SUGAR LAND, Texas, June 3, 2010 (GLOBE NEWSWIRE) -- Geoserve Marketing LLC., a private consulting firm led by Michael E. Watts (a former adviser/consultant to and current shareholder in Hyperdynamics Corporation), announced today that they have sent a letter to the Board of Directors of Hyperdynamics (NYSE AMEX:HDY) requesting a financial advisor be retained by the company to explore all options available to increase shareholder value.
In the last six months, Hyperdynamics Corporation has signed an agreement with Dana Petroleum to create a joint venture to develop Hyperdynamics' Guinea concession. Hyperdynamics recently completed a 10,100 km, 2D seismic shoot partially funded by Dana Petroleum and Repsol TPF S.A. They also amended their 2006 Production Sharing Contract and obtained a presidential decree from the Republic of Guinea confirming the contract and its amendments. In addition, Hyperdynamics is expected to shortly announce a contract to shoot 3D seismic in its Guinea concession. The 3D shoot will delineate multiple world-class targets and the company has announced that the first will be drilled in the fourth quarter of 2011. Hyperdynamics' management disclosed in its last shareholder meeting that several of the major oil companies have shown interest in its Guinea project. It was explained that interest was high because the exploration potential could add significant value for even the largest major.
Offshore West Africa, where the Hyperdynamics concession lies, has become a hotbed of exploration activity with numerous discoveries, which is helping to establish the once ignored region as a province that holds world-class promise. Acreage and project values in the region are rising sharply as activity increases as evidenced by Exxon Mobil's attempt to buy into the Jubilee Field off Ghana in West Africa. The field is owned by Anadarko Petroleum, Tullow Oil and Kosmos Energy. It was widely reported that Exxon offered $4.2 billion for the 23 percent interest owned by Kosmos. The Jubilee Field reportedly has an estimated 2 billion barrels in reserves. Additionally, there is a new discovery adjacent to Guinea in the south in Sierra Leone, as well as discoveries to the north.
"We know that there has been significant interest in the Guinea project by several of the majors," said Watts. "Although the company has never disclosed which firms have come forward, the major category is a small class that includes the following firms: Exxon Mobil, Conoco Phillips, Shell, Chevron, BP and Total. It is my understanding that none of the above would consider our project without a billion barrel minimum potential."
Watts continued, "Considering all the facts, it concerns me greatly that the Hyperdynamics stock remains grossly undervalued. It is trading for a mere $100 million market cap! This leads me to the conclusion that with the stock price severely depressed, it's not a question of whether a takeover will be mounted, but rather when and by whom. If the company is in play for a merger or takeover, it's the responsibility of the Board to search out every available avenue to maximize shareholder value."
The following is the letter Watts sent to the Board of Directors of Hyperdynamics:
Gentlemen,
The recent achievements and milestones of the company are remarkable and are to be congratulated and applauded. However, marring these achievements is the very disturbing fact that the stock price has not responded in a positive manner. The unfortunate reality is the stock price has deteriorated badly in the face of some of the strongest operational news the company has ever produced. That fact gives rise to this letter and this request.
My greatest concern is that the Company's Guinea concession is one of the premier oil exploration opportunities in the world and the asset is worth many times the current market capitalization. Therefore, I believe the company is vulnerable to a takeover at prices that would not reflect the true value. I worked for years as a consultant and an advisor to the company concerning acquisitions, financing, and IR/PR and I do not desire to see the shareholders, myself included, shorted on what should be a fabulous success.
Therefore, it is my urgent request that the Board immediately seek out competent investment advisors. These advisors should explore conventional and/or creative ways to unlock the inherent value that has been built over many years for the benefit of all shareholders. I believe that this action is imperative to stay ahead of developments that the current low stock price will undoubtedly spawn.
Yours truly,
Michael E. Watts
Geoserve Marketing
About Geoserve Marketing LLC:
Geoserve Marketing is a strategic consulting and private finance firm led by Michael E. Watts. The Company assists clients in making the big decisions on strategy, operations, organization, mergers & acquisitions. Visit us online at www.geoservemarketing.com.
About Hyperdynamics:
Hyperdynamics is an emerging independent oil and gas exploration and production company that is exploring for oil and gas offshore the Republic of Guinea in West Africa. To find out more, visit our website at www.hyperdynamics.com.