Hyperdynamics subsidiary SCS, South Atlantic Petroleum (Sapetro) and the Government of the Republic of Guinea have signed a third amendment to the 2006 production sharing contract (PSC). 

The amendment will become effective after it gets approved by decree of the President of the Republic of Guinea.

Under the third amendment, 50% of SCS's participating interest in the Guinea concession will be assigned to Sapetro.

It also provides the right to these two companies to explore oil and gas on a 5,000km² block located offshore from the Republic of Guinea.

"Under the third amendment, 50% of SCS’s participating interest in the Guinea concession will be assigned to Sapetro."

Under the contract, drilling operations must begin on an initial exploratory well before 30 May and additional exploration wells may be drilled within the exploration period at the companies’ discretion.

The amendment also reaffirms clear title of Sapetro and SCS to the concession and timing for a $5m security instrument to be provided by the companies within 30 days from the date of the presidential decree and released at that time when the drilling rig for the Fatala well enters Guinea territorial waters.

The third amendment of the PSC puts multiple liabilities on SCS and Sapetro towards the Government of Guinea.

Earlier, SCS and Sapetro signed a farm-out agreement that sets out terms for both the companies to work on the project.