Hyperdynamics (HDYNQ) Inactive 10-Q7 Feb 142014 Q2 Quarterly reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
Document and Entity Information	Dec. 31, 2013	Feb. 03, 2014
Document and Entity Information	'	'
Entity Registrant Name	'HYPERDYNAMICS CORP	'
Entity Central Index Key	'0000937136	'
Document Type	'10-Q	'
Document Period End Date	31-Dec-13	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--06-30	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Accelerated Filer	'
Entity Common Stock, Shares Outstanding	'	21,046,591
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q2	'

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2013	Jun. 30, 2013
In Thousands, unless otherwise specified	Dec. 31, 2013	Jun. 30, 2013
Current assets:	'	'
Cash and cash equivalents	$18,017	$26,468
Available-for-sale securities	15,207	15,383
Accounts receivable - joint interest	711	754
Prepaid expenses	277	637
Other current assets	'	37
Total current assets	34,212	43,279
Property and equipment, net of accumulated depreciation of $1,683 and $1,462	596	710
Oil and gas properties, using full-cost accounting:	'	'
Proved properties	116,753	116,753
Unevaluated properties excluded from amortization	20,903	21,174
Total oil and gas properties	137,656	137,927
Less- Accumulated depreciation, depletion and amortization	-116,753	-116,753
Oil and gas properties, using full-cost accounting	20,903	21,174
Other Assets:	'	'
Restricted cash	19,195	19,190
Deposits	15	15
Total assets	74,921	84,368
LIABILITIES AND SHAREHOLDERS' EQUITY	'	'
Current liabilities - accounts payable and accrued expenses	25,522	22,602
Other non-current liabilities	68	92
Total liabilities	25,590	22,694
Commitments and contingencies (Note 7)	'	'
Shareholders' equity:	'	'
Preferred stock, $0.001 par value; 20,000,000 authorized, 0 shares issued and outstanding	'	'
Common stock, $0.001 par value, 43,750,000 shares authorized; 21,046,591 and 21,046,591 shares issued and outstanding, respectively	169	169
Additional paid-in capital	316,674	316,235
Accumulated other comprehensive loss	-69	-94
Accumulated deficit	-267,443	-254,636
Total shareholders' equity	49,331	61,674
Total liabilities and shareholders' equity	$74,921	$84,368

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2013	Jun. 30, 2013
In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Jun. 30, 2013
CONDENSED CONSOLIDATED BALANCE SHEETS	'	'
Property and equipment, accumulated depreciation (in dollars)	$1,683	$1,462
Preferred stock, par value (in dollars per share)	$0.00	$0.00
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$0.00	$0.00
Common stock, shares authorized	43,750,000	43,750,000
Common stock, shares issued	21,046,591	21,046,591
Common stock, shares outstanding	21,046,591	21,046,591

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Costs and expenses:	'	'	'	'
Depreciation	$111	$176	$221	$359
General, administrative and other operating	8,262	4,890	12,630	10,460
Full amortization of proved oil and gas properties	'	'	'	441
Loss from operations	-8,373	-5,066	-12,851	-11,260
Interest income	20	2	44	6
Loss before income tax	-8,353	-5,064	-12,807	-11,254
Net loss	($8,353)	($5,064)	($12,807)	($11,254)
Basic and diluted loss per share (in dollars per share)	($0.40)	($0.24)	($0.61)	($0.54)
Weighted average shares outstanding - basic and diluted (in shares)	21,046,591	20,958,466	21,046,591	20,941,680

CONDENSED_CONSOLIDATED_STATEME1

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)	'	'	'	'
Net loss	($8,353)	($5,064)	($12,807)	($11,254)
Other comprehensive income (loss):	'	'	'	'
Unrealized loss on available-for-sale securities	8	'	25	'
Other comprehensive income	8	'	25	'
Comprehensive loss	($8,345)	($5,064)	($12,782)	($11,254)

CONDENSED_CONSOLIDATED_STATEME2

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
Balance at Jun. 30, 2012	$76,067	$167	$312,075	($236,175)	'
Balance (in shares) at Jun. 30, 2012	'	20,867,216	'	'	'
Increase (Decrease) in Shareholders' Equity	'	'	'	'	'
Net loss	-18,461	'	'	-18,461	'
Unrealized loss on available-for-sale securities	-94	'	'	'	-94
Common stock issued for:	'	'	'	'	'
Severance	365	1	364	'	'
Severance (in shares)	'	84,375	'	'	'
Exercise of options	372	1	371	'	'
Exercise of options (in shares)	'	95,000	'	'	'
Amortization of fair value of stock options	3,425	'	3,425	'	'
Balance at Jun. 30, 2013	61,674	169	316,235	-254,636	-94
Balance (in shares) at Jun. 30, 2013	'	21,046,591	'	'	'
Increase (Decrease) in Shareholders' Equity	'	'	'	'	'
Net loss	-12,807	'	'	-12,807	'
Unrealized loss on available-for-sale securities	25	'	'	'	25
Common stock issued for:	'	'	'	'	'
Amortization of fair value of stock options	439	'	439	'	'
Balance at Dec. 31, 2013	$49,331	$169	$316,674	($267,443)	($69)
Balance (in shares) at Dec. 31, 2013	'	21,046,591	'	'	'

CONDENSED_CONSOLIDATED_STATEME3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:	'	'
Net loss	($12,807)	($11,254)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation	221	359
Full amortization of proved oil and gas properties	'	441
Stock based compensation	439	2,109
Amortization of premium on short term investments	201	'
Changes in operating assets and liabilities:	'	'
Decrease in accounts receivable - joint interest	384	1,041
Decrease in Prepaid expenses	358	446
Decrease in Other current assets	40	3,069
Increase (decrease) in Accounts payable and accrued expenses	4,372	-3,166
Decrease in Other liabilities	-24	-12
Net cash used in operating activities	-6,816	-6,967
CASH FLOWS FROM INVESTING ACTIVITIES:	'	'
(Purchase) sale of property and equipment	-112	29
Investment in unevaluated oil and gas properties	-1,523	-2,672
Proceeds from sale of interest in unevaluated oil and gas properties, net of transaction costs of $257	'	26,743
Net cash Provided by (used in) investing activities	-1,635	24,100
CASH FLOWS FROM FINANCING ACTIVITIES:	'	'
Proceeds from exercise of options	'	358
Net cash provided by financing activities	'	358
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	-8,451	17,491
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	26,468	37,148
CASH AND CASH EQUIVALENTS AT END OF PERIOD	18,017	54,639
NON-CASH INVESTING AND FINANCING TRANSACTIONS:	'	'
Accounts payable (receivable) for oil and gas properties	($342)	$3,416

CONDENSED_CONSOLIDATED_STATEME4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2012
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	'
Proceeds from sale of interest in unevaluated oil and gas properties, transaction costs	$257

ORGANIZATION_AND_SIGNIFICANT_A

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Dec. 31, 2013

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Nature of business

Hyperdynamics Corporation (“Hyperdynamics,” the “Company,” “we,” “us,” and “our”) is a Delaware corporation formed in March 1996. Hyperdynamics has three wholly-owned subsidiaries, SCS Corporation Ltd (SCS), a Cayman corporation, HYD Resources Corporation (HYD), a Texas corporation, and Hyperdynamics Oil & Gas Limited, incorporated in the United Kingdom. Through SCS and its wholly-owned subsidiary, SCS Guinea SARL (SCSG), which is a Guinea limited liability company formed under the laws of the Republic of Guinea (“Guinea”) located in Conakry, Guinea, Hyperdynamics focuses on oil and gas exploration offshore the coast of West Africa. Our exploration efforts are pursuant to a Hydrocarbon Production Sharing Contract, as amended (the “PSC”). We refer to the rights granted under the PSC as the “Concession.” SCS began operations in oil and gas exploration, seismic data acquisition, processing, and interpretation in late fiscal 2002.

Status of our Business

We have no source of operating revenue and there is no assurance when we will, if ever. On December 31, 2013, we had $18.0 million in cash, $15.2 million in available-for-sale securities and $19.2 million in restricted cash, which is held in escrow in connection with our drilling contract with AGR Peak Well Management Ltd. (“AGR”). We had $25.6 million in liabilities, which are comprised of current liabilities of $25.5 million, including $20.2 million of liabilities currently pending resolution of our dispute with AGR, and noncurrent liabilities of $0.1 million. We plan to use our existing cash to fund our general corporate needs, our legal and other professional fees and our expenditures associated with the Concession, including our share of future capital expenditures that are not paid by Tullow on our behalf. We have no other material commitments.

On December 31, 2012, our wholly owned subsidiary, SCS, closed a sale to Tullow Guinea Ltd (“Tullow”), a subsidiary of Tullow Oil plc, of a 40% gross interest in the Concession. We now hold a 37% participating interest, with Dana Petroleum, PLC (“Dana”), which is a subsidiary of the Korean National Oil Corporation, holding the remaining 23% interest in the Concession. We refer to Tullow, Dana and us in the Concession as the “Consortium”. The Consortium plans to drill an ultra-deepwater exploration well in the first half of calendar 2014. Tullow has agreed to pay our participating interest share of costs associated with this well up to a gross expenditure cap of $100 million. The Consortium currently estimates the well will cost approximately $115 million, which estimate is subject to change. We will be responsible for our 37% interest share of the cost in excess of the $100 million gross carry.

We have drilled one exploratory well, the Sabu-1 well, which reached the planned total depth of 3,600 meters in February 2012. We determined the well to be non-commercial. As a result, we evaluated the costs associated with the well, moved these costs to proved properties, and fully amortized the costs. See additional discussion in Note 2. As described in Note 7, we have filed suit for monetary damages against AGR, the manager of the Sabu-1 well, following unsuccessful negotiations to address mismanagement that led to significant well cost overruns. Payment of the remaining drilling costs is pending resolution of this dispute. AGR filed a countersuit for additional cost of $9.5 million on a gross basis or $7.3 million based on the 77% interest we then held, which we dispute and have excluded from our cost incurred to date. Resolution of this dispute may result in the recovery of a portion of the costs incurred to date; however, it is possible that the resolution of this dispute may result in additional liability associated with disputed costs as well as additional legal expenses. In addition the court could require a party to pay a portion of the legal fees of the other party.

Since September 2013, we have received subpoenas from the United States Department of Justice (“DOJ”) and the United States Securities and Exchange Commission (“SEC”) requesting that we produce documents relating to our Concession in Guinea. See additional discussion in Note 7. We are unable to predict the outcome or future cost associated with these proceedings and the investigations being conducted by the DOJ and SEC; however, we incurred approximately $3.0 million in legal and other professional fees related to the investigations in the six months ended December 31, 2013, and it is likely that we will incur significant expenses for legal and associated costs in the next several months.

Our costs related to the items referred to above and any additional expenses, or any negative outcomes, could adversely affect our liquidity and financial condition and results of operations. We also will be responsible for our participating interest share of costs in excess of $100 million gross costs associated with the ultra-deepwater exploration well, and such excess well costs could exacerbate our liquidity concerns. Absent cash inflows, we could exhaust our current available liquidity within the next twelve months. The timing and amount of our cash outflows are dependent on a number of factors including: legal and other professional fees related to the FCPA investigations, a negative outcome related to any of our legal proceedings and investigations, well costs exceeding our carry, or if we have unfavorable well results. As a result, absent cash inflows, there is substantial doubt as to whether we will have adequate capital resources to meet our current obligations as they become due and therefore be able to continue as a going concern. Our ability to meet our current obligations as they become due over the next twelve-months, and to be able to continue exploration, will depend on obtaining additional resources through sales of additional interests in the Concession, equity or debt financings, or through other means, although no assurance can be given that any of these actions can be completed.

Principles of consolidation

The accompanying unaudited consolidated financial statements include the accounts of Hyperdynamics and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the SEC, and should be read in conjunction with the audited financial statements and notes thereto contained in our Annual Report filed with the SEC on Form 10-K for the year ended June 30, 2013. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year ended June 30, 2013, as reported in the Form 10-K, have been omitted.

Use of estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses at the balance sheet date and for the period then ended. Actual results could differ from these estimates.

Cash and cash equivalents

Cash equivalents are highly liquid investments with an original maturity of three months or less. We maintain our cash in bank deposit accounts which, at times, exceed the federally insured limits.

Restricted cash

Included in restricted cash at December 31, 2013 is $19.2 million held in escrow which relates to our drilling contract with AGR. Under the terms of the drilling contract, we funded the escrow account for the sole purpose of funding our drilling project as overseen by AGR.

Joint interest receivable and allowance for doubtful accounts

We establish provisions for losses on accounts receivable if we determine that we will not collect all or part of the outstanding balance. Accounts receivable are written down to reflect management’s best estimate or realizability based upon known specific analysis, historical experience, and other currently available evidence of the net collectible amount. There is no allowance for doubtful accounts as of December 31, 2013 or June 30, 2013. At December 31, 2013 and June 30, 2013, all of our accounts receivable balance was related to joint interest billings to Tullow and Dana Petroleum (E&P) Limited (“Dana”), who own 40% and 23% participating interests in the Concession, respectively.

Securities classified as available-for-sale and held to maturity

Management determines the appropriate classification of debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. Marketable equity securities and debt securities not classified as held-to maturity are classified as available-for-sale. Available-for-sale securities are carried at fair value, with unrealized gains and losses, net of tax (if any), reported in other comprehensive income. Realized gains and losses, and declines in value deemed to be other-than-temporary, are included in earnings.

The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in earnings.

Earnings per share

Basic loss per common share has been computed by dividing net loss by the weighted average number of shares of common stock outstanding during each period. In period of earnings, diluted earnings per common share are calculated by dividing net income available to common shareholders by weighted-average common shares outstanding during the period plus weighted-average dilutive potential common shares. Diluted earnings per share calculations assume, as of the beginning of the period, exercise of stock options and warrants using the treasury stock method.

All potential dilutive securities, including potentially dilutive options, warrants and convertible securities, if any, were excluded from the computation of dilutive net loss per common share for the three and six month periods ended December 31, 2013 and 2012, respectively, as their effects are antidilutive due to our net loss for those periods.

Stock options to purchase approximately 1.3 million common shares at an average exercise price of $12.53 and warrants to purchase approximately 0.4 million shares of common stock at an average exercise price of $10.40 were outstanding at December 31, 2013. Using the treasury stock method, had we had net income, approximately 3,000 and 27,000 common shares attributable to our outstanding stock options would have been included in the fully diluted earnings per share for the three and six month period ended December 31, 2013. There would have been no dilution attributable to our outstanding warrants to purchase common shares.

Stock options to purchase approximately 1.3 million common shares at an average exercise price of $15.52 and warrants to purchase approximately 1.7 million shares of common stock at an average exercise price of $23.44 were outstanding at December 31, 2012. Using the treasury stock method, had we had net income, approximately 55,250 and 57,375 common shares attributable to our outstanding stock options would have been included in the fully diluted earnings per share for the three and six-month periods ended December 31, 2012. There would have been no dilution attributable to our outstanding warrants to purchase common shares.

Contingencies

We are subject to legal proceedings, claims and liabilities. We accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred. See Note 7, Commitments and Contingencies, for more information on legal proceedings.

Financial instruments

The accounting standards (ASC 820, “Fair Value Measurements and Disclosures”) regarding fair value of financial instruments and related fair value measurements define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement, and enhance disclosure requirements for fair value measures.

The three levels are defined as follows:

· Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

· Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

· Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying values of cash and cash equivalents, accounts receivable — joint interest and accounts payable approximate fair value. On December 31, 2013 we held investments which were classified as available-for-sale securities and therefore were recorded at their fair value at the reporting date. Available-for-sale securities, which consist entirely of Corporate Debt securities, were valued at the closing price reported in the active market in which the security was traded.

The following table sets forth by level within the fair value hierarchy, our financial assets and liabilities (in thousands) that were accounted for at fair value on a recurring basis as of December 31, 2013:

Carrying

Fair Value Measurement at December 31, 2013

Value at

December 31,

2013

Level 1

Level 2

Level 3

Assets:

Corporate debt securities

15,207

—

Carrying

Fair Value Measurement at June 30, 2013

Value at

June 30, 2013

Level 1

Level 2

Level 3

Assets:

Corporate debt securities

15,383

—

Foreign currency gains and losses from current operations

In accordance with ASC Topic 830, Foreign Currency Matters, the functional currency of our international subsidiaries is the U.S. Dollar. Gains and losses from foreign currency transactions arising from operating assets and liabilities have not been significant and are included in general, administrative and other operating expense. Net foreign currency transaction gains (losses) were $(0.2) million and $(0.5) million for the three and six month periods ended December 31, 2013, as compared to $(0.1) million and $(0.2) million for the three and six month periods ended December 31, 2012 respectively.

Recently issued or adopted accounting pronouncements

In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward exists, which requires that an entity present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. ASU 2013-11 eliminates diversity in practice for presentation of an unrecognized tax benefits when such a carryforward is available to reduce the taxable income or tax payable that would result from the disallowance of a tax position. This accounting guidance will be effective for our first quarter in fiscal 2015. We do not expect ASU 2013-11 to have any impact on our financial position or results of operations.

INVESTMENT_IN_OIL_AND_GAS_PROP

INVESTMENT IN OIL AND GAS PROPERTIES	6 Months Ended
	Dec. 31, 2013
INVESTMENT IN OIL AND GAS PROPERTIES	'
INVESTMENT IN OIL AND GAS PROPERTIES	'
	2. INVESTMENT IN OIL AND GAS PROPERTIES

	Investment in oil and gas properties consists entirely of our Guinea Concession in offshore West Africa. We owned a 77% participating interest in our Guinea Concession prior to the sale of a 40% gross interest to Tullow which closed on December 31, 2012. We now own a 37% interest in the Concession.

	We follow the “full-cost” method of accounting for oil and natural gas property and equipment costs. Under this method, until April 1, 2013 internal costs incurred that were directly identified with exploration, development, and acquisition activities undertaken by us for our own account, and which were not related to production, general corporate overhead, or similar activities, were capitalized. For the three and six month periods ended December 31, 2012, we capitalized $1.2 million and $2.3 million of such costs respectively. Capitalization of internal costs was discontinued April 1, 2013 when Tullow became the operator. Geological and geophysical costs incurred that are directly associated with specific unproved properties are capitalized in “Unproved properties excluded from amortization” and evaluated as part of the total capitalized costs associated with a prospect. The cost of unproved properties not being amortized is assessed to determine whether such properties have been impaired. In determining whether such costs should be impaired, we evaluate current drilling results and available geological and geophysical information. Any impairment assessed to unproved properties is added to the cost of proved properties. The unamortized cost of proved oil and gas properties is limited by the Full-Cost Ceiling Test.

	We exclude capitalized costs of unevaluated oil and gas properties from amortization. Geological and geophysical information pertaining to the Guinea concession was collected and evaluated and no reserves have been attributed to the concession. In February 2012, we completed the drilling of the Sabu-1 well, which was determined to be non-commercial. As a result, we evaluated certain geological and geophysical related costs in unproved properties along with the drilling costs of the Sabu-1 well and moved $116.8 million to proved properties. As we have no proved reserves to include in the Full-Cost Ceiling Test, the entire $116.8 million resulted in the full amortization of our proved oil and gas properties. The net costs associated with properties which remain unevaluated were $20.9 million and $21.2 million as of December 31, 2013 and June 30, 2013, respectively. These costs are excluded from amounts subject to amortization.

	The following table provides detail of total capitalized costs for our Guinea concession as of December 31, 2013 and June 30, 2013 (in thousands):

		December 31,			June 30,
		2013			2013
	Oil and Gas Properties:
	Proved Oil and Gas Properties	$	116,753		$	116,753
	Unproved Oil and Gas Properties	14,094			14,365
	Other Equipment Costs	6,809			6,809
	Total Oil and Gas Properties	137,656			137,927
	Less — Accumulated depreciation, depletion and amortization costs	(116,753		)	(116,753		)
	Unevaluated properties not subject to amortization	$	20,903		$	21,174

	Evaluation activities of these unproved properties are expected to be completed within the next one to three years. As of June 30, 2012, based on our impairment review, we fully amortized $116.3 million of our proved oil and gas properties as a result of the evaluation of our first well drilled. An additional $0.4 million in Sabu-1 well related costs were recognized during the first quarter of fiscal 2013. These costs were capitalized in proved oil and gas properties and fully amortized.

	During the six month period ended December 31, 2013, our oil and gas property balance declined by $0.3 million as a result of a credit received from Tullow as a correction of costs previously billed to us.

	Sale of Interest to Tullow

	On December 31, 2012, our wholly owned subsidiary, SCS, closed a sale to Tullow of a 40% gross interest in the Concession. As consideration, SCS received $27 million from Tullow as reimbursement of past costs of SCS in the Concession and, as additional consideration, Tullow agreed to: (i) pay SCS’s participating interest share of future costs associated with the drilling of an exploration well in at least 2,000 meters of water in the deepwater fan area of the Concession, up to a gross expenditure cap of $100 million; and (ii) pay SCS’s share of costs for an appraisal well of the initial exploration well, if drilled, subject to a gross expenditure cap on the appraisal well of $100 million. Tullow is obligated to pay its 40% participating interest share of costs associated with the Concession as of November 20, 2012, the date of execution of the purchase and sale agreement. Tullow began to pay SCS’s costs attributable to the Concession at the commencement of the next exploration period, September 21, 2013. Tullow will continue to pay SCS’s costs, subject to the gross expenditure cap of $100 million, until 90 days following the date on which the rig contracted to drill the exploration well moves off the well location. We are responsible for our share of any costs exceeding the gross expenditure cap of $100 million on either well. Tullow agreed to use reasonable endeavors to provide for the commencement of drilling of the exploration well not later than April 1, 2014. The $27 million payment was received by us on December 31, 2012 and was recorded as a reduction in unproved oil and gas properties, net of transaction costs of approximately $3.3 million.

	In connection with the transaction, SCS, Tullow and Dana entered into a Joint Operating Agreement Novation and Amendment Agreement reflecting that as a result of the sale to Tullow, the interest of the parties in the Concession are SCS 37%, Dana 23%, and Tullow 40%, and that Tullow will be bound by the PSC and the Joint Operating Agreement previously entered into between SCS and Dana. Tullow will assume all the respective liabilities and obligations of SCS in respect of the assigned 40% interest. SCS and Tullow executed a Deed of Assignment. The Assignment was approved by Guinea’s Ministry of Mines and Geology by issuing an Arrêté on December 27, 2012 which formally authorized our assignment of a participating interest to Tullow. SCS, Dana and Tullow have elected Tullow as the Operator of the Concession beginning April 1, 2013.

ACCOUNTS_PAYABLE_AND_ACCRUED_E

ACCOUNTS PAYABLE AND ACCRUED EXPENSES	6 Months Ended
	Dec. 31, 2013
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	'
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	'
	3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

	Accounts payable and accrued expenses (in thousands) as of December 31, 2013 and June 30, 2013 include the following:

		December 31,		June 30,
		2013		2013
	Accounts payable — oil and gas exploration activities	$	21,262	$	22,208
	Accounts payable — legal costs	2,954		164
	Accrued payroll and bonus	1,289		215
	Accrued — Other	17		15
		$	25,522	$	22,602

INVESTMENTS

INVESTMENTS	6 Months Ended
	Dec. 31, 2013
INVESTMENTS	'
INVESTMENTS	'
	4. INVESTMENTS

	The following is a summary of available-for-sale securities as of December 31, 2013 (in thousands):

		Amortized Cost		Unrealized Losses			Fair Value
							(net)
	US corporate debt securities	$	15,276	$	(69	)	$	15,207
	Total available-for-sale	$	15,276	$	(69	)	$	15,207

	The following is a summary of available-for-sale securities as of June 30, 2013 (in thousands):

		Amortized Cost		Unrealized Losses			Fair Value
							(net)
	US corporate debt securities	$	15,477	$	(94	)	$	15,383
	Total available-for-sale	$	15,477	$	(94	)	$	15,383

	We had no securities classified as held-to-maturity as of December 31, 2013 or June 30, 2013. All $15.2 million in debt securities on hand as of December 31, 2013 will mature during the third quarter of fiscal 2014.

	At each reporting date, the Company performs an evaluation of debt and equity securities to determine if the unrealized losses are other-than-temporary. As of December 31, 2013 or June 30, 2013 no other-than-temporary impairment losses have been recorded with regard to securities.

STOCK_OPTIONS

STOCK OPTIONS	6 Months Ended
STOCK OPTIONS	Dec. 31, 2013
STOCK OPTIONS	'
STOCK OPTIONS	'
	5. STOCK OPTIONS

	On February 18, 2010, at our annual meeting of stockholders, stockholders approved the 2010 Equity Incentive Plan (the “2010 Plan”). Prior to the 2010 stockholder meeting, we had two stock award plans: the Stock and Stock Option Plan, which was adopted in 1997 (“1997 Plan”) and the 2008 Restricted Stock Award Plan (“2008 Plan”). In conjunction with the approval of the 2010 Plan at the annual meeting, the 1997 Plan and the 2008 Plan were terminated as of February 18, 2010. Subsequently, on February 17, 2012, the 2010 Plan was amended to increase the maximum shares issuable under the 2010 Plan.

	The 2010 Plan provides for the grants of shares of common stock, restricted stock units or incentive stock options and/or nonqualified stock options to purchase our common stock to selected employees, directors, officers, agents, consultants, attorneys, vendors and advisors of ours’ or of any parent or subsidiary thereof. Shares of common stock or restricted stock can only be granted under the 2010 Plan within 10 years from the plan effective date of February 18, 2010. A maximum of 1,250,000 shares are issuable under the 2010 Plan and at December 31, 2013, 443,330 shares remained available for issuance.

	The 2010 Plan provides a means to attract and retain the services of participants and also to provide added incentive to such persons by encouraging stock ownership in the Company. Plan grants are administered by the Compensation Committee, which has substantial discretion to determine which persons, amounts, time, price, exercise terms, and restrictions, if any.

	Additionally, from time to time, we issue non-compensatory warrants, such as warrants issued to investors.

	The fair value of non-market based options or warrants are estimated using the Black-Scholes valuation model. For market based options, the fair value was estimated using a Black-Scholes option pricing model with inputs adjusted for the probability of the vesting criteria being met and the median expected term for each grant as determined by utilizing a Monte Carlo simulation. Expected volatility is based solely on historical volatility of our common stock over the period commensurate with the expected term of the stock options. We rely solely on historical volatility as we do not have traded options. The expected term calculation for stock options is based on the simplified method as described in the Securities and Exchange Commission Staff Accounting Bulletin number 107. We use this method because we do not have sufficient historical information on exercise patterns to develop a model for expected term. The risk-free interest rate is based on the U. S. Treasury yield in effect at the time of grant for an instrument with a maturity that is commensurate with the expected term of the stock options. The dividend yield rate of zero is based on the fact that we have never paid cash dividends on our common stock and we do not expect to pay cash dividends on our common stock during the expected term of the options.

	Stock Options

	The following table provides information about options during the six months ended December 31, 2013 and 2012:

			2013			2012
	Number of options granted		3,359			56,080
	Compensation expense recognized		$	439,000		$	2,109,000
	Compensation cost capitalized		—			688,000
	Weighted average fair value of options outstanding		$	8.25		$	10.08

	The following table details the significant assumptions used to compute the fair market values of employee and director stock options granted during the six months ended December 31, 2013 and 2012:

			2013		2012
	Risk-free interest rate		0.08-0.90	%	0.13-0.45	%
	Dividend yield		0	%	0	%
	Volatility factor		74-95	%	98-123	%
	Expected life (years)		0.5-3.25		0.5-3.25

	Summary information regarding employee and director stock options issued and outstanding under all plans as of December 31, 2013 is as follows:

			Options		Weighted			Aggregate		Weighted
					Average			intrinsic value		average
					Exercise Price					remaining
										contractual
										term (years)
	Options outstanding at year ended July 1, 2013		1,361,509		13.12			$	52,277	3.26
	Granted		3,359		4.77
	Exercised		—		—
	Forfeited		(76,043	)	19.22
	Expired		(24,735	)	23.16
	Options outstanding at December 31, 2013		1,264,090		$	12.53		$	129,243	2.55
	Options exercisable at December 31, 2013		833,104		$	16.36		$	34,981	2.46

	Options outstanding and exercisable as of December 31, 2013
	Exercise Price			Outstanding Number of Shares		Remaining Life		Exercisable
	Exercise Price			Outstanding Number of Shares		Remaining Life		Number of Shares
	$	1.92-5.00		306,828		1 year		150,358
	$	1.92-5.00		164,840		4 years		6,250
	$	5.01-10.00		141,099		1 year		137,763
	$	5.01-10.00		162,944		4 years		62,023
	$	5.01-10.00		46,125		7 years		46,125
	$	10.01-20.00		106,375		1 year		106,375
	$	10.01-20.00		32,500		6 years		30,000
	$	20.01-25.00		14,875		1 year		13,208
	$	20.01-25.00		17,875		7 years		17,875
	$	25.01-30.00		52,500		1 year		52,500
	$	25.01-30.00		33,750		7 years		32,500
	$	30.01-35.00		26,939		1 year		26,939
	$	30.01-35.00		38,125		3 years		38,125
	$	30.01-35.00		64,313		8 years		64,313
	$	35.01-40.00		22,502		1 year		16,250
$	35.01-40.00		9,375		3 years		9,375
$	40.01-45.00		11,875		1 year		11,875
$	40.01-45.00		11,250		7 years		11,250
			1,264,090				833,104

At December 31, 2013, there was $1.0 million of unrecognized compensation costs related to non-vested share based compensation arrangements granted to employees and directors under the plans, with an amortization period of two to three years.

INCOME_TAXES

INCOME TAXES	6 Months Ended
INCOME TAXES	Dec. 31, 2013
INCOME TAXES	'
INCOME TAXES	'
	6. INCOME TAXES

	Federal income taxes are not due as we have had losses since inception. Our effective tax rate for the three and six month periods ended December 31, 2013 and 2012 is zero percent. This rate is lower than the U.S. statutory rate of 35 percent primarily due to the valuation allowance applied against our net deferred tax assets.

COMMITMENTS_AND_CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Dec. 31, 2013
COMMITMENTS AND CONTINGENCIES	'
COMMITMENTS AND CONTINGENCIES	'
	7. COMMITMENTS AND CONTINGENCIES

	LITIGATION AND OTHER LEGAL MATTERS

	From time to time, we and our subsidiaries are involved in disputes. We are unable to predict the outcome of such matters when they arise. We review the status of on-going proceedings and other contingent matters with legal counsel. Liabilities for such items are recorded if and when it is probable that a liability has been incurred and when the amount of the liability can be reasonably estimated. If we are able to reasonably estimate a range of possible losses, an estimated range of possible loss is disclosed for such matters in excess of the accrued liability, if any. Liabilities are periodically reviewed for adjustments based on additional information.

	Shareholder Lawsuits

	On April 2, 2012, a lawsuit styled as a class action was filed in the U.S. District Court for the Southern District of Texas against us and our chief executive officer alleging that we made false and misleading statements that artificially inflated our stock prices. The lawsuit alleges, among other things, that we misrepresented the prospects and progress of our drilling operations, including our drilling of the Sabu-1 well and plans to drill the Baraka-1 well off the coast of the Republic of Guinea. The lawsuit seeks damages based on Sections 10(b) and 20 of the Securities Exchange Act of 1934, although the specific amount of damages is not specified. On June 1 and June 4, 2012, a number of parties made application to the Court to be appointed as lead plaintiff, and a lead plaintiff was appointed by the Court. On April 22, 2013, the lead plaintiff appointed by the Court filed a motion to withdraw as lead plaintiff. On June 12, 2013 the Court accepted the withdrawal of the lead plaintiff and appointed a new lead plaintiff to represent the class. On August 13, 2013, the newly appointed lead plaintiff also filed a motion to withdraw as lead plaintiff. On December 5, 2013 the Court appointed another plaintiff as lead plaintiff, and on January 22, 2014 the Court referred the matter to the magistrate judge for a conference regarding the lead plaintiff issue. We have assessed the status of this matter and have concluded that an adverse judgment remains reasonably possible, but not probable. As a result, no provision has been made in the consolidated financial statements. Given the early stage of this dispute, we are unable to estimate a range of possible loss; however, in our opinion, the outcome of this dispute will not have a material effect on our financial condition and results of operations.

	Iroquois Lawsuit

	On May 9, 2012, a lawsuit was filed in the Supreme Court of the State of New York against us and all of our directors. The plaintiffs, five hedge funds that invested in us in early 2012, allege that we breached an agreement with the plaintiffs, and that we and the directors made certain negligent misrepresentations relating to our drilling operations. Among other claims, the plaintiffs allege that we misrepresented the status of our drilling operations and the speed with which the drilling would be completed. The plaintiffs advance claims for breach of contract and negligent misrepresentation and seek damages in the amount of $18.5 million plus pre-judgment interest. On July 12, 2012, we and the directors moved to dismiss the suit for failure to state a claim as to all defendants and for lack of personal jurisdiction over the director defendants. On June 19, 2013, the court dismissed the negligent misrepresentation claim but declined to dismiss the breach of contract claim. The negligent misrepresentation claim was dismissed without prejudice, meaning plaintiffs could attempt to refile it. On August 12, 2013, the plaintiffs filed an amended complaint. That complaint names only us and seeks recovery for alleged breaches of contract. We filed an answer to the plaintiffs’ amended complaint on September 9, 2013, and the court has entered a scheduling order governing pre-trial proceedings in the matter. The maximum possible loss is the full amount of $18.5 million plus interest accrued thereon until judgment. We, however, have assessed the status of this matter and have concluded that although an adverse judgment is reasonably possible, it is not probable. As a result, no provision has been made in the consolidated financial statements. In our opinion, the outcome of this dispute will not have a material effect on our financial condition and results of operations.

	AGR Lawsuit

	On June 21, 2012, our wholly-owned subsidiary, SCS, filed suit against AGR following unsuccessful negotiations to address the cost overruns associated with the Sabu-1 well drilled off the coast of the Republic of Guinea. The suit was filed in London, England in the High Court of Justice, Queen’s Bench Division, Technology and Construction Court. SCS is seeking to recover damages and other relief from AGR for claims of mismanagement of the drilling of the Sabu-1 well and various breaches of contract that resulted in the cost overruns. Among other things, the lawsuit alleges that AGR mismanaged the selection, reconditioning and crew staffing for the Jasper Explorer drilling rig used to drill the Sabu-1 well, mismanaged other subcontractor relationships, failed to seek cost relief from its subcontractors, and failed to return to SCS inventory purchased by SCS but not used in the drilling of Sabu-1 well. On October 1, 2012, AGR filed a defense denying SCS’s allegations and asserting a counterclaim for $22.2 million which AGR alleges to be the outstanding amount owed on the Sabu-1 drilling project, and seeking other unspecified damages and relief, including damages for loss of management time and associated expenses, a full indemnity for a claim brought by Jasper against AGR, and interest on any damages awarded. SCS filed a reply to AGR’s defense on December 3, 2012 and responded by denying AGR’s counterclaim. At a hearing on May 24, 2013, the Court consolidated this matter with a pending matter between Jasper Drilling Private Limited, the owner of the Jasper Explorer drilling rig, and AGR, and established a pretrial schedule contemplating one trial for both matters in June 2014. On December 23, 2013, SCS served an Amended Particulars of Claim and a hearing to consider the Amended Particulars of Claim is set for February 14, 2014.

	As of December 31, 2013 $19.2 million remains in an escrow account established to fund the well drilling project. As described above, our claim against AGR seeks recovery of monies paid out as a result of AGR’s mismanagement of the project. In addition to the amounts paid, to comply with relevant accounting rules, we have accrued an additional $21.5 million of costs on a gross basis for costs AGR claims are associated with the drilling of the Sabu-1 well. We have not paid these funds to AGR and dispute AGR’s entitlement to these funds. Additionally, AGR holds $8.8 million on a gross basis of excess materials acquired during the drilling of the Sabu-1 well. We dispute AGR’s entitlement to these assets. Finally, an additional amount of $9.5 million on a gross basis or $7.3 million based on the 77% interest we then held is sought by AGR. Because of our claim, and because we dispute the validity of these charges, we have not accrued for this amount. We have assessed the status of AGR’s claims and have concluded that although an adverse judgment is reasonably possible, it is not probable. As a result, no provision for the $9.5 million has been made in the consolidated financial statements. In our opinion, the outcome of this dispute will not have a material adverse effect on our financial condition and results of operations.

	Foreign Corrupt Practices Act Investigations

	During September 2013, we received a subpoena from the United States Department of Justice. Subsequently, in January 2014 we received a subpoena from the United States Securities and Exchange Commission. Both subpoenas request that the Company produce documents relating to its business in Guinea. We understand that the DOJ and SEC are investigating whether our activities in obtaining and retaining the Concession rights and our relationships with charitable organizations potentially violate the U.S. Foreign Corrupt Practices Act or U.S. anti-money laundering statutes. We have retained legal counsel to represent us in these matters, initiated an internal investigation, and we are cooperating fully with the government.

	If violations of the FCPA occurred, we could be subject to fines, civil and criminal penalties, equitable remedies, and injunctive relief. We could also face fines, sanctions and other penalties from authorities in other jurisdictions that could affect our ability to conduct business operations in those jurisdictions. In addition, disclosure and the pendency of the investigation could adversely affect our reputation and our ability to obtain new business or retain existing business, to attract and retain employees and to access the capital markets. No amounts have been accrued related to any potential fines, sanctions or other penalties. We cannot currently predict what, if any, actions may be taken by the DOJ, the SEC, the applicable government or other authorities or the effect the actions may have on our results of operations, financial condition, on our financial statements or on our business in Guinea and other jurisdictions. We are unable to predict when the investigations will be completed, what outcome will result or what total costs we will incur in the course of the investigations. We incurred approximately $3.0 million in legal and other professional fees associated with the FCPA investigations in the six month period ended December 31, 2013, and it is likely that we will continue to incur significant expenses in the next several months.

	COMMITMENTS

	Operating Leases

	We lease office space under long-term operating leases with varying terms. Most of the operating leases contain renewal and purchase options. We expect that in the normal course of business, the majority of operating leases will be renewed or replaced by other leases.

	The following is a schedule by years of minimum future rental payments required under operating leases that have initial or remaining noncancellable lease terms in excess of one year as of December 31, 2013:

	Years ending June 30:
	(in thousands)
	2014	$	210
	2015	284
	2016	—
	2017	—
	2018	—
	Total minimum payments required	$	494

	Rent expense included in net loss from operations for the three and six month periods ended December 31, 2013 was $0.1 million and $0.2 million respectively, compared to $0.1 million and $0.2 million for the three and six month periods ended December 31, 2012.

ORGANIZATION_AND_SIGNIFICANT_A1

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Dec. 31, 2013

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

Use of estimates

Cash and cash equivalents

Cash equivalents are highly liquid investments with an original maturity of three months or less. We maintain our cash in bank deposit accounts which, at times, exceed the federally insured limits.

Restricted cash

Joint interest receivable and allowance for doubtful accounts

Securities classified as available-for-sale and held to maturity

The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in earnings.

Earnings per share

Contingencies

Financial instruments

The three levels are defined as follows:

· Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

· Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Carrying

Fair Value Measurement at December 31, 2013

Value at

December 31,

2013

Level 1

Level 2

Level 3

Assets:

Corporate debt securities

15,207

—

Carrying

Fair Value Measurement at June 30, 2013

Value at

June 30, 2013

Level 1

Level 2

Level 3

Assets:

Corporate debt securities

15,383

—

Foreign currency gains and losses from current operations

Recently issued or adopted accounting pronouncements

ORGANIZATION_AND_SIGNIFICANT_A2

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Dec. 31, 2013

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Schedule of fair value of financial assets and liabilities by level on a recurring basis

Carrying

Fair Value Measurement at December 31, 2013

Value at

December 31,

2013

Level 1

Level 2

Level 3

Assets:

Corporate debt securities

15,207

—

Carrying

Fair Value Measurement at June 30, 2013

Value at

June 30, 2013

Level 1

Level 2

Level 3

Assets:

Corporate debt securities

15,383

—

INVESTMENT_IN_OIL_AND_GAS_PROP1

INVESTMENT IN OIL AND GAS PROPERTIES (Tables) (Guinea concession)	6 Months Ended
	Dec. 31, 2013
Guinea concession	'
Investments in oil and gas properties	'
Schedule of total capitalized costs of oil and gas properties	'
	The following table provides detail of total capitalized costs for our Guinea concession as of December 31, 2013 and June 30, 2013 (in thousands):

		December 31,			June 30,
		2013			2013
	Oil and Gas Properties:
	Proved Oil and Gas Properties	$	116,753		$	116,753
	Unproved Oil and Gas Properties	14,094			14,365
	Other Equipment Costs	6,809			6,809
	Total Oil and Gas Properties	137,656			137,927
	Less — Accumulated depreciation, depletion and amortization costs	(116,753		)	(116,753		)
	Unevaluated properties not subject to amortization	$	20,903		$	21,174

ACCOUNTS_PAYABLE_AND_ACCRUED_E1

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)	6 Months Ended
	Dec. 31, 2013
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	'
Summary of accounts payable and accrued expenses	'
	Accounts payable and accrued expenses (in thousands) as of December 31, 2013 and June 30, 2013 include the following:

		December 31,		June 30,
		2013		2013
	Accounts payable — oil and gas exploration activities	$	21,262	$	22,208
	Accounts payable — legal costs	2,954		164
	Accrued payroll and bonus	1,289		215
	Accrued — Other	17		15
		$	25,522	$	22,602

INVESTMENTS_Tables

INVESTMENTS (Tables)	6 Months Ended
	Dec. 31, 2013
INVESTMENTS	'
Summary of available-for-sale securities	'
	The following is a summary of available-for-sale securities as of December 31, 2013 (in thousands):

		Amortized Cost		Unrealized Losses			Fair Value
							(net)
	US corporate debt securities	$	15,276	$	(69	)	$	15,207
	Total available-for-sale	$	15,276	$	(69	)	$	15,207

	The following is a summary of available-for-sale securities as of June 30, 2013 (in thousands):

		Amortized Cost		Unrealized Losses			Fair Value
							(net)
	US corporate debt securities	$	15,477	$	(94	)	$	15,383
	Total available-for-sale	$	15,477	$	(94	)	$	15,383

STOCK_OPTIONS_Tables

STOCK OPTIONS (Tables)	6 Months Ended
STOCK OPTIONS (Tables)	Dec. 31, 2013
STOCK OPTIONS	'
Schedule of information about options	'


			2013			2012
	Number of options granted		3,359			56,080
	Compensation expense recognized		$	439,000		$	2,109,000
	Compensation cost capitalized		—			688,000
	Weighted average fair value of options outstanding		$	8.25		$	10.08
Schedule of significant assumptions used to compute the fair market values of employee and director stock options granted	'


			2013		2012
	Risk-free interest rate		0.08-0.90	%	0.13-0.45	%
	Dividend yield		0	%	0	%
	Volatility factor		74-95	%	98-123	%
	Expected life (years)		0.5-3.25		0.5-3.25
Summary of employee and director stock options issued and outstanding	'


			Options		Weighted			Aggregate		Weighted
					Average			intrinsic value		average
					Exercise Price					remaining
										contractual
										term (years)
	Options outstanding at year ended July 1, 2013		1,361,509		13.12			$	52,277	3.26
	Granted		3,359		4.77
	Exercised		—		—
	Forfeited		(76,043	)	19.22
	Expired		(24,735	)	23.16
	Options outstanding at December 31, 2013		1,264,090		$	12.53		$	129,243	2.55
	Options exercisable at December 31, 2013		833,104		$	16.36		$	34,981	2.46
Schedule of stock options outstanding and exercisable	'
	Options outstanding and exercisable as of December 31, 2013
	Exercise Price			Outstanding Number of Shares		Remaining Life		Exercisable
	Exercise Price			Outstanding Number of Shares		Remaining Life		Number of Shares
	$	1.92-5.00		306,828		1 year		150,358
	$	1.92-5.00		164,840		4 years		6,250
	$	5.01-10.00		141,099		1 year		137,763
	$	5.01-10.00		162,944		4 years		62,023
	$	5.01-10.00		46,125		7 years		46,125
	$	10.01-20.00		106,375		1 year		106,375
	$	10.01-20.00		32,500		6 years		30,000
	$	20.01-25.00		14,875		1 year		13,208
	$	20.01-25.00		17,875		7 years		17,875
	$	25.01-30.00		52,500		1 year		52,500
	$	25.01-30.00		33,750		7 years		32,500
	$	30.01-35.00		26,939		1 year		26,939
	$	30.01-35.00		38,125		3 years		38,125
	$	30.01-35.00		64,313		8 years		64,313
	$	35.01-40.00		22,502		1 year		16,250
	$	35.01-40.00		9,375		3 years		9,375
	$	40.01-45.00		11,875		1 year		11,875
	$	40.01-45.00		11,250		7 years		11,250
				1,264,090				833,104

COMMITMENTS_AND_CONTINGENCIES_

COMMITMENTS AND CONTINGENCIES (Tables)	6 Months Ended
	Dec. 31, 2013
COMMITMENTS AND CONTINGENCIES	'
Schedule by years of minimum future rental payments required under operating leases that have initial or remaining noncancellable lease terms in excess of one year	'


	Years ending June 30:
	(in thousands)
	2014	$	210
	2015	284
	2016	—
	2017	—
	2018	—
	Total minimum payments required	$	494

ORGANIZATION_AND_SIGNIFICANT_A3

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)

0 Months Ended

3 Months Ended

6 Months Ended

1 Months Ended

6 Months Ended

0 Months Ended

6 Months Ended

1 Months Ended

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Jun. 30, 2013

Jun. 30, 2012

Dec. 31, 2013

Jun. 30, 2013

Dec. 31, 2012

Dec. 31, 2013

Oct. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Jun. 30, 2013

Dec. 31, 2013

Dec. 30, 2012

Dec. 31, 2013

Feb. 29, 2012

item

Stock options

AGR Lawsuit

Foreign Corrupt Practices Act Investigations

AGR Peak Well Management Ltd

SCS

Dana

Tullow Guinea Ltd

Guinea concession

Sabu-1 well

AGR Lawsuit

Dana

item

Nature of business

Number of wholly-owned subsidiaries

Status of our Business

Other commitments

Cash

54,639,000

18,017,000

54,639,000

18,017,000

54,639,000

26,468,000

37,148,000

Available-for-sale securities

15,207,000

15,383,000

Restricted cash held in escrow in connection with our drilling contract with AGR

19,195,000

19,190,000

Liabilities

25,590,000

22,694,000

Current liabilities

20,200,000

Noncurrent liabilities

68,000

92,000

Ownership interest sold (as a percent)

40.00%

Threshold gross expenditure cap for well to be paid by the entity

100,000,000

Estimated total cost of well

115,000,000

Ownership interest (as a percent)

23.00%

40.00%

37.00%

77.00%

23.00%

Number of exploratory wells drilled

Planned total depth of drilled well reached

3,600

Additional amount sought on a gross basis

9,500,000

Additional amount sought based ownership interest held

7,300,000

Legal and other professional fees

3,000,000

Gross expenditure for an ultra-deepwater exploration well to be paid by Tullow as additional consideration

100,000,000

Allowance for doubtful accounts

Peiod in which current obligation overdue

'12 months

Earnings per share

Common shares that can be purchased upon exercise of options

1,264,090

1,361,509

1,300,000

Average exercise price of common stock (in dollars per share)

$12.53

$13.12

$15.52

Warrants that can be purchased (in shares)

1,700,000

400,000

1,700,000

400,000

1,700,000

Average exercise price of warrants (in dollars per share)

$23.44

$10.40

$23.44

$10.40

$23.44

Common shares that can be purchased using the treasury stock method, had there been net income

3,000

55,250

27,000

57,375

Common shares that can be purchased using the treasury stock method, had there been net income

ORGANIZATION_AND_SIGNIFICANT_A4

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Jun. 30, 2013
Assets:	'	'	'	'	'
Available-for-sale securities	$15,207,000	$0	$15,207,000	$0	$15,383,000
Foreign currency gains and losses from current operations	'	'	'	'	'
Net foreign currency transaction gains (losses)	-200,000	-100,000	-500,000	-200,000	'
Corporate debt securities	'	'	'	'	'
Assets:	'	'	'	'	'
Available-for-sale securities	15,207,000	'	15,207,000	'	15,383,000
Fair value on a recurring basis \| Carrying Value \| Corporate debt securities	'	'	'	'	'
Assets:	'	'	'	'	'
Available-for-sale securities	15,207,000	'	15,207,000	'	15,383,000
Fair value on a recurring basis \| Level 1 \| Corporate debt securities	'	'	'	'	'
Assets:	'	'	'	'	'
Available-for-sale securities	$15,207,000	'	$15,207,000	'	$15,383,000

INVESTMENT_IN_OIL_AND_GAS_PROP2

INVESTMENT IN OIL AND GAS PROPERTIES (Details) (USD $)

0 Months Ended

3 Months Ended

6 Months Ended

0 Months Ended

1 Months Ended

3 Months Ended

6 Months Ended

12 Months Ended

6 Months Ended

Dec. 31, 2012

Sep. 30, 2012

Dec. 31, 2012

Dec. 31, 2013

Jun. 30, 2013

Dec. 31, 2013

Nov. 20, 2012

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Jun. 30, 2012

Jun. 30, 2013

Dec. 30, 2012

Dec. 31, 2013

Dana

Tullow Guinea Ltd

SCS

Minimum

Guinea concession

Tullow Guinea Ltd

SCS

bbl

Dana

Minimum

Maximum

Tullow Guinea Ltd

Investments in oil and gas properties

Ownership interest in Guinea Concession (as a percent)

23.00%

40.00%

37.00%

77.00%

23.00%

Capitalized costs

$1,200,000

$2,300,000

Reserves

Oil and Gas Properties:

Proved Oil and Gas Properties

116,753,000

Unproved Oil and Gas Properties

14,094,000

14,365,000

Other Equipment Costs

6,809,000

Total oil and gas properties

137,656,000

137,927,000

137,656,000

137,927,000

Less- Accumulated depreciation, depletion and amortization

-116,753,000

Unevaluated properties excluded from amortization

20,903,000

21,174,000

20,903,000

21,174,000

Period over which evaluation activities of unproved properties are expected to be completed

'1 year

'3 years

Full amortization of proved oil and gas properties

400,000

441,000

116,300,000

Decrease in property balance resulting from capitalized cost adjustment

300,000

Ownership interest sold (as a percent)

40.00%

Consideration of sale of interest in PSC

27,000,000

Depth of exploration well to be drilled

2,000

Gross expenditure for an ultra-deepwater exploration well to be paid by Tullow as additional consideration

100,000,000

Gross expenditure for an appraisal well to be paid by Tullow as additional consideration

100,000,000

Percentage of participating interest share of costs associated with the concession obligated to be paid

40.00%

Period through which additional consideration is to be paid by Tullow

'90 days

Threshold gross expenditure cap for well to be paid by the entity

100,000,000

Transaction costs

$257,000

$3,300,000

ACCOUNTS_PAYABLE_AND_ACCRUED_E2

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) (USD $)	Dec. 31, 2013	Jun. 30, 2013
In Thousands, unless otherwise specified	Dec. 31, 2013	Jun. 30, 2013
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	'	'
Accounts payable - oil and gas exploration activities	$21,262	$22,208
Accounts payable - legal costs	2,954	164
Accrued payroll and bonus	1,289	215
Accrued - Other	17	15
Accounts payable and accrued expenses	$25,522	$22,602

INVESTMENTS_Details

INVESTMENTS (Details) (USD $)	6 Months Ended	12 Months Ended
INVESTMENTS (Details) (USD $)	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012
Available-for-sale securities	'	'	'
Amortized Cost	$15,276,000	$15,477,000	'
Unrealized Losses	-69,000	-94,000	'
Fair Value (net)	15,207,000	15,383,000	0
Held-to-maturity securities, fair value	0	0	'
Amount of debt securities on hand maturing	15,200,000	'	'
Other-than-temporary impairment losses recorded	0	0	'
US corporate debt securities	'	'	'
Available-for-sale securities	'	'	'
Amortized Cost	15,276,000	15,477,000	'
Unrealized Losses	-69,000	-94,000	'
Fair Value (net)	$15,207,000	$15,383,000	'

STOCK_OPTIONS_Details

STOCK OPTIONS (Details) (USD $)

Feb. 18, 2010

Dec. 31, 2013

Dec. 31, 2012

Jun. 30, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Feb. 18, 2010

Dec. 31, 2013

item

Stock options

2010 Plan

Minimum

Maximum

Exercise price range $1.92 - $5.00

Exercise price range $5.01 - $10.00

Exercise price range $10.01 - $20.00

Exercise price range $20.01 - $25.00

Exercise price range $25.01 - $30.00

Exercise price range $30.01 - $35.00

Exercise price range $35.01 - $40.00

Exercise price range $40.01 - $45.00

Stock options

Remaining Life, 1 year

Remaining life, 4 year

Remaining Life, 1 year

Remaining life, 7 years

Remaining life, 4 year

Remaining Life, 1 year

Remaining life, 6 years

Remaining Life, 1 year

Remaining life, 7 years

Remaining Life, 1 year

Remaining life, 7 years

Remaining Life, 1 year

Remaining life, 8 year

Remaining life, 3 years

Remaining Life, 1 year

Remaining life, 3 years

Remaining Life, 1 year

Remaining life, 7 years

Stock options and warrants

Number of stock award plans prior to the adoption of 2010 plan

Period within which shares of common stock, options or restricted stock can be granted under the 2010 plan

'10 years

Number of shares issuable under the plan

1,250,000

Number of shares remaining available for issuance

443,330

Options granted to employees and directors

Number of options granted (in shares)

3,359

56,080

Compensation expense recognized

$439,000

$2,109,000

Compensation cost capitalized

688,000

Weighted average fair value of options outstanding (in dollars per share)

$8.25

$10.08

Significant assumptions used to compute the fair market values

Risk-free interest rate, low end of range (as a percent)

0.08%

0.13%

Risk-free interest rate, high end of range (as a percent)

0.90%

0.45%

Dividend yield (as a percent)

0.00%

Volatility factor, low end of range (as a percent)

74.00%

98.00%

Volatility factor, high end of range (as a percent)

95.00%

123.00%

Expected life

'6 months

'3 years 3 months

Options

Outstanding at the beginning of the period (in shares)

1,361,509

Granted (in shares)

3,359

56,080

Forfeited (in shares)

-76,043

Expired (in shares)

-24,735

Outstanding at the end of the period (in shares)

1,264,090

1,300,000

1,361,509

Options exercisable at end of period (in shares)

833,104

Weighted Average Exercise Price

Outstanding at the beginning of the period (in dollars per share)

$13.12

Granted (in dollars per share)

$4.77

Forfeited (in dollars per share)

$19.22

Expired (in dollars per share)

$23.16

Outstanding at the end of the period (in dollars per share)

$12.53

$15.52

$13.12

Options exercisable at end of period (in dollars per share)

$16.36

Aggregate intrinsic value

Outstanding at the end of the period

129,243

52,277

Options exercisable at period end

34,981

Weighted average remaining contractual term (years)

Outstanding at the end of the period

'2 years 6 months 18 days

'3 years 3 months 4 days

Options exercisable at period end

'2 years 5 months 16 days

Options outstanding and exercisable

Exercise Price, low end of the range (in dollars per share)

$1.92

$5.01

$10.01

$20.01

$25.01

$30.01

$35.01

$40.01

Exercise Price, high end of the range (in dollars per share)

$10

$20

$25

$30

$35

$40

$45

Outstanding number of shares

1,264,090

306,828

164,840

141,099

46,125

162,944

106,375

32,500

14,875

17,875

52,500

33,750

26,939

64,313

38,125

22,502

9,375

11,875

11,250

Remaining life

'1 year

'4 years

'1 year

'7 years

'4 years

'1 year

'6 years

'1 year

'7 years

'1 year

'7 years

'1 year

'8 years

'3 years

'1 year

'3 years

'1 year

'7 years

Exercisable number of shares

833,104

150,358

6,250

137,763

46,125

62,023

106,375

30,000

13,208

17,875

52,500

32,500

26,939

64,313

38,125

16,250

9,375

11,875

11,250

Nonvested Share-based Compensation Arrangements, Additional Disclosure

Unrecognized compensation costs

$1,000,000

Amortization period

'2 years

'3 years

INCOME_TAXES_Details

INCOME TAXES (Details)	3 Months Ended		6 Months Ended
INCOME TAXES (Details)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
INCOME TAXES	'	'	'	'
Effective tax rate (as a percent)	0.00%	0.00%	0.00%	0.00%
Statutory federal rate (as a percent)	'	'	35.00%	'

COMMITMENTS_AND_CONTINGENCIES_1

COMMITMENTS AND CONTINGENCIES (Details) (USD $)

3 Months Ended

6 Months Ended

0 Months Ended

1 Months Ended

6 Months Ended

0 Months Ended

6 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 30, 2012

Dec. 31, 2013

9-May-12

Dec. 31, 2013

Oct. 31, 2012

Dec. 31, 2013

24-May-13

Oct. 02, 2012

Dec. 31, 2013

Guinea concession

Shareholder Lawsuits

Iroquois Lawsuit

AGR Lawsuit

Foreign Corrupt Practices Act Investigations

item

AGR Peak Well Management Ltd

item

LITIGATION AND OTHER LEGAL MATTERS

Provision for possible loss

Number of plaintiffs which filed lawsuit

Damages sought

18,500,000

22,200,000

Maximum possible loss

18,500,000

Number of trials into which legal matters are consolidated

Amount in escrow account established to fund the well drilling project

19,200,000

Additional payable for costs associated with the drilling well

21,500,000

Amount held on a gross basis of excess materials acquired during the drilling

8,800,000

Additional amount sought on a gross basis

9,500,000

Additional amount sought based ownership interest held

7,300,000

Ownership interest in Guinea Concession (as a percent)

37.00%

77.00%

Loss contingency amounts related to potential fines, sanctions or other penalties

Legal and other professional fees

3,000,000

Operating Leases

2014

210,000

2015

284,000

Total minimum payments required

494,000

Rent expense

$100,000

$200,000