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Dana Petroleum (DNX.LN), said Monday that it has signed an exclusive letter of intent or LOI with the Texas based company Hyperdynamics Corporation (HDY), to acquire a 23% working interest in the Hyperdynamics concession offshore the Republic of Guinea, West Africa.

MAIN FACTS:

-The concession encompasses all of offshore Guinea, a total area of 80,000 square kilometres equivalent to 330 U.K. blocks.

-The LOI contemplates Dana and Hyperdynamics signing definitive binding documents no later than Dec. 31, .

-During this period, Hyperdynamics is bound to deal exclusively with Dana with respect to this 23% interest.

-Hyperdynamics intends to bring in to the concession a further significant partner with strong financial and technical capability.

-Dana has the option to negotiate for an additional interest of up to a further 27% (to give Dana a total of 50% interest) if Hyperdynamics does not sign a letter of intent with such a company by Nov. 30.

-Hyperdynamics has recently signed a Memorandum of Understanding with the government of Guinea which confirms Hyperdynamics' title to the Production Sharing Contract or PSC.

-It requires relinquishment of 64% of the current acreage by end 2009 and review of the existing PSC by end March 2010.

-Hyperdynamics has already acquired significant coverage of 2D seismic data in the acreage and will embark on a new 2D survey before the end of this month with an estimated cost of $10 million.

-The seismic dataset will be used to evaluate which parts of the concession to relinquish as mutually agreed by Dana and Hyperdynamics.

-Following the relinquishment, the acreage will still cover the equivalent of 119 U.K. blocks. Subject to agreeing the definitive binding documents by Dec. 31, 2009, Dana will pay Hyperdynamics $5 million (to be applied to the seismic acquisition cost).

-Dana will pay Hyperdynamics a further $15 million, in either cash or shares (at Dana's election), on signature of the revised PSC.

 
-By London Bureau, Dow Jones Newswires; Contact Ian Walker; +44 (0)20 7842 9296; ian.walker@dowjones.com