Mr. Leonard: Hyperdynamics, as you can tell from the name, did not start out as an oil company; it started as a software company. In 2001 it acquired a company called Seismic Computing Systems (SCS) that had not only achieved a physical database but also drilling rights offshore in the Republic of Guinea in Northwest Africa. Over the next few years, the company transformed itself from a software company to an exploration company, with the largest offshore concession in all of West Africa - over 30,000 square miles. Subsequently in 2006, the company negotiated a production-sharing contract with the government of Guinea, and during the next six years, it shot three seismic programs. As long as oil prices were going up, it was possible for the company to continue to raise money to fund its exploration program, and it seemed to be doing fairly well. But when oil prices collapsed in late 2008 and early 2009, the company ran into some difficulties. The board decided to bring in new management with more experience in international offshore oil and gas exploration activities. I came in July of this year as President and CEO, and we have since added several very experienced technical staff members. Exploration in Northwest Africa is very different than it is in established productive basins to the south in West Africa, where there are very well-established rules and infrastructure. Northwest Africa really is a wildcatters place. The breakthrough has been with the ability to explore in very deep water off the Continental Shelf. That's where the discoveries have been made in the last few years, and it's been made by the independents; there's not really been a single major oil company exploring in Northwest Africa. But once the discoveries have been made, the major oil companies are now starting to come in, being in a hotly competitive environment with the Chinese. So it's a very competitive area, and the independents who grabbed the large acreage positions now are in a very good situation. Hyperdynamics has an extremely strong acreage position lodged among several world-class offshore discoveries, the most recent of which is Anadarko's Jubilee discovery offshore Ghana, to the south of our concession. That discovery is believed to hold between 1.3 billion and 1.6 billion barrels of recoverable oil reserves. Based on the technical work we have done to date on our acreage, we believe the Guinea concession has comparable resource potential to Jubilee.
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