the independent third party, HYPD will move forward and attempt to execute on a plan to develop the concession.

Just how a plan can be structured, and who and eventual partner might be, is out in the future. There are no guarantees the company can develop the concession, or what the company might make in some sort of revenue sharing arrangement.

However, evidence is building which suggests this tiny company could be sitting on a mother lode of a find. If so, shareholders from these levels have an opportunity to make significant returns when it all comes together.

You are probably wondering why the stock has traded so poorly against a backdrop of sky rocketing oil prices. In short, risk premiums have dissolved in small and microcap stocks. Most have pulled by 30% to 50% from previous highs. All the standard reasons have investors on the sidelines: geopolitical uncertainty, the Presidential election, skyrocketing oil prices, etc. HYPD has not escaped the sell off.

High oil prices have no effect on the risk level associated with this stock. It is still highly risky and will continue to be so until investors learn of a signed arrangement to develop this concession.

High oil prices effect the upside on the stock. If and when the concession is developed, the company will simply make more money. Until that time, the risk side of the equation becomes a little more diminished each time the company offers more evidence of a significant hydrocarbon reserves.

The chart shows the stock is now camped on a long term support line. This support level developed in 2003 and the first few months of 2004. If it holds, the current level of around $2 could prove to be an excellent level to accumulate.

In a strange twist of fate, a drop in the price of oil might help the stock trade better as the market continues to firm up and perhaps rallies strongly towards the end of the year.

Here is the complete text of today's press release on the preliminary results:
 

Press Release Source: Hyperdynamics Corporation 

PGS Completes Phase I of Seismic Interpretation

Tuesday August 24, 10:02 pm ET 

Technical Consensus Reached for a Working Petroleum System 
Hyperdynamics' CEO Says Asset Value Continues to Grow

HOUSTON--(BUSINESS WIRE)--Aug. 24, 2004-- SCS Corporation, the energy subsidiary of Hyperdynamics Corporation (OTCBB:HYPD - News), awarded a contract for 3rd party interpretation services to Petroleum Geo-Services (PGS) on August 6, 2004. PGS has worked diligently since that time and completed phase I of the contract interpretation work. PGS has now gathered all of its information and interpreted data and traveled back to London. Over the next several weeks they will be completing their analysis and final reports. In the process of completion, they plan to integrate other West African known geological information as well as the specific results expected shortly from SCS's geochemical coring program being performed by its contractor TDI-Brooks. 

On August 19th a preliminary report was given to SCS management and Hyperdynamics' CEO. When asked about the content of the preliminary report, Robert Bearnth, EVP of Geology, said that "it is very nice having an independent geological team corroborating our findings. The consensus now is that there is everything required in the region to support commercially viable hydrocarbons. All information which we have reported on before is being supported, even to the extent of agreeing wholeheartedly that there is indeed a working petroleum system throughout the concession. This system includes significant hydrocarbon sources, structures, fault migration paths, reservoir and potential traps. We also have conclusive evidence of three ancient deltas with very thick sedimentary deposits. There is additional consensus that gas seeps reported on earlier are of hydrocarbon origin." 

Mr. Kent Watts, CEO for Hyperdynamics stated that, "PGS's preliminary report could not have been more positive. All of our exploration work is continuing to grow our asset value. It is mind boggling to me that this value has not yet been reflected in our share price. However, I am confident that our consistent progress will ultimately correct this market disparity." 

About PGS 

PGS is a technologically focused oilfield service company principally involved in geophysical and floating production services. PGS provides a broad range of seismic- and reservoir services, including acquisition, processing, interpretation, and field evaluation. PGS also owns and operates four floating production, storage and offloading units (FPSOs). PGS operates on a worldwide basis with headquarters in Oslo, Norway. For more information on Petroleum Geo-Services visit www.pgs.com. 

About Hyperdynamics 

Hyperdynamics uses integrated information technology to help manage and invest in companies with substantial potential for growth. Hyperdynamics' internationally active oil and gas subsidiary, SCS Corporation, owns rights to explore and exploit acreage of offshore West Africa. Its other subsidiary, HYD Resources Corporation, focuses on domestic oil field services and unique opportunities for participation in and drilling for domestic production. 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein that are not historical are forward-looking statements that are subject to risks and uncertainties and could cause actual results to differ materially.

--------------------------------------------------------------------------------
Contact: 
     Hyperdynamics Corp.
     Kent Watts, 713-353-9400
     kent@hypd.com
      or
     Stock Enterprises
     Jim Stock, 702-274-5400 (Investor Relations)
     stockenter@aol.com

--------------------------------------------------------------------------------
Source: Hyperdynamics Corporation



 


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