(Ecofin Agency) - Hyperdynamics has announced that it has signed a Letter of Intent (LOI) with South Atlantic Petroleum Limited (SAPETRO) farm-out part of Hyperdynamics’ oil and gas concession offshore Guinea.

Under the LOI, which is non-binding, SAPETRO, a privately held Nigerian oil and gas exploration and production company, will take a 20% participating interest and pay 40% of the costs of the upcoming Fatala well up to a $50 million limit of planned total well costs. In the event that the cost is above that amount, SAPETRO would pay its proportional 20% share. The LOI also involves the two companies working together to sign a definitive documents in 45 days.

SAPETRO’s obligation for financial commitments regarding the concession will be effected immediately but will not be due for payment until final approvals from the government of Guinea has been received, Energy-pedia reports.

“The addition of SAPETRO to the Guinea project team represents a big step forward in sharing project-related costs and risks with reputable industry players who recognize Hyperdynamics’ Guinea concession’s economic attractiveness and geologic prospectivity. SAPETRO’s experience in West Africa, its financial strength and its desire to have an exposure in high-quality, high-reward exploration acreage that will be tested in the near future makes them an ideal partner for us,” Ray Leonard (photo, left), Hyperdynamics’ President and Chief Executive Officer, said.

Anita Fatunji