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(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.
16 million acres, and has been awarded to HYPD by the Republic of
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
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
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
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
PGS Completes Phase I of Seismic
Tuesday August 24, 10:02 pm ET
Technical Consensus Reached for a Working Petroleum
Hyperdynamics' CEO Says Asset Value Continues
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."
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.
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.
702-274-5400 (Investor Relations)
Source: Hyperdynamics Corporation
Charts Provided Courtesy