Hyperdynamics Files Lawsuit Against Drilling Partners Challenging Post-FCPA Settlement Reticence

Hyperdynamics Corp.

On January 11, Houston-based oil and gas company Hyperdynamics filed suit in the U.S. District Court for the Southern District of Texas against its drilling partners in the company’s Guinean operations.  Hyperdynamics claims that the drilling partners have unjustly delayed performing the work called for by their operating agreement because of uncertainty over whether the government of Guinea would terminate its drilling agreement with Hyperdynamics in light of the FCPA investigation into the company.  That investigation was resolved by a declination letter issued by DOJ in May 2015 and a settlement with the SEC in October 2015.  (See previous FCPA Scorecard coverage of that investigation here and here.)  Hyperdynamics is seeking a ruling that the drilling partners are in violation of the operating agreement and an order forcing them to fulfill their obligations. In a November 2015 SEC filing, Hyperdynamics reported a complete lack of operating revenue and warned that further delays in fulfilling requirements imposed by the government of Guinea could result in a loss of the company’s concession to drill in the country.  This case illustrates the potential business risks posed by an FCPA investigation—even if it is resolved on relatively favorable terms.