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, informed Ecofin Agency.

The LOI, which is non-binding, calls for SAPETRO to take a 20% participating interest in exchange for paying 40% of the costs of the upcoming Fatala well up to a $50m cap of predicted total well costs.  Above that amount, SAPETRO would pay its proportional 20% share, PR Newswire reported.

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.

Hyperdynamics’ President and CEO, Ray Leonard, said: “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.” He added: “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.” he added.