South Atlantic Petroleum (SAPETRO) has signed a letter of intent (LOI) with Hyperdynamics, an oil and gas exploration company, to acquire 20% participating interest in the latter’s oil and gas concession located off the Republic of Guinea.

The non-binding agreement states that SAPETRO will acquire 20% interest in the property by paying 40% of the costs of the upcoming Fatala well up to a limit of $50m.

Further, SAPETRO will pay its proportional 20% share above that amount.

"The LOI states that both the companies will work to sign definitive agreements within 45 days unless it gets extended by mutual consensus."

The LOI states that both the companies will work to sign definitive agreements within 45 days unless it gets extended by mutual consensus.

The financial commitments of SAPETRO started with the signing of LOI but it will not be due for payment until the Government of Guinea approves the deal.

Hyderdynamics 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 recognise Hyperdynamics' Guinea concession's economic attractiveness and geologic prospectivity.

“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."

SAPETRO is a Nigerian oil and gas company managed privately and holds a portfolio of assets in Nigeria and in the Mozambique Channel.

Hyperdynamics currently concentrates in exploring for oil and gas at offshore region at Republic of Guinea in West Africa.