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Oil lawsuit filed in Texas court over alleged breach of joint operating agreement

In a lawsuit filed in Texas, a small oil company alleges that its partner drillers in Guinea breached a joint operating agreement on offshore drilling.

Hyperdynamics Corp. filed suit claiming that Dana Petroleum PLC and Tullow PLC used a now-settled foreign corruption investigation under the U.S. Foreign Corrupt Practices Act to delay drilling activities long after the investigation was resolved. The lawsuit claims that the delays are putting in jeopardy the drilling of a well that a contract requires to be completed by September. According to the lawsuit, the small company could lose its concession, which is its sole asset, if the well is not completed on time.

Hyperdynamics claims that the defendants are in breach of the joint operating agreement and is acting in bad faith, because its supposed reason for failing to proceed has no foundation, as the investigation is now settled. Hyperdynamics said that it had provided its partners with new contract assurances from the government of Guinea. Previously, the partners had claimed that they were concerned that the government of Guinea could invalidate the concession.

Hyperdynamics has requested an injunction from the U.S. District Court for the Southern District of Texas, requiring Tullow to begin drilling operations again. Hyperdynamics has also filed an arbitration request seeking “further damages.”

Hyperdynamics resolved the corruption investigation with a $75,000 settlement, which was seen as a victory for the company, but the allegations have continued to cause problems.

Gregory D. Jordan is an Austin Oil and Gas lawyer. To learn more, visit http://www.theaustintriallawyer.com or call 512-419-0684.

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