UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[X]  Annual  Report  Pursuant  To Section 13 Or 15(D) Of The Securities Exchange
     Act Of 1934; For The Fiscal Year Ended:  June 30, 2003

                                       or

[ ]  Transition  Report  Pursuant To Section 13 Or 15(D) Of The Exchange Act
     of  1934

                        Commission File Number: 000-25496

                            HYPERDYNAMICS CORPORATION
             (Exact name of registrant as specified in its charter)

                 Delaware                            87-0400335
       (State or other  jurisdiction                (IRS  Employer
     of incorporation or organization)           Identification  No.)

                           9700 Bissonnet, Suite 1700
                              Houston, Texas 77036
          (Address of principal executive offices, including zip code)

                                 (713) 353-9400
              (Registrant's telephone number, including area code)


Securities registered under Section 12(b) of the Exchange Act:

                                              Name of Each Exchange
     Title  of  Each  Class                    on which Registered
     ----------------------                    -------------------
              N/A                                      N/A

Securities registered pursuant to 12(g) of the Exchange Act:

                               Title of Each Class
                          Common Stock, $.001 par value

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or  for  such  shorter  period  that  the  registrant was required to file such
reports),  and  (2) has been subject to such filing requirements for the past 90
days.  Yes  [X]  No  [  ]

Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-KSB or any amendment to
this  Form  10-KSB.  [  ]

Issuer's  revenues for the year ended June 30, 2003 were $468,022. The aggregate
market value of Common Stock held by non-affiliates of the registrant at October
03,  2003  based  upon  the  last  reported  sales  prices on the OTCBB of $1.73
was  $40,499,269. As of October 03, 2003, there were 27,652,423 Shares of Common
Stock  outstanding.

                                        1
<PAGE>
<TABLE>
<CAPTION>
TABLE  OF  CONTENTS

Part  I

<S>                                                                                    <C>
     Item 1     Business                                                                3

     Item 2     Properties                                                              7

     Item 3     Legal Proceedings                                                       7

     Item 4     Submission of Matters to a Vote of Security Holders                     8

Part II

     Item 5     Market for Registrant's Common Equity and Related Stockholder Matters   8

     Item 6     Management's Discussion and Analysis of Financial Condition and
                Results of Operations                                                  11

     Item 7     Financial Statements                                                   14

     Item 8     Changes in and Disagreements With Accountants in Accounting and
                Financial Disclosure                                                   14

     Item 8(A)  Controls and Procedures                                                15

Part III

     Item 9     Directors, Executive Officers, Promoters and Control Persons;
                Compliance with Section 16(a) of The Exchange Act                      15

     Item 10    Executive Compensation                                                 16

     Item 11    Security Ownership of Certain Beneficial Owners and Management         19

     Item 12    Certain Relationships and Related Transactions                         21

     Item 13    Exhibits and Reports on Form 8-K                                       22
</TABLE>


                                        2
<PAGE>
PART  I

ITEM  1     Business

Oil  and  Gas  Exploration  and  Developing  Seismic  Data  Management  Services

Last  year  we  began  the  process  of  shifting  our focus from the Integrated
Technology  Service  Provider  (ITSP) business model to the provision of seismic
data management services.  During the year ended June 30, 2003 we have exerted a
great  deal of effort to complete this shift of focus; we have accomplished much
and we still have much to do. Although this is a major vertical focus shift, all
of  our integrated technology capabilities are being utilized now for supporting
our  seismic  data  management services that we have named our NuData Management
System  (NuData).  In  addition  to  continuing  to  develop NuData services, we
accomplished  a  major transaction during the year that provided the opportunity
for us to get involved in the actual exploration and exploitation of oil and gas
offshore  the  Republic  of  Guinea  (Guinea),  in  West  Africa  with  a  major
concession.

In  the  beginning  of  fiscal  year  2003,  the  company's primary focus was on
procuring  seismic  data  management  contracts,  developing  its  SCS  NuData
Management system, and lining up and obtaining more library conversion contracts
to  move the oil industry's seismic data tapes off of tape and on to DVD. As the
year  progressed  and our core contract in Trinidad slowed unexpectedly, work on
our  new  concession progressed substantially. As a natural decision, we shifted
our  primary focus to developing our oil and gas exploration opportunities while
secondarily  continuing  to  develop  our  tape  conversion  and data management
capabilities.  Developing  our  seismic  data  management services symbiotically
helps  meet  our requirements regarding managing seismic data and processing and
further  analyzing  the  data acquired pursuant to our exploration work programs
for  the  Guinea  concession.  While  we  are  building our assets for potential
drilling  sites,  we  are  continuing  to fine tune and perfect our seismic data
management  services  for  both  our  internal  use  and  other  exploration and
production  companies.

Other  than  our  primary and prioritized oil and gas exploration operations, we
continue to diversify to a more clear-cut vertical focus in the arena of seismic
data  management  within  the  oil and gas exploration industry. As a result, we
added growing and developing oil and gas industry based service revenues through
December  of  2002.  NuData operations slowed during the second half of the year
while  we  focused  heavily on new results regarding our exploration activities.

New  Farmout  of  Revenue  and  Production and Sharing Agreement for Exploration
Territory  Offshore  The  Republic  of  Guinea

We  received  a  100%  Farmout  Agreement in December 2002, covering most of the
offshore  of the Republic of Guinea, in West Africa. Our top priority is to move
forward  with our work to pinpoint drilling prospects on this huge concession of
approximately  16,000,000  acres.

During  the year, we performed extensive additional analysis on existing seismic
data  acquired  in  years past as well as processing, reprocessing and analyzing
the  1,000  kilometers  of  2D  data  acquired  in  the  spring of 2002. Several
significant  direct  hydrocarbon  indicators  have  been  revealed and announced
publicly  over  the  last  few  months  as  a  result.  Evidence is growing that
commercially  viable  hydrocarbons exist within the concession and, as a result,
our primary focus is to perform the work associated with the initial exploration
phase  of  the  December  2002  Production  and  Sharing  Agreement.

As of October 7, 2003 we have contracted with American International Exploration
Group,  Inc.  to  acquire an additional 4,000 kilometers of 2D seismic data. The
acquisition  vessel  is  currently  acquiring this new data pursuant to our work
requirements  under  the  December  2002  Farmout  Agreement.  This  new  data
acquisition  is  expected to be complete in November 2003 and the processing and
further  analysis  of  the  data  will be ongoing for the next couple of months.
Results  from  analyzing  the  new data are expected to narrow the focus towards
pinpointing viable drilling prospects. The next step will be to shoot 3D seismic
coverage  in  early  2004.  At  that  time,  we  will


                                        3
<PAGE>
decide  how  to  structure  working  interest  offerings  and how to market such
opportunities  to  viable  oil  companies.

Previous  history  as  ITSP  business  model  re-prioritized and remains on hold

The necessity to diversify to the oil and gas industry began when we experienced
serious  problems  in  the transition regarding the time it took for our mission
critical  fiber  to  be  installed  at  the new facility in 2001. We encountered
unforeseen delays in moving into the new facility while the entire ITSP industry
was  encountering  major difficulties. Further complications came about when our
primary  telecommunications vendor failed to deliver redundant fiber used as the
backbone  to  support  the  Company's ITSP services. Subsequently, the 2001-2002
downfall  of  so  many  once viable communications companies including such name
brands  as  Worldcom, as one example dramatically accented the need for vertical
diversification  away  from  general  ITSP  services and more towards a vertical
industry  focus.   Difficulties  associated with raising the required capital to
sufficiently  fund  the  ITSP  business plan, as discussed in last year's 10KSB,
exacerbated  the  situation.

In  addition  to  the lack of capital required for the successful ramp up of the
ITSP  business  model  a dramatic downturn in the communications and IT services
industry  made it almost impossible to close more business and increase revenues
for  this  targeted sector. The dramatic curtailment of required capital and the
faltering of the ITSP industry, including communication and technology companies
as  a  whole, made it clear to management that we must try to position ourselves
to  obtain  core  business  in  other creative ways. Thus, we have suspended the
offering  of  general  ITSP  contract  services.

A  plan  was  born  to  leverage  our infrastructure and shift our service focus
towards  vertical  industries.  Thus,  after  the  acquisition of SCS, a natural
vertical  focus was placed on the tape transcription business being developed by
the  newly  acquired  SCS Corporation.  The general service ITSP business model,
although  still  believed  to have future potential, continues to be on hold and
de-emphasized.  Instead,  the  ITC  infrastructure  has  now  been redirected to
support  the  developing tape transcription and seismic data management business
of  SCS  Corporation,  our  wholly  owned  subsidiary.

Acquisition  of  SCS  Corporation  and  Leveraging  of  ITC  Infrastructure

We implemented a significant diversification strategy on May 31, 2001 by closing
our  acquisition  of  SCS  Corporation.  This  acquisition  was  a  critical and
strategic  transaction  that  has  significantly  strengthened  us,  giving  us
substantial  vertical  industry  expertise  in  the  area  of  Geophysical  Data
Management.  Neil  Moore, President for SCS Corporation and Robert Bearnth, Vice
President,  have  many  years  of  experience  in  the  Oil  and Gas Exploration
industry. Robert Bearnth is both a Geologist and Geophysicist and has worked for
major  oil  companies  including  Exxon  and  Saudi-Aramco.


Tape  transcription  business  and  related  marketing  strategies

During  2002, SCS Corporation closed its first major tape transcription contract
to  transcribe  the  seismic  data  located in Houston, Texas for the country of
Trinidad and Tobago. Beginning operations in April 2002, we increased production
on  this  contract  and  other  smaller  jobs  every  month through the month of
December  2002.

Additionally,  through  the  work  of  Geoserv  Marketing as a consultant, Harry
Briers, the Company's Executive Vice President, and Neil Moore, SCS's President,
new  marketing  materials  and  strategies  to  provide  turnkey  solutions  for
maximizing  oil  company  investments  in  their seismic data have emerged. This
long-term,  turnkey service is marketed as its NuDataTM services. As a result we
commenced  marketing  activity  to  acquire  contracts for significant long-term
transcription,  conversion,  and data management projects with several major oil
companies.  We  are  actively



                                        4
<PAGE>
customizing  programs  for  these  potential  customers  and  continually moving
towards  closing  more  significant  contracts in the near future resulting from
smaller  projects  that  we  have  already  successfully  performed.

Development  of  SCS  NuDataTM  Management  System

On  September  13,  2002 we acquired the copyrights and all rights to the source
code  of  the ONYX and ONYXII related conversion and transcription software. The
software  is  instrumental  in  providing  the  technical capabilities to handle
virtually  any  type of tape transcription and data conversion service. The ONYX
software establishes a major competitive advantage for us as a primary component
for  our  SCS  NuDataTM  Management System. The ONYX software has been developed
over  the  last  five  years and the Company is in the process of completing its
latest  version  of  the  software  to take full advantage of Microsoft's 32 bit
Operating  Systems  such as Windows 2000, Windows XP and future 64 bit operating
systems  as  technology  advances.  As  the  primary  cornerstone  of our NuData
Management  System,  ONYX  facilitates over 120 different tape formats including
such common formats like SEG A,B,C, or D, Western Code 4.2 and 1, Geocore 4, and
Tempest,  to  name a few. These formats are converted to the more standard SEG-Y
format and then consolidated to DVD. Features of the NuData(TM)Management System
in  addition  to  the  ONYX  based  conversion  capabilities  include:

          -    A  custom  and unique tape tracking system tightly monitoring and
               managing  the  transcription process and database to organize and
               keep  track  of all the data associated with a particular line or
               area  of  seismic  data.

          -    Bundled  services  to  scan  well  logs,  maps  and other related
               information  to  PDF  format and consolidate such related data on
               the  same  disk  or  DVD  as  the  converted  seismic  data.

          -    Quality  assurance  is  assured.  Data sets are catalogued in the
               NuDataTM  database  and  then  compared  to client's database and
               reconciled  to  NuDataTM  database.

          -    Once  consolidated  on  DVD,  there  are  many  different  data
               management  and  backup  solutions  available  for online virtual
               private  network (VPN) access established privately for a client,
               to  high  speed  transmission  from  Hyperdynamics  transcription
               facility  to  the  customer  across  high  bandwidth  capacity
               connection.

We  plan  to  continue  to  develop  new  features  to maximize the value of our
NuDataTM Management System. When coupled with our extensive industry experience,
the  NuDataTM  Management  System  allows  us  to  consolidate  and organize our
client's  seismic  data  in ways to save them substantial amounts in future data
maintenance  expenses.  We can dramatically enhance our customer's accessibility
and  utility  of  their seismic data thereby enhancing their ability to find new
O&G  reserves  faster  and  at a lower cost. In summary, the NuDataTM Management
System  makes  our  client's  data much more secure, accessible, manageable, and
portable  all  while  saving  them  significant  time  and  money.


Current  Focus  and  Direction  of  Business  Plan

     Mission  Statement

     To  successfully  discover  and  produce  commercially  viable  hydrocarbon
     reserves  offshore  the  Republic of Guinea and as an integrated technology
     service  provider  (ITSP(SM)), facilitate efficient seismic data management
     for  our  operations  and  our  clients.


                                        5
<PAGE>
Our wholly owned subsidiary, SCS Corporation, is now our sole operating company.
Through SCS's focus on technology-based services for the Oil and Gas exploration
industry, we have realigned our services into the following three areas in order
of  priority:

-    MANAGEMENT  OF  OIL  AND  GAS  EXPLORATION  AND  EXPLOITATION  OPERATIONS
     -Including  the  outsource  of  Oil  and Gas Technology services associated
     primarily  with  geophysical  data  management  including  seismic  data
     acquisition,  seismic  data processing including specialties in the area of
     data  transcription,  data  brokerage,  geophysical  interpretation  and
     analysis. With the requirements of exploration phases of the Production and
     Sharing  Agreement  regarding the Republic of Guinea, we are responsible to
     perform  and/or  contract  out  exploration  work including new 2-D and 3-D
     seismic  data  acquisition,  seismic analysis, other interpretive analysis,
     pinpointing  drilling  prospects,  negotiating  drilling  operations  for
     exploratory  wells,  negotiating  drilling  operations  including  working
     interest  and  royalties,  selection  of  drilling  partners,  selection of
     exploitation  areas  and  continued  ongoing  management  of  production
     operations  into  the  exploitation  phases  of  operations. With the large
     concession  and promising preliminary findings of our seismic analysis thus
     far,  the  success of this part of our business is extreme top priority for
     us.

-    ACQUISITION OF ADDITIONAL SEISMIC DATA MANAGEMENT RELATED COMPANIES. We are
     evaluating  whether  to  establish  a  processing  center at its integrated
     technology  center  or  the  possibility  of acquiring a seismic processing
     company  as a wholly owned subsidiary. Other acquisition targets that could
     help  us  increase  our  profits  would  be  companies  in the seismic tape
     transcription  business  and  seismic  data interpretation business. We are
     evaluating  the  possibility  of acquisitions of small service companies to
     give  the  company  expanded  capabilities  to  service  larger  and larger
     projects.

-    GEOPHYSICAL  DATA  TRANSCRIPTION,  MIGRATION,  PROTECTION, AND RESURRECTION
     SERVICES  -  Our  proprietary  ONYX  Software,  the  core  of  our NuDataTM
     Management  System  services, gives us advanced capabilities to efficiently
     transcribe  seismic  data  off  old tape media onto any other newer tape or
     disk  media. We can perform transcription on a batch job by batch job basis
     or  a  production  total  migration  of database basis. By transcribing and
     copying  on  a  total  data  migration  and production basis, old 2d and 3d
     seismic  data  stored  on old outdated tape media can be copied off the old
     media,  and  printed  well  log data and associated maps and reports can be
     digitized  and copied over to any other tape media or disk such as DVD-RAM.
     This  migration  and  organization  of data allows all associated data with
     specified  lines  of seismic information in a given area to be stored in an
     organized  retrievable  fashion and easily queried and quickly accessed for
     reference  and  further  analysis  in  the  future.

Hyperdynamics  is  an integrated technology services provider (ITSP(SM)) focused
in the oil and gas industry and with a unique opportunity to explore and produce
large hydrocarbon reserves in West Africa. Through our initial strategies in the
last  few  years  we began building our core ITSP infrastructure capability. The
acquisition  of SCS Corporation in 2001 led us to our vertical industry strategy
with  new  sources  for  revenues  and  growing  expertise  for technology based
services  in  the  oil  and  gas  industry.


Employees  and  Independent  Contractors

We  have  five  full  time employees. We use independent contractors to minimize
fixed  overhead.  While utilization of independent contractors reduces our gross
profits  in  the  interim, management believes that it ultimately minimizes risk
during our transition period and diversification strategy implementation. Direct
employment  is  expected  to  increase  gradually,  matching  revenues  with
expenditures.  No  employees are represented by a union and the Company believes
that  its  labor  relations  are  good.


                                        6
<PAGE>
Alliance  Partnerships,  Key  Vendors  and  Technical  Certifications

Although  we  have  put  our  ITSP  business  model on hold, we have enhanced or
maintained certifications with Microsoft as a Microsoft Solution Provider, Great
Plains  Software  as  eEnterprise  reseller,  Intel  Premier Partner, and Citrix
Systems  Certified  reseller  to name a few. The actual technical certifications
have  now  taken  a back seat to our vertical software development regarding our
new  version of ONYX software that is the cornerstone of our NuDataSM end-to-end
seismic  data  services. As such, our technical capabilities are more focused on
our  vertical  expertise  in  seismic  data  management.

Several of the oil companies we have marketed the NuDataTM Management System to,
for  example,  have expressed the desire to have a significant data circuit into
our  Integrated  Technology  Center  so we can easily service their seismic data
management needs. We will maintain grade A communications as required to deliver
the  top  level  of  services.
Other  alliance  partners  we  established  this fiscal year include an offshore
seismic acquisition company and a supercomputer seismic data processing company.


ITEM  2     Properties

In  2000  we  signed  a  10-year  lease  with AGB Westwood, LTD to lease our new
facilities  at the Westwood Technology Center, a 540,000 square foot development
in  Houston,  Texas.  Under the lease we leased approximately 17,807 square feet
NRA  of  space  to  be  used  initially  for  corporate offices, data center and
integration  center  operations  as  well  as marketing and sales for the NuData
Management System. In addition to this space we also have a right of first offer
on  an  adjacent  15,000  sq.  ft.

We  paid the first and last months rent of the 60-month lease upon signing. Upon
commencement of the lease we received a 6 month free rent period and then on the
7th  month  after commencement began paying  $20,774 per month or $14 per square
foot.  Should  the  we not elect to cancel the lease, as is our right, beginning
the  55th month of the lease the rate will change to $24,114 per month or $16.25
per  square  foot.


Item  3     LEGAL  PROCEEDINGS

In  2001,  we  were  named  as  a  defendant in a lawsuit styled Dixon Financial
Services,  Ltd.  v.  Fidelity Transfer Company, Erin Oil Exploration, Inc., Bill
Knollenberg,  Ron  Bearden,  R.F. Bearden Associates, Inc., James Chang, Nick H.
Johnson,  Riley  L.  Burnett,  Jr., Johnson, Burnett & Chang, L.L.P., Greenberg,
Peden,  Siegmyer  & Oshman, P.C., George Siegmyer and Hyperdynamics Corporation;
Cause  No.  2001-06263;  In  the 215th Judicial District Court of Harris County,
Texas

This suit alleges breach of contract by failure to deliver share certificates in
the  name  of Dixon Financial Services.  Investors' claims against third parties
have been denied by summary judgment leaving Hyperdynamics and Fidelity Transfer
as  defendants.  Both  defendants rely on Fidelity Transfer's refusal to deliver
certificates  when a court injunction remained outstanding. The Investor asserts
damages  in  excess  of $5,000.00.  We have and intend to continue to vigorously
defend  ourselves and to deny liability.  Discovery is at a standstill while the
Court  has  considered  various  motions  of  the  parties.

On  April  9, 2001, we were named as a defendant in a lawsuit styled Wellington,
LLC  vs.  Hyperdynamics  Corporation et al. Civil Action# 18811-NC, The Court of
Chancery  of  Delaware.

The  Plaintiff claims that we did not carry out conversion of series A preferred
stock  to  common stock.  On August 9, 2002 an "Agreement for Transfer of Claims
in  Delaware  Action  to  Georgia" was executed by the Plaintiff, Defendant, and
their  respective  counsels.  Subsequently,  the  lawsuit


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was  moved  in  its  entirety  to the Atlanta, Georgia to be litigated under the
lawsuit  discussed  BELOW.  It  was  agreed  that  the Plaintiff in the Delaware
action,  Wellington,  LLC.  would  become  the  Defendant  in  Atlanta.

On  November  5,  2001,  we  filed  a  lawsuit  that is now styled Hyperdynamics
Corporation,  Plaintiff,  v.  J.P.  Carey  Securities,  Inc.,  J.P.  Carey Asset
Management  LLC,  Joseph  C. Canouse, John C. Canouse, James P. Canouse, Jeffrey
Canouse,  Southridge  Capital  Management  LLC, Stephen Hicks a/k/a Steve Hicks,
Thomson  Kernaghan  &  Co., Limited, Mark Valentine, Talya Davies, Cache Capital
(USA),  L.P.,  Carpe Diem, Carpe Diem LTD., Wellington, LLC, Minglewood Capital,
LLC,  Falcon  Securities,  LTD, Navigator Management LTD., David Sims, and Citco
Trustees  (Cayman)  Limited,  Defendants;  and  Wellington  LLC,
Counterclaim/Third-Party  Plaintiff,  v.  Hyperdynamics  Corporation, a Delaware
corporation, Kent Watts, Michael Watts, Robert Hill, Harry J. Briers, DJX, Ltd.,
a  Belize corporation, and Does 1-10, Counterclaim/Third-Party Defendants, Civil
Action  File  No.  2001CV44988, In The Superior Court of Fulton County, State of
Georgia.

We filed our First Amended Complaint against Defendants on September 12, 2002 in
which  we  presented  thirteen  counts  for  Causes of Action against defendants
including  "Violations of Georgia Racketeer Influenced and Corrupt Organizations
(RICO)  Act  (O.C.G.A.  SS  16-14-1,  ET  SEO).

We  believe  that  more than one of the Defendants worked together to create the
appearance  of providing initial long-term financing ($3,000,000) and additional
financing commitments (up to additional $5,000,000), all from reputable sources,
while  the  Defendants'  real  plan  was  to  manipulate  our  stock  through
contractually  prohibited  short  selling  and  multiple  breaches  of  the
contractually  agreed  to  selling  covenants.

We are subject to counterclaims in the Georgia litigation.  The counterclaimants
allege  that  Hyperdynamics  and  its  officers  and  directors  breached  their
fiduciary  duties  to shareholders and committed other tortuous acts.

We  intend  to  continue  to  vigorously  pursue  damages.  The case is still in
discovery  at  this  time.

On  September  1,  2003,  AT  &  T  Corporation  filed  suit against us alleging
non-payment  of  bills and alleging damages of $387,289.98, plus interest, costs
of  court,  and  attorney's  fees  in a suit styled AT & T Corporation, Teleport
Communications  Group,  Inc.  and  Teleport  Communications  Houston, Inc., Both
Wholly  Owned Subsidiaries of AT & T Corporation; Civil Action No. H-03-3369; In
the  United  States  District  Court for the Southern District of Texas, Houston
Division

We deny their claims and, in the near future, we will file and vigorously pursue
counterclaims  asserting  extensive  damages.


ITEM  4     Submission  of  Matters  to  a  Vote  of  Security  Holders

None


PART  II

ITEM  5     Market  for  Registrant's  Common  Equity  and  Related  Stockholder
            Matters

Price  Range  Of  Common  Stock

Our  Common  Stock is traded on the OTCBB under the symbol "HYPD." The following
table  sets forth the quarterly high and low bid prices per share for the Common
Stock, as reported by the OTCBB. The bid prices reflect inter-dealer quotations,
do  not  include  retail  markup, markdown, or commission and do not necessarily
reflect  actual  transactions.


                                        8
<PAGE>
<TABLE>
<CAPTION>
                       High Bid   Low Bid

<S>                   <C>         <C>
FISCAL 2002
  First Quarter          1.3400   0.6500
  Second Quarter         1.0000   0.4000
  Third Quarter          0.9000   0.4300
  Fourth Quarter         0.6500   0.2300

FISCAL 2003
  First Quarter          0.3800   0.2300
  Second Quarter         0.4500   0.1800
  Third Quarter          0.3700   0.2200
  Fourth Quarter         0.8900   0.2600
</TABLE>

On  October  3,  2003 the last bid for the Common Stock as reported by the OTCBB
was  $1.73 per share. On October 03, 2003, there were 27,652,423 stockholders of
record  of  the  Common  Stock.

We  have  not  paid, and we do not currently intend to pay cash dividends on our
common  stock  in  the  foreseeable  future.  The current policy of our Board of
Directors  is to retain all earnings, if any, to provide funds for operation and
expansion of our business. The declaration of dividends, if any, will be subject
to  the discretion of the Board of Directors, which may consider such factors as
our  results  of  operations, financial condition, capital needs and acquisition
strategy,  among  others.

Securities  authorized  for  issuance  under  equity  compensation  plans.

The following table reflects all equity compensation plans to date that have not
been approved specifically by security holders. We have a Stock and Stock Option
Plan  and  several Individual Compensation Arrangements established by the Board
of  Directors.

<TABLE>
<CAPTION>
                                   EQUITY COMPENSATION PLAN INFORMATION


                                                                                   NUMBER OF SECURITIES
                                                                                 REMAINING AVAILABLE FOR
                                                                                  FUTURE ISSUANCE UNDER
                              NUMBER OF SECURITIES TO       WEIGHTED-AVERAGE       EQUITY COMPENSATION
                            BE ISSUED UPON EXERCISE OF     EXERCISE PRICE OF         PLANS (EXCLUDING
                               OUTSTANDING OPTIONS,       OUTSTANDING OPTIONS,   SECURITIES REFLECTED IN
                                WARRANTS AND RIGHTS       WARRANTS AND RIGHTS          COLUMN (A))

PLAN CATEGORY                           (A)                       (B)                      (C)
--------------------------  ---------------------------  ----------------------  ------------------------
<S>                         <C>                          <C>                     <C>
Equity compensation plans
approved by security
holders
--------------------------  ---------------------------  ----------------------  ------------------------
Equity compensation plans
not approved by security
holders (1)                                                                                        79,942
--------------------------  ---------------------------  ----------------------  ------------------------
Equity compensation plans
not approved by security
holders (2)                                   3,890,000  $                 0.25                         0
--------------------------  ---------------------------  ----------------------  ------------------------
TOTAL                                         3,890,000  $                 0.25                    79,942
--------------------------  ---------------------------  ----------------------  ------------------------

<FN>
(1)  The  Stock  Option  Plan  of  Hyperdynamics  dated  effective  May 7, 1997 initiated by the Board of
</TABLE>


                                        9
<PAGE>
Directors  authorized 1,620,000 shares. The Board of Directors amended this plan
on December 3, 2001 as the "Stock and Stock Option Plan" and increased the total
shares available under the plan by 3,500,000 additional shares. This brought the
total  shares  that  could be issued under these plans to 5,120,000.  As of June
30,  2003,  options  to  purchase 1,628,100 shares have been granted under these
plans  and  of  those, 1,421,964 have been exercised and 206,136 have expired or
been  forfeited  and  made available for reissue.  In addition, 3,618,094 shares
have  been  issued directly as compensation under these plans.  Thus, a total of
5,040,058  shares  have been issued under the Plan.  As of June 30, 2003, 79,942
shares  are  available  to  be  issued  or  granted  pursuant  to  employment or
consulting  agreements  or  other  determination  by  the  board  of  directors.

(2)  We presently have warrants to purchase 3,890,000 shares of common stock  at
a  weighted  average price of $.25 per share which are currently outstanding and
are  derived  from  the  following  events:

(a)  On January 15, 2001, we issued warrants to purchase 30,000 common shares to
a  customer  in  conjunction  with  its  execution of a contract to purchase ITC
services  from us and to provide marketing services for us.   These warrants are
exercisable  at  a  price  of  $1.50  per  share and expire on December 1, 2004.

(b)  On  September  26,  2002,  we awarded warrants to purchase 50,000 shares of
common  stock  at  $.28 per share to an employee.  This employee resigned during
April  2003, thus forfeiting the warrants that had not yet vested.  As a result,
she  holds  warrants  to  purchase  10,000  shares  of  restricted  common stock
exercisable  at  $.28  per  share  and  expiring  on  September  26,  2005.
(c)  On  June 30, 2003, we approved an individual compensation arrangement for a
consultant  who  provided  investment  relations  services. The compensation was
150,000  two-year  warrants  for unregistered 144 restricted common stock with a
strike  price  of  $0.50.

(d)  On August 26, 2002 we repriced warrants previously awarded on July 25, 2001
pursuant to an individual compensation arrangement for each of our four officers
whereby  1,500,000  warrants  for  restricted  common stock were granted with an
annual vesting for each officer with required continued employment, scheduled as
follows:

     Immediate  vesting     300,000
       July 26, 2002        400,000
       July 26, 2003        400,000
       July 26, 2004        400,000

The  warrants  are  for three years from the date of vesting at a price of $0.23
per  share  with  a  cashless  exercise provision. On August 26, 2002 the strike
price  was  reduced  from  $0.40  to  $0.23  per share. On November 9, 2001, one
officer  exercised  his  300,000  warrants  through  a  cashless exercise with a
closing  price  of $0.60 per share on November 8, 2001 and he was issued 100,000
shares  of  restricted  common  stock.  We  no longer employ this officer so the
remaining  1,200,000  warrants  allocated  to  him  have been forfeited. Another
officer resigned in October 2002 and forfeited the 800,000 warrants that had not
yet  vested.  Therefore, the outstanding warrants as of October 3, 2003 pursuant
to  the  warrants  originally  awarded  on  July  25,  2001  total  3,700,000.

Under  the  Stock  and  Stock Option plan, options will vest over a five-year or
other  negotiated  period  and  will have a strike at a price set at the time of
grant and based on the then current market value of the stock. Our President has
the  authority  as  given  by  the  Board of Directors to negotiate stock option
agreements  with  corporate  consultants  as  well.


                                       10
<PAGE>
The purpose of the stock option program will be to further our interest, and the
interest of our subsidiaries and our stockholders by providing incentives in the
form  of stock or stock options to key employees, consultants, and directors who
contribute  materially  to  our  success  and profitability. We believe that our
future  success  will  depend  in  part  on our continued ability to attract and
retain  highly  qualified  personnel  as employees, independent consultants, and
attorneys.  The  issuance  of  stock  and  grants  of  options and warrants will
recognize  and  reward outstanding individual performances and contributions and
will  give  such  persons  a  proprietary  interest  in us, thus enhancing their
personal  interest  in  our  continued  success  and  progress.  We  pay  wages,
salaries, and consulting rates that we believe are competitive. We use the Stock
Option  Plan  and  Individual Compensation Arrangements to augment our available
compensation  packages.



Recent  Sales  of  Unregistered  Securities

We  effected  the  following  transactions  in  reliance  upon  exemptions  from
registration under the Securities Act of 1933 as amended (the "Act") as provided
in  Section  4(2)  thereof.  Each certificate issued for unregistered securities
contained  a  legend  stating that the securities have not been registered under
the  Act  and setting forth the restrictions on the transferability and the sale
of  the  securities.  No  underwriter  participated  in,  nor  did  we  pay  any
commissions  or  fees  to  any  underwriter  in  connection  with  any  of these
transactions.  None  of the transactions involved a public offering.  We believe
that each person had knowledge and experience in financial and business matters,
which  allowed  them  to  evaluate  the  merits  and  risk of the receipt of our
securities.  We  believe that each person was knowledgeable about our operations
and  financial  condition.

During  May 2003, we sold 2,266,667 shares of stock to five individuals pursuant
to subscription agreements for $765,000 cash.  This was a private placement made
in  reliance  on  Section  4(2)  of  the  Act.

In  June 2003, we awarded warrants to purchase 150,000 shares of common stock at
an  exercise  price  of  $.50  per  share  to  a consultant.  This was a private
placement  made  in  reliance  on  Section  4(2)  of  the  Act.

During June 2003, two investors purchased 1-1/5 units consisting of 1-1/5 shares
of  SCS  Corporations (our wholly owned subsidiary) Series A Preferred Stock and
warrants  to  purchase  60,000  shares of Hyperdynamics common stock at $.25 per
share  for  $120,000.  This  was a private placement made in reliance on Section
4(2)  of  the  Act.



ITEM 6     Management's Discussion and Analysis of Financial Condition and
Results  of  Operations

              CAUTIONARY  STATEMENT ON FORWARD-LOOKING INFORMATION

We  are including the following cautionary statement to make applicable and take
advantage  of  the  safe  harbor  provision of the Private Securities Litigation
Reform  Act  of  1995  for  any forward-looking statements made by us, or on our
behalf.   This  Annual  Report  on  Form  10-KSB  Amendment  No.  1  contains
forward-looking  statements.  Forward-looking  statements  include  statements
concerning  plans, objectives, goals, strategies, expectations, future events or
performance  and  underlying  assumptions  and other statements, which are other
than  statements  of  historical facts.  Certain statements contained herein are
forward-looking  statements  and,  accordingly, involve risks and uncertainties,
which  could  cause  actual  results or outcomes to differ materially from those
expressed  in  the  forward-looking  statements.  Our  expectations, beliefs and
projections are expressed in good faith and we believe them to have a reasonable
basis,  including  without  limitations,  management's examination of historical
operating  trends,  data  contained in our records and other data available from
third  parties,  but  there  can be no assurance that management's expectations,
beliefs  or projections will result or be achieved or accomplished.  In addition
to  other  factors  and


                                       11
<PAGE>
matters discussed elsewhere herein, the following are important factors that, in
our  view,  could cause actual results to differ materially from those discussed
in  the  forward-looking statements: our ability of to respond to changes in the
information system environment, competition, the availability of financing, and,
if  available, on terms and conditions acceptable to us, and the availability of
personnel  in  the  future.  We  have  no  obligations to update or revise these
forward-looking  statements  to  reflect  future  events.

The  following  discussion  should  be  read  in  conjunction with the financial
statements  and notes thereto for the fiscal years ended June 30, 2003 and 2002.

Results  of  Operations

Revenues  increased to $468,022 for the year ended 2003, from $355,628 for 2002.
The  32%  increase  was due to new contracts in the area of our current focus of
seismic data management services.   As we look to the future, we expect revenues
to decrease in the short term because our significant tape transcription project
failed  to  be renewed and other tape transcription business is too early in the
sales  process  to have a significant effect on revenues.  Additionally, we have
focused  primarily  on  performing  work  associated with the Guinea concession.
Management believes this focus will yield the most profound result in the coming
years.

Cost  of  revenues  decreased  to  $469,158 (100% of revenue) for the year ended
2003, from $542,240 (152% of revenue) for 2002. The decrease in cost of revenues
as  a  percentage  of revenues is due to the changed services mix.  The services
that we provided in 2003 consisted mainly of seismic data transcription and this
type  of  service  has  a  higher  contribution  margin.

     Selling,  General and Administrative expenses increased to $3,264,152 (697%
of revenue) for the year ended 2003, as compared to $2,565,816 (721% of revenue)
for  2002.  The  main  difference  is  attributable  to  variable accounting for
certain  options  awarded  to  officers  and  directors; the variable accounting
resulted  in  a  $2,147,000  charge  to  expense  this year. Otherwise 2003 SG&A
expenses would have only been $1,117,152.  We will continue to mark these option
awards  to  the  market  price until they are exercised or they expire.  Thus we
will  continue  to  incur  this  non-cash  expense.

Other  factors  involved  in the changes in Selling, General, and Administrative
expenses include the reduction of consulting expenses from $1,474,432 in 2002 to
$299,354  in  2003.  Consulting  expenses  include  $85,014 arising from options
issued  to  a consultant.  Selling expenses approximately halved from $74,034 in
2002  to  $38,745  in  2003.  A  one-time debt renegotiation cost of $100,000 is
included  in  2003  results.  In addition to the increased Selling, General, and
Administrative expense, we experienced impairment losses of $350,000 on goodwill
acquired  during  2002,  and  $354,061  on  leasehold  improvements.

Net  Loss.  Our  net loss chargeable to common shareholders was $(4,376,903), or
($.19)  per  share  in  2003  as opposed to $(3,180,866), or $(.18) per share in
2002.  The  net  loss chargeable to common shareholders includes a deduction for
preferred  stock dividends accrued but not paid of $186,779 in 2003 and $175,595
in  2002.  The  negative  results  are  due  to  the  factors  discussed  above.

Critical  Accounting  Policies


Property  and  Equipment,  Unproved  Oil  and  Gas  Properties,  and  Goodwill:

We  invested  $620,000  in leasehold improvements in April 2001 when we moved to
our  new  Integrated  Technology  Center  location.  These  improvements were to
support our new IT consulting services that we had expected to grow dramatically
when  we  planned  this  move  in  mid-2000.  This  growth didn't happen, and we
purchased  SCS  Corporation  in May 2001 to diversify into seismic data recovery
services.  The  $350,000  in  goodwill  represents  last  year's  purchase price
renegotiation  of


                                       12
<PAGE>
part  of  the  contingent  purchase  price  due  the sellers of SCS Corporation.
Additionally,  we  have  invested approximately $900,000 in unproved oil and gas
properties  during  the  year  ended  June 30, 2003.  The $350,000 goodwill, the
$900,000  unproved  properties,  and  the  remaining  book value of the $620,000
investment  in the ITC (approximately $354,000 as of June 30, 2003) were subject
to  impairment  and  the $350,000 goodwill and the $354,000 net value of the ITC
were  written  down  as of June 30, 2003.    The Unproved Oil and Gas Properties
were  determined  to be unimpaired because we expect various strategies to raise
funds,  as  discussed  in  the liquidity and capital resources section, to raise
sufficient  funds  to satisfy our obligations with regard to the Guinea project.

Off-Balance  Sheet  Arrangements

We  have  a  contractual arrangement with US Oil Corporation that we will pay US
Oil  $1,600,000  if SCS obtains at least $3 million in third party financing for
the  Guinea  development project, and a 3% royalty if oil and gas is produced on
our Guinea project.  This contingent payable will, if paid, increase the cost of
the  Unproved  Oil  and Gas properties at the time of payment.  As such, it will
increase the cost of sales over the oil and gas production period as part of the
periodic  amortization  of  the Proved Properties, or, if the development of the
properties  does  not  culminate  in  oil  and  gas production, the cost will be
charged  to  expense  as  an  impairment.

We  have three capital leases as disclosed in Note 8 of our financial statements
and  we have an operating lease with our landlord as disclosed in Note 13 of our
financial  statements.

We also have a contingent $350,000 note payable that is only payable with 25% of
the  profits  of  SCS  Corporation. We have the right to pay this note off using
common  stock.

Liquidity  and  Capital  Resources

     At June 30, 2003 our current ratio of current assets to current liabilities
was  .18  to  1.  This  compares  to  .27 to 1 for 2002. It remains management's
priority  to  achieve  cash  flow  from  operations  as  quickly as possible. As
reflected  in  the  Going Concern opinion, it is critical as discussed hereunder
that  we  obtain  additional  working  capital  so  that we can continue to meet
current cash obligations while we continue to improve cash flow from operations.
It  is  important  to  note  however,  that deeper analysis of the current ratio
reveals  several  current  obligations that while they reduce the current ratio,
there  is  no  requirement  to  use  cash to satisfy the obligation. These items
include  Deposits,  Dividends  Payable,  and Dividends payable to related party.
Adjusting  these  amounts not requiring cash would calculate an adjusted current
ratio  of  .23  to  1.

We  have been operating with a cash deficit this entire last year. We have taken
steps  to  minimize  cash  requirements as our payroll staff is cut currently to
five  employees  including SCS and we plan to hire consultants as we need to and
add  employees  as  our  cash flow based business picks up as expected. Our cash
flow  statements show a 39.6% decrease in cash flow used by operations from 2002
to  2003  (-$821,272  and  -$496,059 respectively). This significant improvement
reflects  management's  policies  in cutting overhead. We are continuing to make
significant  progress  in  reducing and ultimately eradicating our negative cash
flow  from  operations.  For  example,  the  monthly  average  of  cash  used by
operations  for  fiscal  year end 2003 was $41,338 compared to $68,490 per month
for  2002. As a public company, the health of our market is paramount to be able
to  raise  critical capital. During continued tough times such as this year, our
only  source for obtaining this critical capital has been through our ability to
place  private  investments with accredited investors, for restricted stock from
several  of  our significant long-term shareholders and also from some exercises
of  warrants  and  options. This fiscal year we raised $789,639 as proceeds from
sale of restricted common stock.  Without these funds paid in, we would have not
been able to reasonably meet our current obligations this last fiscal year. With
the  significant  work  requirements  for  SCS  to accomplish additional seismic
acquisition,  processing,  and  analysis  of  this year, we have implemented new
financing strategies involving private sales of restricted securities as we have
done


                                       13
<PAGE>
in  the past and other private financing.  Additionally, there are several other
options  available  to  us  that  we  are  constantly  evaluating.

The  financial  statement  footnotes and auditor's opinion clearly state a going
concern  as  to  whether  the  company can continue operating on a negative cash
basis.  Should  no  additional  capital be raised we could possibly not have the
necessary  resources  to  continue as a viable company. If we are able to obtain
additional  debt  or equity financing, we will be able to generate the necessary
funds to operate at a minimum requirement level and then we can focus on raising
additional  capital,  either  through private or public equity financing or debt
financing,  to  fund  3D seismic and other work necessary to prepare for working
interest  sales  and  drilling as early as next year. As the lion's share of all
funds  raised  are  going to improve our drilling prospects, management believes
that  all  the  additional  capital  funds raised will substantially enhance our
asset  value  in  our oil and gas concession, thus greatly enhancing shareholder
value.

Although  we  did  not reach our goal to cash flow from operations from our tape
conversion  operations,  we  still  have  significant  potential for new service
contracts  that  give  us  that  opportunity. With our heavy focus on performing
under  the  Farmout  Agreement, we are in the mode of building an asset and thus
raising  the necessary capital to perform our work programs and seismic analysis
is  our  most  important financial objective. In addition, management is working
diligently  on  possible  acquisitions  with  a  required  criteria of cash flow
positive to help improve cash flow from operations. With successfully structured
acquisitions, management feels we can significantly improve our cash position in
the  coming  periods.

We  could  obtain additional capital also upon the exercise of previously issued
in  the  money  outstanding  warrants  and  options  for  common  stock.

We  have  capital  lease  obligations  of  $51,957  financing certain electrical
equipment  in  our  data center. We also have a contingent $350,000 note payable
that  is  only  payable  with 25% of the profits of SCS Corporation. We have the
right  to  pay  this  note  off  using  common  stock.  We  do not plan on using
significant  debt  financing  except  for  the  possibility  of  financing
income-producing  assets  in  the  future.

Finally,  we  originally purchased a CD in the amount of $436,300, which secured
the lease at Westwood with a Letter of Credit arrangement. This CD and letter of
credit  is  now $283,595 of which $87,260 ($436,300 x 20%) is due to be released
to  the  Company  on  November 1, 2003. Thereafter, $130,890 will be released on
November  1,  2004  and  also  another  $65,445  on  November  1,  2005.

For  these  reasons  above, management believes that it can solve our historical
cash  flow  problems  and  potentially eradicate its going concern over the next
month  while  at  the same time greatly enhancing shareholder value. This is the
current  primary  objective  for  us  to  accomplish  as  soon  as  practicable.


ITEM  7     Financial  Statements

The  information  required  hereunder is included in this report as set forth in
the  "Index  to  Financial  Statements  on  page  F-1.



ITEM 8     Changes in and Disagreements with Accountants on Accounting and
           Financial  Disclosure

     None


                                       14
<PAGE>
ITEM  8(A)  Controls  and  Procedures

Kent  Watts,  our  Chief  Executive Officer and our Chief Financial Officer, has
concluded  that  that our disclosure controls and procedures are appropriate and
effective.   Mr.  Watts has evaluated these controls and procedures as of a date
within  90 days of the filing date of this report on Form 10-KSB.  There were no
significant  changes in the our internal controls or in other factors that could
significantly  affect these controls subsequent to the date of their evaluation,
including  any  corrective  actions  with regard to significant deficiencies and
material  weaknesses.


PART  III

ITEM  9     Directors,  Executive Officers, Promoters and Control Persons;
            Compliance  with  Section  16(A)  of  the  Exchange  Act

Executive  Officers  and  Directors

The  following table sets forth the names and positions of each of our executive
officers  and  directors.

<TABLE>
<CAPTION>
Name             Position                             Age
---------------  -----------------------------------  ---
<S>              <C>                                  <C>

Kent Watts       Director, Chief Executive Officer,    45
                 and Chief Financial Officer

Robert J. Hill   Director                              49

Harry J. Briers  Director, Vice President-Operations   40
                 Chief Operating Officer

Lewis Ball       Secretary                             72
</TABLE>



     Directors  are  elected  annually  and  hold  office  until the next annual
meeting of our stockholders or until their successors are elected and qualified.
Officers  are  elected  annually  and  serve  at  the discretion of the Board of
Directors. There is no family relationship between or among any of the directors
and our executive officers. Board vacancies are filled by a majority vote of the
Board.

     Kent Watts, age 45, became Chairman of the Board of Directors and was named
the  Company's  President  and Chief Executive Officer (CEO) and Chief Financial
Officer (CFO) on June 4, 1997.  Mr. Watts has been a certified public accountant
in Texas since 1985 and a licensed real estate broker since 1979.  He received a
Bachelor  of  Business  Administration  Degree from the University of Houston in
1983.  Mr.  Watts  founded  MicroData  Systems, Inc., a former subsidiary of the
Company,  in  1988  and  was MicroData's CEO until he became President and Chief
Executive  Officer  of  HyperDynamics  Corporation.  He has extensive experience
designing  and  working  with  integrated  communications  network  systems  and
management  information  systems;  additionally  he designed the Company's first
Integrated  Technology Center.  He continues to fulfill the dual role as CEO and
CFO.  As  the  Company's  CEO  and  Chairman  of the Board, he remains primarily
responsible  for  managing  the  Company's  strategic direction and focus on the
vertical  oil  and  gas  industry.  As  CFO he manages the capital structure and
financing  requirements  for  the  company,


                                       15
<PAGE>
while  overseeing  and  insuring  the  Company's  compliance with all government
reporting  requirements  as well as any legal issues involving the Company.   He
holds  no  other  directorships.

     Robert  J. Hill, age 49, served as our Chief Operating Officer between June
1996 and June 1997.  In July, 1997, Mr. Hill was appointed vice-president of the
Company  and  he  resigned  that  position  in  October  2002.  Before  joining
Hyperdynamics, Mr. Hill served for two years as vice president of Hudson Trinity
Incorporated, a privately held Internet Service Provider and network engineering
company  that  also  contracted senior network engineers to Loral Space Systems,
Inc.,  the  principal  civilian  contractor  for  the  design,  development  and
installation  of NASA's new manned space flight control center.  Previously, Mr.
Hill served for three years as Acquisition Manager for Loral Space Systems, Inc.
Mr. Hill has earned an MBA degree from South Eastern Institute of Technology and
a BA degree from the State University of New York at Potsdam. Mr. Hill currently
serves  the  Company  as  a  Director.   He  currently  works as a major account
executive  at  XO  Communications  and  he  holds  no  other  directorships.

     Harry  James  Briers,  age  40, has been a Director since March 2, 2000. He
served  as  the  Director  of  Integrated Information Systems when he joined the
company in May 1998. Mr. Briers was also elected as Vice President of Operations
for  HyperDynamics  Corporation and named the Chief Operating Officer. He became
the  Company's  Executive  Vice  President  in October 2002. From 1988 until May
1998,  Mr.  Briers  owned  and operated Perfect Solutions, a software consulting
firm  in  Houston,  Texas.  He  has  extensive  experience  in  the  sale  and
implementation of mission critical software applications.  Prior work experience
included  consulting  for Ernst & Young in their Entrepreneurial Services Group.
Mr.  Briers  has  a  BS  in  Accounting  and  an  MBA  from  the  University  of
Houston-Clear  Lake.  Mr.  Briers  continues  to operate substantially in a dual
service  mode.  As  Executive  Vice President he is responsible for managing the
daily operations for production of integrated seismic services and he is heavily
involved  in  the  marketing  and  sales of the Company's services including the
performance  of the responsibilities regarding the Company's oil and gas farmout
of  the  Guinea concession. Mr. Briers also continues to serve as a director for
the  Company.  He  holds  no  other  directorships.

     Lewis  E.  Ball,  age  72, has served as the secretary of the Company since
1997  and  as  the  Chief Financial Officer from June 1996 to January 1997.  Mr.
Ball  has  been a financial consultant to a number of companies since 1993.  Mr.
Ball  has  served  as  a director of JVWeb, Inc. since 1997 and as secretary and
treasurer  of  JVWeb,  Inc.  since  1998.  Mr.  Ball  has many years of industry
experience  as  a  Chief  Financial  Officer  with  Stevenson Services, Inc. and
Richmond  Tank  Car Company (from 1983 to 1993).  Mr. Ball is a Certified Public
Accountant  and  a  Certified  Management  Accountant.  Mr. Ball has a B.B.A. in
Finance  from  the  University  of  Texas,  and  he  did  post-graduate  work in
accounting  at  the  University  of  Houston.  He  holds no other directorships.

Section  16(a)  Beneficial  Ownership  Reporting  Compliance

     We have reviewed the Forms 3 and 4 submitted to us relating to fiscal 2003.
We have found that Harry Briers, Robert J. Hill, and Kent Watts failed to timely
file  Form  4's during fiscal 2003, but they have filed the required Form 4's as
of the date of this 10-KSB filing.   We have also found that DJX Ltd should file
a  Form 3 because it is a greater than 10% beneficial owner of our common stock;
it has not yet filed its Form 3 but we expect it to become compliant in the near
future.

ITEM  10     Executive  Compensation

The  following  table  reflects  all  forms of compensation for the fiscal years
ended  June 30, 2001, 2002 and 2003 for services provided by our named executive
officers.


                                       16
<PAGE>
<TABLE>
<CAPTION>
SUMMARY  COMPENSATION  TABLE

                                ANNUAL COMPENSATION                  LONG TERM COMPENSATION
                          -------------------------------  ------------------------------------
                                                                    AWARDS             PAYOUTS
                                                           -------------------------  ---------
                                                  OTHER                  SECURITIES                ALL
                                                  ANNUAL   RESTRICTED    UNDERLYING               OTHER
NAME AND                                          COMPEN      STOCK       OPTIONS       LTIP      COMPE
PRINCIPLE                  SALARY      BONUS      SATION     AWARDS         SARS       PAYOUTS   NSATION
POSITION            YEAR     $           $          $           $            #            $         $
------------------  ----  --------  -----------  --------  -----------  ------------  ---------  --------
<S>                 <C>   <C>       <C>          <C>       <C>          <C>           <C>        <C>

Kent Watts (1)      2003  $100,000  $147,314(3)  $    -0-  $       -0-  1,100,000(3)  $     -0-  $    -0-
  Chief Executive   2002   100,000   114,123(2)       -0-          -0-    400,000(2)        -0-       -0-
  Officer and       2001   100,000    76,796(2)       -0-          -0-    300,000(2)        -0-       -0-
  Chief Financial
  Officer
------------------  ----  --------  -----------  --------  -----------  ------------  ---------  --------
Harry Briers        2003  $ 87,100  $147,314(3)  $    -0-  $       -0-  1,100,000(3)  $     -0-  $    -0-
  Chief Operating   2002    79,200   114,123(2)       -0-          -0-    400,000(2)        -0-       -0-
  Officer and       2001    79,200    76,796(2)       -0-          -0-    300,000(2)        -0-       -0-
  Vice President
  of Operations
------------------  ----  --------  -----------  --------  -----------  ------------  ---------  --------

<FN>
(1) On July 21, 1999, the Board of Directors of Hyperdynamics Corp. unanimously agreed to the terms of an
"Executive  Employment  Agreement" for Kent Watts. The Agreement was duly executed on July 21, 1999 which
establishes Mr. Watts as our President, Chief Executive Officer (CEO), and Chief Financial Officer (CFO).
In  the  agreement  it  is  noted  that  we intend to hire a new CFO at the time the board deems it to be
beneficial.  At  that  time,  Mr.  Watts  will  continue  his responsibilities as President and CEO while
relinquishing  his duty as CFO.  As of June 30, 2003, Mr. Watts is still acting as our CFO.  The contract
allows  for  a  base salary of $100,000 annually with a performance based incentive salary based on 5% of
adjusted  net  income,  up  to  an  additional  $100,000  in  salary. Therefore, maximum salary under the
Agreement  is  $200,000  annually. This agreement has been renewed on a year-by-year basis under the same
terms.

(2)  On  July  25,  2001  we approved a warrant package for our officers. Each officer obtained 1,500,000
3-year warrants for restricted common stock with a strike price of $0.40, of which 300,000 were earned in
fiscal  2001  but  vested  on  the  grant date, which occurred during fiscal 2002.  An additional 400,000
warrants  were  earned  in  fiscal  2002.

(3)  On August 26, 2002, the strike price of the warrants described in note (2) was reduced to $.23.  The
repricing  of  the  warrants  was valued as a new grant in fiscal 2003.  This table reflects the $122,857
original fair value of the 400,000 warrants earned during 2003 and $24,457 fair value attributable to the
repricing  of  1,100,000  warrants  for  a  total  of  $147,314.
</TABLE>


                                       17
<PAGE>
<TABLE>
<CAPTION>
OPTION/SAR GRANTS TABLE

                                 OPTION/SAR GRANTS IN LAST FISCAL YEAR
                                          [Individual Grants]


                                            PERCENT OF                  MARKET
                              NUMBER OF        TOTAL       EXERCISE    PRICE ON
                             SECURITIES    OPTIONS/SARS    OR BASE     DATE OF
          NAME               UNDERLYING     GRANTED TO      PRICE       AWARD     EXPIRATION DATE
                            OPTIONS/SARS   EMPLOYEES IN     ($/SH)      ($/SH)
                             GRANTED (#)    ISCAL YEAR

(A)                              (B)            (C)          (D)         (D)            (E)
--------------------------  -------------  -------------  ----------  ----------  ----------------
<S>                         <C>            <C>            <C>         <C>         <C>
Kent P. Watts
CEO and
Chief Financial Officer           300,000             8%  $     0.23  $     0.27  July 25, 2004(1)
--------------------------  -------------  -------------  ----------  ----------  ----------------
Kent P. Watts
CEO and
Chief Financial Officer           400,000            11%        0.23        0.27  July 25, 2005(1)
--------------------------  -------------  -------------  ----------  ----------  ----------------
Kent P. Watts
CEO and
Chief Financial Officer           400,000            11%        0.23        0.27  July 25, 2006(1)
--------------------------  -------------  -------------  ----------  ----------  ----------------
Kent P. Watts
CEO and
Chief Financial Officer           400,000            11%        0.23        0.27  July 25, 2007(1)
--------------------------  -------------  -------------  ----------  ----------  ----------------
Harry Briers
COO and Vice President of
Operations                        300,000             8%        0.23        0.27  July 25, 2004(1)
--------------------------  -------------  -------------  ----------  ----------  ----------------
Harry Briers
COO and Vice President of
Operations                        400,000            11%        0.23        0.27  July 25, 2005(1)
--------------------------  -------------  -------------  ----------  ----------  ----------------
Harry Briers
COO and Vice President of
Operations                        400,000            11%        0.23        0.27  July 25, 2006(1)
--------------------------  -------------  -------------  ----------  ----------  ----------------
Harry Briers
COO and Vice President of
Operations                        400,000            11%        0.23        0.27  July 25, 2007(1)
--------------------------  -------------  -------------  ----------  ----------  ----------------

<FN>
1)  On July 25, 2001 we approved a warrant package for our named officers where 3,000,000 warrants
for  restricted  common  stock  were granted. No other options or warrants were granted during the
fiscal  year.  Mr.  Watts  and  Mr.  Briers each obtained 1,500,000 3-year warrants for restricted
common  stock  with  a  strike  price of $0.40; the strike price was reduced on August 26, 2002 to
$.23.  1,100,000  warrants  are  vested  currently and 400,000 vest on July 25, 2004. The warrants
expire  three years from the date of vesting. Thus, 300,000 warrants expire July 25, 2004, 400,000
expire  on  July  25,  2005,  400,000  expire on July 25, 2005, and the remaining unvested 400,000
warrants,  provided  that  they  vest,  will  expire  on  July  24,  2007.
</TABLE>


                                       18
<PAGE>
<TABLE>
<CAPTION>
                            AGGREGATE OPTIONS EXERCISES IN LAST FISCAL YEAR
                                   AND FISCAL YEAR END OPTION VALUES



                                          NUMBER OF UNEXERCISED            VALUE OF UNEXERCISED
                   SHARES                      SECURITIES          IN THE MONEY OPTIONS AT FISCAL YEAR
                 ACQUIRED ON   VALUE    UNDERLYING OPTIONS AT FYE                  END
NAME              EXERCISE    REALIZED  EXERCISABLE/UNEXERCISABLE       EXERCISABLE/UNEXERCISABLE
---------------  -----------  --------  -------------------------  ------------------------------------
<S>              <C>          <C>       <C>                        <C>

Kent P. Watts
CEO and
Chief Financial
Officer                    0         0            700,000/800,000  $                   560,000/$640,000
---------------  -----------  --------  -------------------------  ------------------------------------
Harry Briers
COO and
Vice President
of Operations              0         0            700,000/800,000  $                   560,000/$640,000
---------------  -----------  --------  -------------------------  ------------------------------------
</TABLE>

Mr. Watts and Mr. Briers did not exercise any warrants. All of the warrants were
in  the  money at fiscal year end 2003.  Mr. Watts and Mr. Briers hold 1,500,000
warrants for restricted common stock of which 700,000 were vested as of June 30,
2003. Thus, there are another 800,000 that vest, 400,000 in each of the next two
years  in  July  2003  and  July  2004.

Director  Compensation

There  were  no  options or other compensation granted by the board for services
rendered  during the fiscal year ended 2003. There have been no director meeting
expense  reimbursements  for  2003  and  2002.


Employment  contracts  and  termination  of  employment  and  change-in-control
arrangements

Other  than  Kent  Watts'  employment  contract,  as  disclosed in Note 1 to the
Summary  Compensation  Table,  there  are  no employment contracts nor are there
termination of employment and change-in-control agreements between Hyperdynamics
and  its  executive  officers.


Report  on  repricing  of  options/SARs

On  August  26,  2002,  the officer warrants previously issued to Kent Watts and
Harry  Briers  on July 25, 2001 were repriced from an exercise price of $.40 per
share to $.23 per share.  At that time there were 1,500,000 warrants outstanding
for  each  of  these  officers;  thus a total of 3,000,000 warrants owned by the
named  executive  officers  were  repriced.  The  warrants were repriced because
declining  prices  had  rendered them out-of-the money.  The new exercise price,
$.23,  was  85%  of  the  then-market  price,  $.27.


ITEM 11     Security Ownership of Certain Beneficial Owners and Management

The  following  table  sets  forth  certain information at October 3, 2003, with
respect to the beneficial ownership of shares of Common Stock by (1) each person
who  owns  beneficially  more than 5% of the outstanding shares of Common Stock,
(2)  each  of  our directors, (3) each of our executive officers, and (4) all of
our  executive  officers  and  directors  as  a  group.


                                       19
<PAGE>
<TABLE>
<CAPTION>
                              SHARES BENEFICIALLY OWNED
                              -------------------------

                                   Number      Percent
Name and Address of Beneficial
Owner
<S>                             <C>            <C>
Kent Watts                      23,860,729(1)     45.5%
9700 Bissonnet,
Suite 1700
Houston, Texas 77036

Robert J. Hill                  1,041,537 (2)      2.0%
9700 Bissonnet,
Suite 1700
Houston, Texas 77036

Harry James Briers              1,786,111 (3)      3.4%
9700 Bissonnet,
Suite 1700
Houston, Texas 77036

Lewis E. Ball                          8,000       0.0%
9700 Bissonnet
Suite 1700
Houston, Texas  77036

DJX Ltd.                        21,048,100(5)     40.0%
4438 West 10th Avenue
Vancouver, BC V6R4R8

All directors and executive       26,696,377      51.1%
officers as a group

<FN>
(1)  This  amount  includes  815,000  shares  held  in  certificates;  currently
exerciseable  warrants to purchase 1,100,000 shares at $.23; 697,629 shares that
would  be  issuable  if  a  convertible note payable for accrued salary had been
converted  at  October 3, 2003; and 21,048,100 shares deemed as indirectly owned
by  Kent  P.  Watts  based  on  his  relationship with DJX Ltd., whose shares he
presently  has  the  authority  to  vote  and  which  is half owned by his minor
children  (See  Note  4).


                                       20
<PAGE>
(2)  This  amount  includes  currently  exercisable warrants to purchase 700,000
shares  of  common stock of the company at $.23 and 341,537 shares that would be
issuable  if a convertible note payable for accrued salary had been converted at
October  3,  2003.

(3)  This  amount includes 15,350 shares of common stock; currently exerciseable
warrants  to purchase 1,100,000 shares at $.23; and 670,671 shares that would be
issuable  if a convertible note payable for accrued salary had been converted at
October  3,  2003.

(4)  On  May  31,  2001  a stock exchange agreement was completed to acquire SCS
Corporation  as  a  wholly  owned subsidiary. We issued 2,725 shares of Series B
Preferred  Stock  to  pay  for the acquisition. Each share of Series B Preferred
Stock  carries  a  $1,000  per  share  face  value and is convertible by written
request  into  common  stock  at  the  lesser  of $0.135 per share or 50% of the
closing bid price on conversion. On June 30, 2003 the closing bid price was $.80
per  share.  Thus if 100% of this series B Preferred was converted at the lesser
$.135  amount  per  share,  the  shares  common  stock  shares  issued  would be
20,185,185.  This  presentation  is prepared as if full conversion has occurred.
Additionally,  during the year ended June 30, 2003, Hyperdynamics issued 862,915
shares of common stock to DJX Ltd in payment of $172,583 of dividends.  DJX Ltd.
is  a foreign corporation whose shareholders are the grand children of Ernest M.
Watts, the father of Kent P. Watts, our Chairman, CEO, and President. Two of the
grand  children  are  the  minor children of Kent P. Watts. As of June 30, 2003,
voting  rights in DJX Ltd. stock were exercised by Ernest M. Watts, however Kent
Watts  currently  exercises  that  control.
</TABLE>


ITEM  12  Certain  Relationships  and  Related  Transactions

Our  Board  of  Directors  has  adopted a policy that all of our affairs will be
conducted by standards applicable to publicly-held corporations and that we will
not  enter into any transactions or loans between us and our officers, directors
and 5% shareholders, unless the terms are no less favorable than we could obtain
from  independent,  third  parties, and that these types of transactions must be
approved  by  our  disinterested  directors.

Michael  Watts,  the  brother of Kent Watts, the Chairman, President and CEO, is
our  consultant.  In  April  1999,  we  granted  Michael  Watts  350,000 options
exercisable  at  a  strike  price  of  $.50 per share that expire in March 2001,
pursuant  to  the  consulting  agreement.  On  January 10, 2001 a new consulting
agreement was signed with Michael Watts and he was paid a $75,000 retainer to be
applied  against  services  to  be  rendered.  On  July  25,  2001  the board of
directors  granted  Michael  Watts  125,000 options at a price of $.80 cents per
share as additional compensation for the consulting agreementOf all the 850,000
options Michael Watts has received for consulting compensation since April 1996,
he  has exercised 843,819 options as of September 25, 2002. On that date he held
6,181  options  exercisable at a strike price of $.50 per share.   These options
expired  March  31,  2003.

On  November  30, 2001, we contracted with GeoServ Marketing, a company owned by
Michael  Watts, brother of Kent Watts. Under the Agreement, GeoServ was hired to
help  implement  the  complete  business development plan for tape transcription
revenues  of SCS Corporation, our wholly owned subsidiary. The Contract provided
for  a fixed fee of $375,000, which was paid by the issuance of stock.  On March
1,  2002  the  Agreement  with  GeoServ  Marketing  was  amended to include work
associated  with  the  establishment  and  organization  and marketing of Guinea
Hydrocarbon  Resource  Corporation,  GHRC,  and  additional  specific  fees were
approved  in  the  amount  of $250,000. The $250,000 was paid by the issuance of
stock  pursuant  to  our  Stock  and  Stock  Option Plan.  We paid an additional
$67,500  attributable to work performed between April and June 30, 2002 with the
issuance  of  stock.  On  February  26,  2003  accrued  expenses  of  $82,500


                                       21
<PAGE>
through  December  31, 2002 were paid to Geoserv Marketing for services rendered
from  August  2002  through  December  31,  2002 and 305,556 shares were issued.

On  May  31,  2001, a Stock Exchange Agreement was executed by and among us, DJX
Ltd.,  a  Belize  corporation  ("DJX") being the sole stockholder of all capital
stock  of SCS Corporation, a Delaware corporation ("SCS") and J. Hamilton, being
a  control person of DJX and SCS.  DJX Ltd., a Belize company has now obtained a
controlling  interest  in  Hyperdynamics  through the receipt of 2,725 shares of
Series  B  Preferred  Stock.  Each  share  of  Series  B Preferred Stock has the
equivalent  voting  rights  of  7,408  shares  of common stock and the rights to
receive  notice  and vote on any matters that common stock shareholders can vote
on.  Additionally, during the year ended June 30, 2003, DJX Ltd received 862,915
shares  of  Hyperdynamics common stock in payment of dividends.  Thus, DJX, Ltd.
has  21,048,100  votes  with the total common stock outstanding June 30, 2003 of
27,631,573  shares. This was 44.3% of the outstanding voting rights. DJX Ltd. is
a  foreign  corporation with the shareholders being the grand children of Ernest
M.  Watts, the father of Kent P. Watts, the Chairman, CEO, and President for our
Company.  Two  of the grand children are the minor children of Kent P. Watts. As
of  fiscal year end June 30, 2003, Ernest M. Watts exercised their voting rights
in  DJX  Ltd.; however, currently Kent Watts controls their stock, as referenced
in  Item  11  above.


ITEM  13     Exhibits  and  Reports  on  Form  8-K

(A)          Exhibits

     Exhibit  31.1  -  Certification of Chief Executive Officer of HyperDynamics
Corporation  required  by  Rule  13a-14(1)  or  Rule 15d-14(a) of the Securities
Exchange  Act  of  1934,  as  adopted  pursuant  to  Section  302  of  the
Sarbanes-Oxley  Act  of  2002.

     Exhibit  31.2  -  Certification of Chief Financial Officer of HyperDynamics
Corporation  required  by  Rule  13a-14(1)  or  Rule 15d-14(a) of the Securities
Exchange  Act  of  1934,  as  adopted  pursuant  to  Section  302  of  the
Sarbanes-Oxley  Act  of  2002.

     Exhibit  32.1  -  Certification of Chief Executive Officer of HyperDynamics
Corporation  pursuant  to  Section  906  of  the  Sarbanes-Oxley Act of 2002 and
Section  1350  of  18  U.S.C.  63.

     Exhibit  32.2  -  Certification of Chief Financial Officer of HyperDynamics
Corporation  pursuant  to  Section  906  of  the  Sarbanes-Oxley Act of 2002 and
Section  1350  of  18  U.S.C.  63.

     (b)     REPORTS  ON  FORM  8-K

             None

Signatures

In  accordance with the requirements of Section 13 or 15(d) of the Exchange Act,
the  Registrant  has  caused  this  report  to  be  signed  on its behalf by the
undersigned,  thereunto  duly  authorized,  on  the  14th  day  of October 2003.

                                      HyperDynamics  Corporation

                                      By:  /s/  Kent  Watts
--------------------
                                      Kent Watts, Chairman of the Board,
                                      Chief Executive Officer, and Chief
                                      Financial Officer


                                       22
<PAGE>
Pursuant  to  the  requirements of the Exchange Act, this report has been signed
below  by  the  following  persons in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
Signature                         Title                   Date

<S>                    <C>                          <C>
/s/ Kent Watts         Chairman of the Board,       October 14, 2003
---------------------  Chief Executive Officer and
Kent Watts             Chief Financial Officer

/s/ Robert Hill        Director                     October 14, 2003
---------------------
Robert Hill

/s/ Harry J. Briers    Director                     October 14, 2003
---------------------
Harry J. Briers
</TABLE>


                                       23
<PAGE>
<TABLE>
<CAPTION>
                               HYPERDYNAMICS CORPORATION
                             Audited Financial Statements
                             Index To Financial Statements


<S>                                                                                   <C>
                                                                                      PAGE
Independent Auditor's Report                                                          F-2
Consolidated Balance Sheet as of June 30, 2003                                        F-3
Consolidated Statements of Operations for the years ended June 30, 2003 and 2002      F-4
Consolidated Statements of Changes in Stockholders' Equity
  for the years ended June 30, 2003 and 2002                                          F-5
Consolidated Statement of Cash Flows for the years ended June 30, 2003 and 2002       F-7
Notes to Financial Statements                                                         F-9
</TABLE>






<PAGE>
                          INDEPENDENT AUDITORS' REPORT


To  the  Board  of  Directors  and  Stockholders
    HyperDynamics  Corporation
    Houston,  Texas

We have audited the accompanying consolidated balance sheet of HyperDynamics
Corporation and subsidiaries as of June 30, 2003, and the related consolidated
statements of income, stockholders' deficit, and cash flows for each of the two
years then ended. These financial statements are the responsibility of
HyperDynamics' management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free from material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of HyperDynamics
Corporation as of June 30, 2003, and the results of its operations and its cash
flows for each of the two years then ended, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that HyperDynamics will continue as a going concern. As discussed in Note 2 to
the consolidated financial statements, HyperDynamics has suffered recurring
losses from operations which raises substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters also are
described in Note 2. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


MALONE  AND  BAILEY,  PLLC
www.malone-bailey.com
Houston,  Texas

September  2,  2003,  except  note  18
which  is  dated  October  10,  2003


                                       F-2
<PAGE>
<TABLE>
<CAPTION>
                            HYPERDYNAMICS CORPORATION
                           CONSOLIDATED BALANCE SHEET
                                  June 30, 2003


<S>                                                       <C>
ASSETS
Current Assets
  Cash                                                    $    176,017
  Restricted certificate of deposit                             85,251
  Accounts receivable, net of allowance for
    doubtful accounts of $16,670                                 7,356
  Inventory                                                      5,993
  Other current assets                                             401
                                                          -------------
    Total Current Assets                                       275,018

Property and equipment, net of accumulated
  depreciation of $155,325                                      88,672
Other Assets
  Unproved Oil and Gas Properties, using Full Cost
   Method of Accounting                                        896,837
  Restricted certificate of deposit                            196,335
  Deposits                                                      23,432
                                                          -------------
      TOTAL ASSETS                                        $  1,480,294
                                                          =============

      LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
  Current portion of capital leases                       $     19,157
  Accounts payable and accrued expenses                        539,323
  Accounts payable seismic data                                650,000
  Customer deposits                                              3,448
  Dividends payable                                            275,174
  Dividends payable to related party                            54,500
                                                          -------------
    Total Current Liabilities                                1,541,602

Long-term portion of capital leases                             32,800
Convertible notes payable to officers, net of
  $224,944 unamortized discount                                 18,990
Deferred rent                                                  131,906
Mandatorily redeemable preferred stock                          72,097
                                                          -------------
      TOTAL LIABILITIES                                      1,797,395
                                                          -------------

Commitments and Contingencies

Stockholders' Deficit
  Convertible preferred stock, par value $.001;
    stated value $1,000; 20,000,000 authorized;
    Series A - 1,945 shares issued and outstanding                   2
    Series B - 2,725 shares issued and outstanding                   3
  Common Stock, par value $.001; 50,000,000 shares
    authorized; 27,631,507 shares issued and outstanding        27,632
  Additional paid in capital                                12,176,871
  Accumulated deficit                                      (12,521,609)
                                                          -------------
    Total Stockholders' Deficit                               (317,101)
                                                          -------------
      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT         $  1,480,294
                                                          =============
</TABLE>


                 See accompanying summary of accounting policies
                       and notes to financial statements.
                                       F-3
<PAGE>
<TABLE>
<CAPTION>
                            HYPERDYNAMICS CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       Years Ended June 30, 2003 and 2002



                                                     2003          2002
                                                 ------------  ------------
<S>                                              <C>           <C>

Revenues                                         $   468,022   $   355,628
Cost of revenues                                     469,158       542,240
                                                 ------------  ------------
      GROSS DEFICIT                                   (1,136)     (186,612)
                                                 ------------  ------------
Operating Expenses
  Selling                                             38,745        74,034
  General and administration                       3,225,407     2,491,782
  Impairment                                         704,061
  Depreciation and amortization                      176,938       250,808
  (Gain) loss on retirement and sale of assets        (5,431)        9,523
                                                 ------------  ------------
    Total Operating Expenses                       4,139,720     2,826,147
                                                 ------------  ------------
      LOSS FROM OPERATIONS                        (4,140,856)   (3,012,759)
                                                 ------------  ------------
Other Income (Expense)
  Interest expense                                   (55,407)      (10,595)
  Interest income                                      6,139        18,083
                                                 ------------  ------------
    Total Other Income (Expense)                     (49,268)        7,488
                                                 ------------  ------------
      NET LOSS                                    (4,190,124)   (3,005,271)

      Preferred dividend requirement                (186,779)     (175,595)
                                                 ------------  ------------
NET LOSS CHARGEABLE TO COMMON SHAREHOLDERS       $(4,376,903)  $(3,180,866)
                                                 ============  ============


Basic and diluted loss per common share          $      (.19)  $      (.18)
Weighted average shares outstanding               22,580,526    17,426,561
</TABLE>


                 See accompanying summary of accounting policies
                       and notes to financial statements.
                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                            HYPERDYNAMICS CORPORATION
           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
                       Years Ended June 30, 2003 and 2002




                                         Preferred              Common
                                     Shares    Amount     Shares     Amount
                                    ---------  -------  ----------  --------
<S>                                 <C>        <C>      <C>         <C>
Balances, June 30, 2001                 4,670  $     5  14,371,945  $ 14,372

Common stock issued for:
  - cash                                                 1,349,170     1,349
  - exercise of options                                    445,250       445
  - services                                             2,894,301     2,894
  - contingent note payable                                700,000       700
  - accounts payable                                     1,273,125     1,274

Issuance of stock options
  and warrants

Preferred stock dividends

Net loss
                                    ---------  -------  ----------  --------
Balances, June 30, 2002                 4,670        5  21,033,791    21,034

Common stock issued for:
  - cash                                                 4,371,811     4,372
  - exercise of options                                    573,821       574
  - services                                               405,526       405
  - accounts payable                                       383,643       384

Issuance of stock options
  and warrants

Preferred stock dividends

Funds raised from sale of warrants
  to purchase Hyperdynamics
  Corporation stock in association
  with SCS Corp. units

Beneficial conversion feature
  associated with convertible
  notes payable to officers

Payment of preferred stock
  dividends in common shares                               862,915       863

Net loss
                                    ---------  -------  ----------  --------
Balances, June 30, 2003                 4,670  $     5  27,631,507  $ 27,632
                                    =========  =======  ==========  ========
</TABLE>


                 See accompanying summary of accounting policies
                       and notes to financial statements.
                                       F-5
<PAGE>
<TABLE>
<CAPTION>
                            HYPERDYNAMICS CORPORATION
           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
                       Years Ended June 30, 2003 and 2002
                                   (Continued)



                                    Additional
                                      Paid in     Accumulated
                                      Capital       Deficit        Totals
                                    -----------  -------------  ------------
<S>                                 <C>          <C>            <C>

Balances, June 30, 2001             $ 5,034,200  $ (4,963,840)  $    84,737

Common stock issued for:
  - cash                                477,151                     478,500
  - exercise of options                 211,855                     212,300
  - services                          1,389,606                   1,392,500
  - contingent note payable             349,300                     350,000
  - accounts payable                    971,141                     972,415

Issuance of stock options
  and warrants                           57,802                      57,802

Preferred stock dividends                            (175,595)     (175,595)

Net loss                                           (3,005,271)   (3,005,271)
                                                 -------------  ------------
Balances, June 30, 2002               8,491,055    (8,144,706)      367,388

Common stock issued for:
  - cash                                668,628                     673,000
  - exercise of options                 116,065                     116,639
  - services                            112,216                     112,621
  - accounts payable                    105,336                     105,720

Issuance of stock options
  and warrants                        2,232,014                   2,232,014

Preferred stock dividends                            (186,779)     (186,779)

Funds raised from sale of warrants
  to purchase Hyperdynamics
  Corporation stock in association
  with SCS Corp. units                   35,903                      35,903

Beneficial conversion feature
  associated with convertible
  notes payable to officers             243,934                     243,934

Payment of preferred stock
  dividends in common shares            171,720                     172,583

Net loss                                           (4,190,124)   (4,190,124)
                                                 -------------  ------------
Balances, June 30, 2003             $12,176,871  $(12,521,609)  $  (317,101)
                                    ===========  =============  ============
</TABLE>


                 See accompanying summary of accounting policies
                       and notes to financial statements.
                                       F-6
<PAGE>
<TABLE>
<CAPTION>
                            HYPERDYNAMICS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       Years Ended June 30, 2003 and 2002



                                                         2003          2002
                                                     ------------  ------------
<S>                                                  <C>           <C>

CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                           $(4,190,124)  $(3,005,271)
Adjustments to reconcile net loss to cash
  used in operating activities:
    Depreciation and amortization                        176,938       250,808
    Stock issued for services                            112,621     1,392,500
    Options and warrants issued                        2,232,014        57,802
    Beneficial conversion feature associated
      with convertible notes payable to officers          18,990
    (Gain)/loss on disposition of assets                  (5,431)        9,523
    Impairment                                           704,061
    Bad debt expense                                      11,671
  Changes in assets and liabilities
    Accounts receivable                                    8,765         2,896
    Inventory                                              1,034        39,151
    Other current assets                                   5,324        16,752
    Accounts payable and accrued expenses                345,050       196,571
    Accrued officer salaries                             110,330       159,353
    Customer deposits                                    (36,878)       40,325
    Change in deferred rent                                9,576        17,768
                                                     ------------  ------------
NET CASH USED IN OPERATING ACTIVITIES                   (496,059)     (821,822)
                                                     ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment                    (35,932)      (26,018)
  Decrease in restricted cash                             82,724        71,990
  Proceeds from sale of assets                            39,356         2,871
  Investment in unproved property                       (321,233)
                                                     ------------  ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES     (235,085)       48,843
                                                     ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from sale of common stock                     673,000       478,500
  Proceeds from exercise of options and warrants         116,639       212,300
  Proceeds from sale of units consisting of
   warrants in Hyperdynamics and preferred
   stock in subsidiary, net of $12,000
   offering cost                                         108,000
  Change in stock subscription receivable                               95,000
  Payments on installment debt                           (19,493)      (18,071)
                                                     ------------  ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                878,146       767,729
                                                     ------------  ------------

Net Change In Cash                                       147,002        (5,250)
  CASH AT BEGINNING OF PERIOD                             29,015        34,265
                                                     ------------  ------------
  CASH AT END OF PERIOD                              $   176,017   $    29,015
                                                     ============  ============
</TABLE>


                 See accompanying summary of accounting policies
                       and notes to financial statements.
                                       F-7
<PAGE>
<TABLE>
<CAPTION>
                            HYPERDYNAMICS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       Years Ended June 30, 2003 and 2002



                                                    2003      2002
                                                  --------  --------
<S>                                               <C>       <C>
SUPPLEMENTAL DISCLOSURES
  Interest paid in cash                           $ 21,107  $  9,801

NON-CASH TRANSACTIONS
  Issuance of common stock to reduce contingent
    liability related to the purchase of assets
    of Seacon Computer Systems, Inc.                        $350,000
  Issuance of common stock for accounts payable   $105,720   972,415
  Payment of preferred stock dividends in
    common shares                                  172,583
  Conversion of accrued officer salary to
    convertible notes payable to officers net of
    amortized discount                             224,944
</TABLE>


                 See accompanying summary of accounting policies
                       and notes to financial statements.
                                       F-8
<PAGE>
                            HYPERDYNAMICS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1  -  SIGNIFICANT  ACCOUNTING  POLICIES

Nature of business. HyperDynamics Corporation is a Delaware corporation formed
in March 1996. HyperDynamics utilizes its integrated technology infrastructure
to provide support to its wholly-owned subsidiary, SCS Corporation. Through SCS,
HyperDynamics focuses on oil and gas company services, such as seismic data
management, and derives a significant portion of its revenue from the conversion
of seismic data from tape media to modern media, such as DVD computer
technology. SCS also began operations in oil and gas exploration, seismic data
acquisition, processing, and interpretation in late fiscal 2002.

The fiscal year-end is June 30.

Basis of presentation. The consolidated financial statements include the
accounts of HyperDynamics and its wholly-owned subsidiary, SCS Corporation.
Significant inter-company accounts and transactions have been eliminated.

Reclassifications. Certain amounts in the 2002 financial statements have been
reclassified to conform with the 2003 financial statement presentation.

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

Cash and cash equivalents include all highly liquid investments purchased with
original maturities of three months or less. Restricted cash is a certificate of
deposit at a bank to back a letter of credit supporting the construction and the
lease commitment for HyperDynamics' new facility. The CD matures on May 9, 2004
and accrues interest at 1% annually. HyperDynamics plans to renew it each year
for the next 2 years and the amount will be reduced to coincide with the Letter
of Credit in favor of HyperDynamics' Landlord. The restriction on the CD
established as security for the Letter of Credit is removed over the next 3
years of the lease. The remaining $281,586 Letter of Credit may be converted to
operating cash according to the following schedule: $87,260 in each of the next
two years on November 1 in 2003 and 2004 and $109,075 on November 1, 2005.

Revenue recognition. Revenue from tape conversions, consulting, and information
technology services is recognized when services are rendered. While contracts to
perform such services might last multiple years, provisions allow for periodic
billing based on what services have been performed during each period. Revenue
from hardware and software sales is recognized when goods are shipped.

Accounts receivable are written down to reflect management's best estimate based
upon known specific analysis, historical experience, and other currently
available evidence of the net collectible amount.


                                      F-9
<PAGE>
Inventory consists of computer hardware, software, and tape media and is stated
at the lower of cost or market using the first-in first-out basis (FIFO).

Long-lived Assets. Property and equipment are stated on the basis of historical
cost less accumulated depreciation. Depreciation is provided using the
straight-line method over the estimated useful lives of the assets of 3 - 5
years.

The Company follows Statement of Financial Accounting Standards No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, by reviewing
such assets for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Impairment loss
recognized is the excess of the carrying amount over the fair value of the
asset. Hyperdynamics has recognized an impairment loss of $354,061 on the
leasehold improvements constructed in December 2000 (Note 4).

Goodwill was recorded when additional shares were issued in fiscal year 2002,
modifying the prior year's purchase price for SCS. HyperDynamics adopted SFAS
142 in 2002 and does not amortize goodwill. Hyperdynamics has determined that
there is a goodwill impairment of $350,000 in the current year.

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
<S>                               <C>
Accounts payable                  $480,574
Accrued payroll and payroll tax     20,642
Other taxes payable                 13,362
Accrued warranty                     7,269
Current portion of deferred rent    17,476
                                  --------
                                  $539,323
                                  ========
</TABLE>

Deferred rent represents the difference between the rent expense per month as
calculated based on the total contractual payments specified over the 10-year
period of the lease and the actual monthly rent paid. It arises because the
initial 6 months of the lease were free. The deferral will reverse beginning in
the year ended June 30, 2005.

Income taxes are computed using the tax liability method of accounting, whereby
deferred income taxes are determined based on differences between financial
reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates that will be in effect when the differences reverse.

HyperDynamics accounts for stock options issued to employees under the
recognition and measurement principles of APB Opinion No. 25, Accounting for
Stock Issued to Employees, and related Interpretations. Under this method, no
compensation expense is recognized for stock options granted when the number of
underlying shares is known and exercise price of the option is greater than or
equal to the fair market value of the stock on the date of grant. However,
certain option awards are considered variable awards and the additional
intrinsic value, as specified by FIN 44 and as measured by the difference
between the market price of the underlying stock at the balance sheet date and
the exercise price of the options, are recorded in net income as compensation
expense. Fair value is computed and expensed for options and warrants issued to
non-employees as compensation. Note 16 discusses stock compensation in more
detail. The following table illustrates the effect on


                                      F-10
<PAGE>
net income and earnings per share if the company had applied the fair value
recognition provisions of FASB Statement No. 123, Accounting for Stock-Based
Compensation, to stock-based employee compensation.

<TABLE>
<CAPTION>
                                      Year Ended     June 30,
                                         2003          2002
                                     ------------  ------------
<S>                                  <C>           <C>
Net loss chargeable to common
  stockholders, as reported          $(4,376,903)  $(3,180,866)
Add: intrinsic value of employee
  options included in net loss
  chargeable to common stockholders    2,147,000
Deduct: Total stock-based employee
  compensation expense determined
  under fair value based method for
  all awards, net of related tax
  effects                             (   59,318)     (378,472)
                                     ------------  ------------
Pro forma net loss                   $(2,289,221)  $(3,559,338)
                                     ============  ============

Loss per share, basic and diluted:
  As reported                        $(      .19)  $(      .18)
                                     ============  ============
  Pro forma                          $(      .10)  $(      .20)
                                     ============  ============
</TABLE>



The basic net loss per common share is computed by dividing the net loss
chargeable to common stockholders by the weighted average number of common
shares outstanding.

Diluted net loss per common share is computed by dividing the net loss
applicable to common stockholders, adjusted on an "as if converted" basis, by
the weighted average number of common shares outstanding plus potential dilutive
securities. For the years ended June 30, 2003 and 2002, potential dilutive
securities had an anti-dilutive effect and were not included in the calculation
of diluted net loss per common share.

Recently issued accounting pronouncements. HyperDynamics does not expect the
adoption of recently issued accounting pronouncements to have a significant
impact on HyperDynamics' results of operations, financial position or cash flow.


NOTE  2  -  GOING  CONCERN

As shown in the accompanying financial statements, HyperDynamics has incurred
recurring net losses chargeable to common shareholders of $4,376,903 and
$3,180,866 in 2003 and 2002, respectively, and has an accumulated deficit of
$12,521,609 as of June 30, 2003. These conditions create an uncertainty as to
HyperDynamics' ability to continue as a going concern. Management is trying to
raise additional capital through sales of units consisting of SCS Corporation
preferred stock and Hyperdynamics Corporation warrants as well as seeking
financing from third parties. The financial statements do not include any
adjustments that might be necessary if Hyperdynamics is unable to continue as a
going concern.


                                      F-11
<PAGE>
NOTE  3  -  GOODWILL

On April 23, 2002, HyperDynamics issued 700,000 shares of its common stock
valued at $350,000 to Seacon Computer Systems, Inc., the former owners of the
assets of SCS, as a partial payment to substitute for $350,000 of the $700,000
contingent note payable pursuant to the acquisition of SCS. Originally,
HyperDynamics owed quarterly payments of 25% in cash and another 25% in common
stock of SCS's profits. Seacon accepted the 700,000 shares as a single
settlement of all future possible cash portions of the note. Therefore, the
quarterly payment in the future will be only 25% of SCS's profit, if any, for
each quarter, paid in stock. As yet, SCS has not recorded any profits. The
700,000 shares were recorded as an adjustment to the purchase price of SCS as
goodwill on the purchase of SCS. Any additional payments will also be recorded
as additions to goodwill. Goodwill is tested for impairment as outlined in SFAS
142. There was no impairment during 2002. The goodwill was assigned to SCS
Corporation. At year-end 2003, Hyperdynamics management determined that an
impairment of goodwill existed because the fair value of the SCS reporting unit
was less than the carrying value of the reporting unit. The difference between
the fair value and the carrying value, $350,000, was recorded as an impairment
expense as of June 30, 2003.


NOTE  4  -  PROPERTY  AND  EQUIPMENT

A  summary  of  property  and  equipment  is  as  follows:

<TABLE>
<CAPTION>
<S>                                                         <C>
          Computer equipment and software       3 years     $ 230,105
          Office equipment and furniture        5 years        13,892
                                                            ----------
              Total cost                                      243,997
          Less:  accumulated depreciation and amortization   (155,325)
                                                            ----------
              Net carrying value                            $  88,672
                                                            ==========
</TABLE>

Hyperdynamics reviews assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Hyperdynamics had planned to place its ITSP (Integrated Technology
Service Provider) business on hold and replace it with tape transcription
business. Although transcription sales were good during fiscal 2002, the lack of
a backlog of transcription business as of June 30, 2003 continuing through the
report date, September 2, 2003, has called the fair value of the leasehold
improvements into question. Impairment loss recognized is the excess of the
carrying amount over the fair value of the asset, or $354,061.


NOTE  5  -  UNPROVED  OIL  AND  GAS  PROPERTIES

On November 8, 2002, SCS Corporation (SCS), HyperDynamics' wholly-owned
subsidiary, agreed to modify their previous joint venture arrangement with US
Oil Corporation (US Oil) in Guinea Hydrocarbon Resource Corporation (GHRC).

In the new arrangement, SCS purchased US Oil's interest in GHRC and all of its
claims to a 65,000 square kilometer offshore oil and gas lease on the coast of
the Republic of Guinea (Guinea) in Africa for $40,000. SCS assumed US Oil's
obligations to Guinea as described in the Production Sharing Agreement (PSA)
signed with Guinea and effective December 2, 2002.


                                      F-12
<PAGE>
Under  this  PSA,  SCS  has  the  following  financial  obligations:

a.   SCS must pay Guinea $250,000 by March 2, 2003, and additional royalty
     payments are due if oil and gas is found. The required payment to the
     Government of Guinea was made during June 2003.

b.   SCS must perform 3-D or 2-D seismic work for 4,000 kilometers, which could
     cost an estimated $6 million during the First Exploration Period which ends
     in December 2003. If SCS timely produces this data, it will fulfill its
     initial exploration phase obligation. SCS has contracted with a third party
     to perform 2-D seismic work at an estimated cost of $1,600,000.

c.   During the second exploration period, SCS is required to drill at least one
     exploratory well at an estimated cost of $10 million. The time frame SCS
     has to complete this is at least four years.

SCS must also pay US Oil up to $1,600,000 if SCS obtains at least $3 million in
financing for this Guinea development project from an oil company partner
participating in a working interest purchase or a 3rd party financing company,
and a 3% royalty if oil and gas is produced.

To date, $896,837 of capital costs has been incurred on this project.


NOTE  6  -  OIL  AND  GAS  ACCOUNTING  POLICIES

Property and equipment. Hyperdynamics follows the full cost accounting method to
account for the costs incurred in the acquisition, exploration, development and
production of oil and gas reserves. Under this method, all costs including
internal costs that are directly related to acquisition, exploration, and
development activities are capitalizable as oil and gas property costs.

Amortization of unproved property costs begins when the properties become proved
or their values become impaired. Hyperdynamics assesses the realizability of
unproved properties on at least an annual basis or when there has been an
indication that an impairment in value may have occurred. Impairment of unproved
properties is assessed based on management's intention with regard to future
exploration and development of individually significant properties and the
ability of Hyperdynamics to obtain funds to finance such exploration and
development. If the results of an assessment indicate that the properties are
impaired, the amount of the impairment is added to the capitalized costs to be
amortized.

Under full cost accounting rules for each cost center, capitalized costs of
proved properties, less accumulated amortization and related deferred income
taxes, shall not exceed an amount (the "cost ceiling") equal to the sum of (a)
the present value of future net cash flows from estimated production of proved
oil and gas reserves, based on current economic and operating conditions,
discounted at 10 percent, plus (b) the cost of properties not being amortized,
plus (c) the lower of cost or estimated fair value of any unproved properties
included in the costs being amortized, less (d) any income tax effects related
to differences between the book an tax basis of the properties involved. If
capitalized costs exceed this limit, the excess is charged as an impairment
expense.


                                      F-13
<PAGE>
Capitalized costs incurred in property acquisition, exploration and development
activities:

<TABLE>
<CAPTION>
                                               2003
                                             --------
<S>                                          <C>

          2-D Seismic work                   $550,000
          Payments to US Oil made under the
             farmout agreement                 40,000
          Geological consulting                25,603
          Permit fee paid to Guinea           250,452
          Seismic data processing              30,782
                                             --------
                                             $896,837
                                             ========
</TABLE>


NOTE  7  -  ACCOUNTS  PAYABLE  SEISMIC  DATA

In February 2003, SCS agreed to pay $650,000 to Offshore Seismic Surveys, Inc.
(OSS), an offshore seismic company, for OSS agreeing to release GHRC from the
$550,000 due to OSS for the Guinea seismic data. The additional $100,000 was
charged to expense in the quarter ending March 31, 2003. OSS maintains a lien on
the ownership and sale of the seismic data for the $650,000 less any payments
made on this amount. Any user license sales proceeds generated from user
licenses of the acquired data shall first go to payoff the $650,000 liability at
a rate of 90 percent of gross user license sales proceeds for OSS and 10 percent
for SCS until the $650,000 is paid in full. Any funding arrangement SCS enters
into with respect to the Guinea PSA, whereby all rights and obligations under
the PSA are transferred, shall cause the $650,000 to become immediately due upon
signing and funding of such agreement.


NOTE  8  -  CAPITAL  LEASES

HyperDynamics is obligated on three capital leases payable in monthly payments
totaling $2,352 including principal and interest ranging from 10 - 21 percent
APR, and secured by electrical equipment, a burglar alarm and a telephone
system. As of June 30, 2003, Hyperdynamics was in default on one of these
leases, and the accelerated lease payments, totaling $15,549, are included in
accounts payable at that date. The monthly payment on the other two leases is
$2,006 and principal maturities are $19,157 in fiscal 2004, $21,441 in 2005, and
$11,359 in 2006.


NOTE  9  -  LETTER  OF  CREDIT

HyperDynamics renewed its letter of credit for $283,595 with Frost Bank, which
now expires on October 31, 2003. The purpose of the letter of credit is to
guarantee the lease payments on HyperDynamics' office space. The letter of
credit is guaranteed by security interest in a certificate of deposit with Frost
Bank that may not be redeemed until the letter of credit expires. There were no
draws against this letter of credit as of June 30, 2003, nor as of September 2,
2003. The letter will be renewed and reduced to $196,335 in October 2003 in
accordance with our lease.


                                      F-14
<PAGE>
NOTE  10  -  CONVERTIBLE  NOTES  PAYABLE  TO  OFFICERS

On December 27, 2002, Hyperdynamics settled $189,895 of accrued salary payable
to officers by entering into convertible notes payable, due December 31, 2007,
with those officers. The $189,895 accrues interest at 12% per annum and the
principal and interest are convertible in blocks of $10,000 at the option of the
holder at a price of 60% of the lowest closing market price in the six months
predating the conversion date at any time prior to December 1, 2007.
Hyperdynamics may prepay the note in cash any time prior to the maturity date,
December 31, 2007. On the maturity date, Hyperdynamics may pay the note in cash
or in stock at a conversion rate of 50% of the lowest closing price during
thirty days preceding maturity. In addition to the $189,895, the resolution
authorizing the conversion requires all accrued salary be subject to the same
terms. As of June 30, 2003, a total of $243,934 had been converted. The discount
at the option of the holder created a beneficial conversion feature for each
note. This feature totaled the converted amount of $243,934. The notes are
discounted for $243,934 with the offset to additional paid in capital. The
discount is accreted over the term of the notes until maturity, payoff or
conversion and charged to interest expense. As of June 30, 2003, $18,990 had
been accreted and charged to interest expense leaving $224,944 unamortized.


NOTE  11  -  MANDATORILY  REDEEMABLE  PREFERRED  STOCK

As of June 30, 2003, 1.2 units consisting of 1-1/5 shares of SCS Corporations
(our wholly owned subsidiary) Series A Preferred Stock and warrants to purchase
60,000 shares of Hyperdynamics common stock at $.25 per share had been sold. The
portion of the proceeds of these units that is allocable to the SCS preferred
stock is $84,097 less $12,000 paid as a cost of offering leaving $72,097. The
$12,000 will be accreted until redemption.

The proceeds were allocated $35,903 to the warrants and $72,097 to the Preferred
Stock based on their relative fair market values. The warrants' fair market
value was estimated using the Black-Scholes option pricing model. Variables used
in the Black-Scholes option pricing model include (1) 3.0% risk-free interest
rate, (2) expected warrant life is five years, the actual remaining life of the
warrant, (3) expected volatility is the actual historical stock price
fluctuation volatility and (4) zero expected dividends. The fair market value of
the preferred stock was estimated as the discounted present value, using a
discount rate of 30%, of the amount redeemable at the option of the holder,
$150,000, on July 1, 2005, which is the first date that the preferred stock is
redeemable at the holder's option. Hyperdynamics will periodically increase the
carrying amount of the preferred stock such that the carrying value on June 30,
2005 will equal $150,000 per unit.

The preferred stock is redeemable at SCS's option in the amount of $125,000 per
share between July 1, 2004 and June 30, 2005. Additionally, in the event that
SCS Corporation issues common stock that is traded on a public market and the
SCS common stock trades at a price of at least $2 per share for ten consecutive
trading days on such market, each share of preferred stock will be automatically
and mandatorily converted to 100,000 shares of SCS Corporation common stock.


                                      F-15
<PAGE>
NOTE  12  -  INCOME  TAXES

Income taxes are not due since HyperDynamics has had losses since inception.
HyperDynamics has deductible net operating losses of approximately $1,850,000 in
fiscal 2003 and approximately $1,500,000 in fiscal 2002, which each can be
carried forward for 20 years.

<TABLE>
<CAPTION>
<S>                                  <C>
          Deferred tax assets        $ 1,689,000
          Less: valuation allowance   (1,689,000)
                                     ------------
          Net deferred taxes         $         0
                                     ============
</TABLE>

Internal Revenue Section 382 restricts the ability to use these carryforwards
whenever an ownership change as defined occurs. HyperDynamics incurred such an
ownership change on January 14, 1998 and again on June 30, 2001, As a result of
the first ownership change, HyperDynamics' use of net operating losses as of
January 14, 1998 of $949,000 are restricted to $151,000 per year. The
availability of losses from that date through June 30, 2001 of $3,313,000 since
that date is restricted to $784,000 per year. Losses in fiscal 2002, 2003 and
beyond are not restricted.


NOTE  13  -  COMMITMENTS  AND  CONTINGENCIES

HyperDynamics and its subsidiaries are involved in a number of routine business
disputes that have arisen in the ordinary course of business. HyperDynamics is
unable to predict the outcome of these matters, but does not believe that the
ultimate resolution of these matters will have a material adverse effect on the
financial statements of HyperDynamics. The amounts in dispute total
approximately $500,000, of which $140,000 is accrued and $360,000 is not
accrued. The disputed amounts include approximately $400,000, of which
approximately $80,000 is accrued, alleged by AT & T to be owed in its lawsuit
filed against Hyperdynamics during August 2003. Hyperdynamics' management
believes that AT & T has significantly overbilled and double billed charges,
failed to deliver promised services, and has damaged Hyperdynamics; thus,
Hyperdynamics will vigorously defend against this suit.

HyperDynamics leases its office space from AGP Westwood, LTD over a 10-year
period. The base monthly rent is $0 for months 1-6, $20,774 for months 7-54, and
$24,114 for months 55-120, beginning November 1, 2000. Additional common area
maintenance charges will be assessed. At June 30, 2003, future minimum payments
are $249,288 per year in fiscal year 2004, $252,328 in year 2005, $289,364 per
year in years 2006-2010, and 120,568 in 2011. Rent expense for the years ended
June 30, 2003 and 2002 totaled $268,040 and $286,701, respectively.
HyperDynamics has a termination option that may be exercised after 60 months of
the lease. If the termination option is exercised, HyperDynamics will be
released from the lease after 69 months.

Hyperdynamics' subsidiary, SCS Corporation, has $350,000 remaining of a
contingent note payable due to Seacon Computer Systems Inc., the former owners
of SCS Corporation's assets (Note 3).

In addition, HyperDynamics is involved in a dispute with its preferred
shareholders over conversion rights to common stock and whether monetary damages
are due for various claims against the preferred shareholders. The economic
effects of and the probable outcome of this contingency are not known.


                                      F-16
<PAGE>
NOTE  14  -  PREFERRED  STOCK

Series A Convertible Preferred Stock was issued in January 2000 for net proceeds
of $2,604,190. The stated value is $1,000 per share and par value is $.001. It
is convertible into HyperDynamics' common stock at a price of the lower of the
trading price when purchased at $5.25 or 80% of the current 5-day trading
average. All or any of the stock may be converted at any time at the holder's
option, and all shares outstanding as of January 30, 2002 were to be
automatically converted. This series is non-voting and pays dividends of 4%,
payable at conversion in either cash or shares of common stock, at
HyperDynamics' option. 1,055 shares were converted to common in 2000 and 2001.
HyperDynamics has not converted any of the Series A shares since fiscal 2001
because of claims filed in November 2001 in our lawsuit with the Series A
shareholders. Since the outcome is not known and no conversion has been
effected, HyperDynamics is continuing to accrue the dividend.

As of June 30, 2001, $130,798 in dividends were accrued. 2002 dividends of
$66,597 and 2003 dividends of $77,779 have been accrued, resulting in total
accrued Series A dividends of $275,174.

2,725 shares of Series B Convertible Preferred Stock were issued for the
acquisition of SCS Corporation on May 31, 2001. The stated value is $1,000 per
share and the par value is $.001. Each Series B share may vote 7,408 common
shares for a total of 20,186,800 votes. The shares are convertible to common
stock at the lesser of $.135 or 50% of the current 5-day average trading price.
Series B stockholders are entitled to a 4% cumulative dividend on the stated
value, which is payable only upon conversion of the preferred stock. Dividends
may be paid in stock or cash at HyperDynamics' option. Dividends accrued on the
Series B as of June 30, 2002 were $118,083. In 2003 dividends of $109,000 were
accrued and $172,583 were paid in common stock, resulting in accrued dividends
as of June 30, 2003 of $54,500. Accrued dividends on Series A and Series B stock
as of June 30, 2003 totaled $329,674.
If all Preferred Series A and B shares were converted as of June 30, 2003, total
common shares outstanding would be approximately 51,690,000 shares.


NOTE  15  -  COMMON  STOCK

During the year ended June 30, 2003, 573,821 options were exercised for
$116,639. 383,643 shares were issued in payment of accounts payable of $105,720.
405,526 shares valued at $112,621 were issued to consultants for services in
fiscal 2003. 862,915 shares were issued to pay $172,583 in Preferred Series B
dividends. 4,371,811 shares were issued for $673,000 pursuant to private
subscription agreements.


NOTE  16  -  STOCK  OPTIONS  AND  WARRANTS

HyperDynamics' Stock Option Plan provides for the grant of non-qualified options
to directors, employees and consultants, and opportunities for directors,
officers, employees and consultants to make purchases of stock in HyperDynamics.
In addition, HyperDynamics issues stock warrants from time to time to employees,
consultants, stockholders and creditors as additional financial incentives. The
plans and warrant issuances are administered by the Board of Directors, who have
substantial discretion to determine which persons, amounts, time, price,
exercise terms, and restrictions, if any. Options differ from warrants in that
the options awards are immediately


                                      F-17
<PAGE>
exercisable and are assignable. In contrast, warrants have employment
termination restrictions, vesting periods and are non-transferable.

HyperDynamics uses the intrinsic value method of calculating compensation
expense for employees. During 2002, no compensation expense was recognized for
the issuance of options and warrants issued to employees, because no option
prices were below market prices at the date of grant. 1,500,000 warrants issued
to officers, originally exercisable at $.40 per share but repriced to $.23 per
share in August 2002, required variable accounting as described in FIN 44 and
FIN 28.

During 2003 and 2002, HyperDynamics issued 150,000 $.50 warrants and 421,181
options to consultants whose stock-based compensation is recorded at fair value.
The compensation cost recorded for these options and warrants was $85,014 and
$57,802 based on the Black-Scholes option pricing model.

The weighted average fair value of the stock options granted during 2003 and
2002 was $.32 and $.35, respectively. Variables used in the Black-Scholes
option-pricing model include (1) risk-free interest rates ranging from 1.5% to
5%, depending on the grant dates and the expected lives of the options, (2)
expected option life is the actual remaining life of the options as of the grant
date, (3) expected volatility is the actual historical stock price fluctuation
volatility and (4) zero expected dividends.

Summary information regarding options and warrants is as follows:

<TABLE>
<CAPTION>
                                         Weighted                Weighted
                                          Average                 Average
                                           Share                   Share
                               Options     Price     Warrants      Price
                              ---------  ---------  -----------  ---------
<S>                           <C>        <C>        <C>          <C>
Year ended June 30, 2002:
  Outstanding, 2001            506,136   $     .76   7,847,500   $    1.01

  Granted                      158,636         .76     350,000         .93
  Exercised                   (350,000)        .61    (300,000)        .40
  Expired                     (150,136)       1.10    (425,000)        .91
  Forfeited                                         (1,200,000)        .40
                              ---------  ---------  -----------  ---------
Outstanding, year ended
  June 30, 2002                164,636        1.15   6,272,500        1.16

Year ended June 30, 2003:
  Granted                                            5,906,463         .24
  Exercised                                           (573,821)        .20
  Expired unused              (164,636)       1.15    (525,000)       1.21
  Cancelled due to repricing                        (5,585,142)        .48
  Forfeited                                           (870,000)        .28
                              ---------  ---------  -----------  ---------
Outstanding, year ended
  June 30, 2003                      0   N/A         4,625,000   $    1.08
                              =========  =========  ===========  =========
</TABLE>


                                      F-18
<PAGE>
     Warrants outstanding and exercisable as of June 30, 2003:


<TABLE>
<CAPTION>
                  - - Outstanding - -   Exercisable
                  No. of    Remaining    Number of
Exercise Price    Shares       life       Shares
                 ---------  ----------  -----------
<S>              <C>        <C>         <C>
       .23        900,000      1 years      900,000
       .23       1,200,000     2 years    1,200,000
       .23         800,000     3 years
       .23         800,000     4 years
       .25          60,000     5 years       60,000
       .28          10,000     3 years       10,000
       .50         150,000     2 years      150,000
      1.50          75,000     1 years       75,000
      1.50          30,000     1 years       30,000
      5.91         300,000     4 years      300,000
      7.09         300,000     4 years      300,000
                 ---------              -----------
                 4,625,000                3,025,000
                 =========              ===========
</TABLE>


NOTE  17  -  RELATED  PARTY  TRANSACTIONS

Related party transactions include payments to the CEO's brother for consulting
services as follows: issuance of 305,556 shares of stock valued at $82,500 and
payment to DJX, Inc., a affiliated company of 862,915 shares of common stock for
accrued dividends on Series B Preferred stock of $172,583.


NOTE  18  -  SUBSEQUENT  EVENTS

As of October 10, 2003, an additional 1.45 units of mandatorily redeemable
preferred stock sold for proceeds of $145,000. Additionally, we raised $540,000
by selling 845,454 shares of Hyperdynamics common stock.


                                      F-19
<PAGE>