Hyperdynamics often mentioned ERHC Energy in its press releases, contrasting its similar assets but vastly different share price at a time when HDY (Amex) was trading at $0.50 - $0.80 as HYPD on the OTC Bulletin Board. Despite its lower share count and broader territory for exploration, it continued to trade well below $1 until it moved to the American Exchamge, where it has usually traded between $2 and $3.
More recently, the company ran into trouble in perfecting its exploration plan, necessitating long and costly new negotiations with Guinea's government accompanied by a sharp fall in the price of its stock to just $0.80.
The announcement this past week seems to resolve those issues and allow the company to move forward, and its share price has also improved to $2.75 as of Friday's close.
The company announced in the March 6 release (see not the first but the second release below) that its CEO has set up a charity based in the United States - and subject to all its laws and reporting regulations concerning charities - called "American Friends of Guinea," which will provide a vehicle for a person identified only as a large shareholder to make a gift of 87,715 shares of HDY that will be used by the foundation to meet needs in that country.
The discreet advisory did not mention any particular recipients of the shareholder's largesse, but CEO Kent Watts said the gifts aim to "have a positive impact on the quality of life in Guinea that coincides directly with the success of our work."
Since the gift to the charity is in the form of stock, its value would only increase if all goes well; it is currently valued at $241,216.25. Meanwhile, HDY - which began and continues to operate in part as a oil seismic-data firm as it develops an exploration side - has already identified a multitude of likely oil-bearing prospects in its millions of acres of the Gulf of Guinea, some with active oil seeps.
A March 16 release said Guinea's leaders had invited Watts to Guineau to film re-negotiations for the Gulf of Guinea rights:
Guinea's Minister of Mines and Geology Invites Hyperdynamics to Guinea; Company Film to Document Process
HOUSTON, Mar 16, 2006 (BUSINESS WIRE) -- Hyperdynamics Corporation (HDY) announced today that earlier this month, Minister Souare, the Minister of the Mines and of the Geology of the Republic of Guinea, invited Hyperdynamics' CEO, Kent Watts to travel to Guinea to continue the process to finalize a new Production Sharing Agreement. The company currently holds 100% rights to the 2002 PSA and is involved in an intense process of working with leaders of the Republic of Guinea to sign a new accord.
Mr. Watts is in Guinea together with the investor relations coordinator, and Famarou Karouma, the Vice-president for Guinea affairs. The primary focus of this trip is to continue the process to complete the new agreement, but secondarily, work is being done to film and document the meetings, interviews and discussions that are being held with all levels of the Guinean government and society. It is planned that the film footage will be used for public relations and for marketing to potential partners and vendors.
Kent Watts stated, "Our friends here in Guinea are friendly and optimistic and they enthusiastically support our work. We have been making excellent progress through a series of meetings with and including his Excellency, President Lansana Conte and Minister Souare and his advisors. We are pleased with our progress and we are optimistic for a positive result."
Amid all the talk of a reverse split of ERHE generated by posters on I-Hub, HDY can offer a perspective on what a stock with a smaller float might offer to investors. HDY is selling now at $2.75 with 43.4 million shares outstanding and a market cap of $119 million. Volume on Friday was 450,000 shares, and it has moved in a range between $0.80 and $3.75 as it struggled to right things with the government of Guinea.
ERHE, by way of contrast, with its key rights already perfected, is selling at $0.89 and has 710+ million shares outstanding, a market cap of $634.8 million, and has never traded higher than $0.987. Some 525 million shares of the stock are said to be under the control of our CEO. A 1:10 reverse split would price ERHE at about $8.90 and give us the same market cap and shareholder concentration.
Some investors, however, warn that talk of a reverse split is unfounded and only came from a suggestion of a single poster whose words were amplified by lengthy discussions of the issue.
Here is the March 6 release about HDY's formation of a charity:
Guinea; Hyperdynamics' Shareholder Commits to Initial Funding
HOUSTON--(BUSINESS WIRE)--March 6, 2006--
It was announced today that Kent Watts, Chief Executive for Houston-based Hyperdynamics Corporation (AMEX:HDY), has chartered a new USA-based organization named "American Friends of Guinea" (AFG). The initial goal of this new, non-profit corporation is to fund Medical Aide and Infrastructure to approved charitable organizations in the Republic of Guinea, West Africa. Mr. Watts has received a commitment from a large shareholder to provide an initial donation of 87,715 shares of Hyperdynamics' common stock. It is expected that AFG operations will be fully established over the next month. Based on the initial donation and ensuing fund raising activity, AFG hopes to have funds available to begin making donations within the next 90 to 120 days.
When asked to comment, Mr. Watts stated, "We were looking to put a structure in place whereby we could have a positive impact on the quality of life in Guinea that coincides directly with the success of our work. While Hyperdynamics is working to drill for oil and gas offshore Guinea, I would personally like to raise and fund substantial donations through AFG for humanitarian purposes. I believe this could be accomplished even before Hyperdynamics makes its first discovery and that the structure now established can develop into a long-term endowment. As discoveries are made and hydrocarbons are produced, I believe there will be many individuals willing to make donations to such a worthy cause. I have had meetings with various leaders
in Guinea's non-profit community including the Fondation d'Aide au Developpement Integre en Afrique (FADIAF). They have asked me to be involved in Guinea with regard to the determination of the best use of the donations we plan to make. I will accept this personal responsibility as Hyperdynamics is able to move forward with its drilling programs." He concluded, "Anyone wishing to make a donation can email me with your intent to do so. A representative of AFG will follow up with you right away. This makes a lot of sense and I believe that we can make a tremendous positive impact to the benefit of our friends in Guinea."
(A Safe Harbor statement was deleted by ERHC On The Move.)
CONTACT: Hyperdynamics Corp.
Chris Watts, 713-353-9400
Kent Watts, 713-353-9400
Jim Stock, 702-274-5400
SOURCE: Hyperdynamics Corporation
(END) Dow Jones Newswires