Hyperdynamics Corporation is an independent oil and gas exploration company with large prospects offshore Republic of Guinea in Northwest Africa. We are the currently the operator and hold a 77% interest. Our participant, Dana Petroleum, PLC, which is a subsidiary of the Korean National Oil Corporation, holds the remaining 23% interest in the Concession.

In October 2011, we commenced drilling operations on the Sabu-1 well. In February 2012, the Sabu-1 well reached the planned total depth of 3,600 meters. The well encountered oil shows while drilling the targeted Upper Cretaceous section and our well-log interpretations indicated the presence of residual oil in non-commercial quantities. Subsequent analysis of rock samples from the well has confirmed the presence of hydrocarbons in fluid inclusions in the rock. We believe: (1) the Sabu-1 well was not a commercial success because of the lack of reservoir seal (such as marine shales or reservoir-seal pairs) needed for a commercial accumulation, and (2) that the evidence that hydrocarbon generation has taken place in the basin enhances the prospectivity of our Concession.

We have conducted 2D and 3D surveys of a portion of the Concession. The acquisition phase of the most recent 3D seismic survey covering approximately 4,000 square kilometers in the deeper water portion of the Concession was recently completed by the CGG Veritas Ocean Endeavor. Processing of the most recent 3D data set is in progress. The first preliminary time section results were received in March 2012. Completion of this processing work is expected in early calendar year 2013.

Our strategy is to build shareholder value through exploration and production activities by selling, or through a farm-out, a 40% interest in the Concession to an experienced oil and gas company that would also serve as operator of the project going forward.