HOUSTON– SCS Corp. Ltd. and South Atlantic Petroleum (SAPETRO) have closed their farm-out agreement and are now full 50/50 partners in a production-sharing contract (PSC) with the Republic of Guinea, with each responsible for its proportionate share of the project costs.
Under a joint operating agreement, the two companies signed, SCS will be the operator for the PSC.
ThePacific Scirocco, which arrived in Guinean waters on May 21, will proceed as planned, said Ray Leonard, Hyperdynamics’ president and CEO.
“We look forward to testing theFatala prospect in the near future, with the possibility of follow-up wells on additional prospects identified by our geoscientists on the 5,000-sq km [1,931-sq mi] PSC block,” he said.
SCS, a wholly owned subsidiary of Hyperdynamics Corp., has received the preliminary closing payment from SAPETRO to cover half of the past costs incurred by SCS starting last September, when the second amendment to the PSC was signed by SCS. The partners do a final reconciliation of the past costs incurred by SCS during the next 45 days to make any adjustments.
Upon announcing the finalization of the farm-out agreement, Hyperdynamics then revealed it had also closed on gross proceeds of $6.33 million to fund part of its drilling campaigns.
“[T]his was a timely closing, as we have signed final closing documents on the farm-out agreement with our partner SAPETRO. This capital will be used to pay a part of our portion of costs of drilling operations, shared from today 50/50 with SAPETRO,” Leonard said.
The private placement offering was for units of the company's securities each consisting of (i) one share of its common stock and (ii) a warrant to purchase three-quarters of a share of the common stock within two years at an exercise price of $1.825 per whole share. The purchase price was $1.46 per unit. The warrants will have “weighted average” adjustment anti-dilution protection.
Katalyst Securities acted as placement agent for the offering, on a reasonable best efforts basis.