According to a press release dated April 3, 2012, the complaint charges Hyperdynamics and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Hyperdynamics is an independent oil and gas exploration company engaged in the development of prospects offshore the Republic of Guinea (“Guinea”) in West Africa.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. As a result of defendants’ false statements, Hyperdynamics stock traded at artificially inflated prices during the Class Period, reaching a high of $6.35 per share on March 4, 2011.
On November 9, 2011, Hyperdynamics announced disappointing first quarter 2012 financial results and reported that it had increased the cost estimate for its first two exploration wells (the Sabu-1 and Baraka-1 wells) from $80 to $135 million due to an increased investment in its well logging program, infrastructure bottlenecks and operational issues with its drill ship. The Company further announced that there were delays in the progress of its Sabu-1 well and that given the operational challenges with Sabu-1, it might delay its plans for drilling its Baraka-1 well. Then, on February 15, 2012, Hyperdynamics announced extremely disappointing results from its Sabu-1 exploration well, reporting that the Sabu-1 well was unsuccessful, as the Company only encountered non-commercial quantities of oil from its exploration activities. On this news, the price of Hyperdynamics stock fell, closing at $1.44 per share on February 16, 2012, a one-day decline of 29% and a decline of 77% from its Class Period high.
According to the complaint, the true facts, which were known by defendants but concealed from the investing public during the Class Period, were as follows: (a) due to numerous cost overruns and delays, including logistical delays resulting from limited port facilities in Guinea as well as issues related to mechanical and operational matters surrounding the drilling of the Sabu-1 well, the Company would be unable to commence drilling on the Baraka-1 well; (b) the Company had far greater exposure to liquidity concerns than it had previously disclosed; and (c) based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company’s drilling operations or the prospective value of the Company’s oil and gas concessions.
Plaintiff seeks to recover damages on behalf of all purchasers of Hyperdynamics publicly traded securities during the Class Period (the “Class”).
On February 19, 2013, the Court issued an Order appointing lead plaintiff and approving the selection of lead counsel.
The Court dismissed this case on August 25, 2015.