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

                                   FORM 10-QSB

[X]     Quarterly  report  pursuant  to  Section  13  or 15(d) of the Securities
        Exchange  Act of 1934 For the quarterly period ended:  March 31, 2001
                                       or

[ ]     Transition  report  pursuant  to  Section 13 or 15(d) of the  Securities
        Exchange  Act  of  1934
        For the transition period from _______ to _______

                       Commission file number:   000-25496

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

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

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

                    Registrant's Telephone No. (713) 353-9400

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  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  [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

As  of  May  11,  2001  13,966,982  of  common  stock,  $0.001  par  value, were
outstanding.

Transitional  Small Business Disclosure Format (check one):  Yes [ ]     No [X]


<PAGE>
                            HYPERDYNAMICS CORPORATION

                                Table of Contents
                                -----------------

Part  I  Financial  Information

Item  1.     Financial  Statements

             Consolidated  Balance Sheet at March 31, 2001 (unaudited)

             Consolidated  Statements  of Income for the nine months ended March
             31,  2001  and  2000  (both  unaudited)

             Consolidated  Statements  of  Cash  Flows for the nine months ended
             March  31,  2001  and  2000  (both  unaudited)

             Notes  to  Consolidated  Financial  Statements

Item 2.      Management's Discussion and Analysis of Financial Condition and
             Results  of  Operations


Part  II     Other  Information

Item  1.     Legal  Proceedings

Item  2.     Changes  in  Securities

Item  6.     Exhibits  and  Reports  on  Form  8-K

             (a)    Exhibits

             (b)    Reports  on  Form  8-K

Signatures


                                        2
<PAGE>
<TABLE>
<CAPTION>
                       PART  1     FINANCIAL  INFORMATION

ITEM  1.    Financial  Statements

                            HYPERDYNAMICS CORPORATION
                                AND SUBSIDIARIES
                           Consolidated Balance Sheet
                                 March 31, 2001

<S>                                             <C>
ASSETS
Current Assets
  Cash                                          $         262,314
  Certificate of deposit, restricted                       65,445
  Accounts receivable, net of allowance for
           doubtful accounts of $18,068                    70,002
  Inventory                                               193,795
  Revenue interest                                          2,631
  Prepaid services to related party                        50,000
  Other current assets                                     78,913
                                                ------------------
                        Total Current Assets              723,100

Property and Equipment, net of                            791,190
           depreciation of $55,920
  Other Assets
  Certificate of deposit, restricted                      370,855
  Intangible assets - net                                  22,100
  Deposits                                                 22,432
                                                ------------------
  Total other assets                                      416,387
                                                ------------------
  Total Assets                                  $       1,930,677
                                                ==================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Accounts payable - trade                      $         363,982
  Current portion of installment debt                      16,676
  Accrued expenses                                         22,168
  Dividends payable                                       104,892
                                                ------------------
                      Total Current Liabilities           507,718

Long Term Debt                                             84,591

Stockholders' Equity
  Preferred stock, par value $0.001;
  20,000,000 shares authorized; 1,948 shares
  issued and outstanding.                                       2
  Common stock, par value $0.001;
  50,000,000 shares authorized; 13,943,643
  shares issued and outstanding.                           13,944
  Additional paid-in capital                            4,655,388
  Stock subscription receivable                            (5,000)
  Retained (deficit)                                   (3,325,966)
                                                ------------------
                    Total Stockholders' Equity          1,338,368
                                                ------------------
  Total Liabilities and Stockholders Equity     $       1,930,677
                                                ==================
</TABLE>

                       See notes to financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                     HYPERDYNAMICS CORPORATION
                                          AND SUBSIDIARIES
                                   Consolidated Income Statements
                        3 Months and 9 Months Ended March 31, 2001 and 2000

                                                3 MONTHS ENDED MARCH 31    9 MONTHS ENDED MARCH 31

                                                 2001          2000          2001          2000
<S>                                          <C>           <C>           <C>           <C>
Revenues                                     $    98,597   $   486,014   $   382,432   $ 1,427,064
Cost of Revenues                                 162,225       545,199       716,455     1,203,726
                                             ------------  ------------  ------------  ------------
                              Gross Margin       (63,628)      (59,185)     (334,023)      223,338
Operating Expenses
  Selling                                         50,622        43,919       119,450       104,113
  General and Administrative                     205,255       345,799       743,576       450,244
  Depreciation                                    17,034        12,250        44,290        24,750
                                             ------------  ------------  ------------  ------------
                  Total Operating Expenses       272,911       401,968       907,316       579,107
                                             ------------  ------------  ------------  ------------
                   Operating Income/(Loss)      (336,539)     (461,153)   (1,241,339)     (355,769)
Other Income (Expense)
  Loss on disposal of equipment                   (4,539)                     (4,539)
  Revenue sharing income                                        18,161                      18,161
  Gain on sale of revenue interest                              12,000         3,500        12,000
  Interest (expense)                              (2,799)                     (3,491)
  Writedown of carrying value of
  receivable
  from sale of subsidiary                                      (50,000)                    (50,000)
  Interest income                                 16,534        51,480        69,669        21,507
  Impairment loss                                 (4,677)                    (29,735)
  Other                                            6,704                       7,682
                                             ------------  ------------  ------------  ------------
           Loss From Continuing Operations      (325,316)     (459,512)   (1,198,253)     (354,101)
                                             ------------  ------------  ------------  ------------

        Loss from Discontinued Operations,
   net of income tax benefit of $0 and $0,
                              respectively                                                    (568)

   Gain on Sale of Discontinued Operations
   net of income tax benefit of $0 and $0,
                              respectively
                                                                                           127,065
                                             ------------  ------------  ------------  ------------
                                  Net Loss      (325,316)     (459,512)  $(1,198,253)     (227,604)
                                             ------------  ------------  ------------  ------------
                       Preferred dividends       (19,487)      (16,000)      (75,844)      (16,000)
              Net loss available to common
                              Shareholders   $  (344,803)  $  (475,512)  $(1,274,097)  $  (243,604)
                                             ============  ============  ============  ============

  Net Income/(Loss) per Common Share         $      (.02)  $      (.04)  $      (.09)  $      (.02)
Weighted average share outstanding            13,860,189    12,688,041    13,516,970    12,520,292
</TABLE>

                       See notes to financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                            HYPERDYNAMICS CORPORATION
                                AND SUBSIDIARIES
                      Consolidated Statement of Cash Flows
                     9 Months Ended March 31, 2001 and 2000


                                                                 2001           2000
<S>                                                        <C>               <C>
Cash flows from operating activities
  Net Loss                                                 $    (1,198,253)  $ (227,604)
Adjustments to reconcile net income to cash provided from
operating activities
  Depreciation and amortization                                     44,290       24,750
  Stock and warrants issued for services                           190,795
  Gain on sale of discontinued operations                                      (127,065)
  Gain on sale of revenue interest                                  (3,500)     (12,000)
  Loss from discontinued operations                                                 568
  Writedown of carrying value of receivable from sale of
     Subsidiary                                                                  50,000

  Loss on disposal of equipment                                      4,539
  Impairment loss                                                   29,735
  Writedown of capitalized intangible assets                                      4,757
Changes in:
    Accounts receivable - trade                                    467,189     (239,626)
                          Other                                                   1,500
    Inventory                                                       31,852      (65,968)
    Other current assets                                           (40,016)     (58,046)
    Collection of revenue interest                                                1,263
    Accounts payable                                              (112,520)      64,627
    Accrued expenses                                                80,184       90,121
                                                           ----------------  -----------
                 Net cash (used) by operating activities          (505,705)    (492,723)
Cash flows from investing activities
  Purchase of property and equipment                              (780,101)    (101,939)
  Increase in deposit                                               (2,800)
  Collection of note receivable                                    400,000
  Proceeds from sale of revenue interest                                         85,500
                                                           ----------------  -----------
         Net cash provided (used) for investing activities        (332,385)     (16,439)
Cash flows from financing activities
  Proceeds from new installment notes payable                      105,598
  Payments on installment notes payable                             (4,331)
  Sale of preferred stock                                                     2,604,190
  Sale of common stock, net of subscription receivable of
                         $5,000                                     18,819      228,500
Purchases of common stock                                           (2,601)
                                                           ----------------  -----------
Net cash provided from financing activities                        117,485    2,832,690
                                                           ----------------  -----------
Net increase (decrease) in cash                                   (771,121)   2,323,528
Cash at beginning of period                                      1,033,435       56,200
                                                           ----------------  -----------
Cash and cash equivalents at end of period                 $       262,314    2,379,728
Supplemental Information
Interest paid                                              $         3,491            0
</TABLE>

                       See notes to financial statements.


                                        5
<PAGE>
                            HYPERDYNAMICS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   The  unaudited condensed consolidated financial statements of Hyperdynamics
     Corporation  have  been  prepared  in  accordance  with  generally accepted
     accounting  principles  and  the  rules  of  the  Securities  and  Exchange
     Commission  ("SEC")  and  should  be  read  in conjunction with the audited
     financial  statements  and  the  notes  thereto  contained in the Company's
     latest  Annual  Report filed with the SEC on Form 10-KSB. In the opinion of
     management,  all  adjustments,  consisting of normal recurring adjustments,
     necessary  for  a fair financial presentation of financial position and the
     results  of  operations for the interim periods have been reflected herein.
     The  results  of  operations  for  interim  periods  are  not  necessarily
     indicative  of  the  results to be expected for the full year. Notes to the
     financial  statements  which  would  substantially duplicate the disclosure
     contained  in  the  audited financial statements for the most recent fiscal
     year  2000  as  reported  in  the  Form  10-KSB  have  been  omitted.

2.   Common  Stock.  During the nine months ended March 31, 2001, 47,638 options
     for free trading shares were exercised for $23,819 and 50,000 warrants were
     issued  to former consultants of the Company. The warrants were immediately
     exercised  as  a  cashless exercise, resulting in 37,500 shares issued. The
     warrants  were  issued  at  $.75  at  a  time  when the market value of the
     Company's  stock  was  $2.875; accordingly, compensation expense of $96,375
     has  been  recorded.  Additionally,  123,538  shares valued at $93,912 were
     issued  to  employees,  to  a  consultant,  and  as  payment to vendors for
     construction  of  the  Information  Technology  Center.

3.   Preferred  Stock.  During  the nine months ended March 31, 2001, $1,052,219
     worth  or  1,052 shares of Series A Preferred Stock was converted at 80% of
     the  previous  5  day  average  trading  days upon the conversion date. The
     Company  issued  697,639  shares  upon  these conversions and an additional
     18,008  shares  to  pay for accrued dividends on converted preferred stock.

4.   Impairment  loss is recognized on the amounts due from the gain on the sale
     of  Sierra  Net  that  had  been effected in the fiscal year ended June 30,
     2000. The impairment loss arises because the Company will be paid in 29,230
     shares  of  MAWI, the new parent company of Sierra Net, or in cash upon the
     exercise  of  a put option on behalf of the Company. MAWI has experienced a
     significant  decline  in  value  and is currently trading at close to $.09.
     Accordingly,  the  Company  has  written  down  the  value  of  the amounts
     receivable  from the sale of the revenue interest to $2,631, or the current
     value  of  the  shares  that  it  is  expected  to  receive.


                                        6
<PAGE>
Item 2.       Management's  Discussion  and  Analysis of Financial Condition and
              Results  of  Operations

FORWARD  LOOKING  STATEMENT  AND  INFORMATION

     The  Company  is  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, or on behalf of, the Company.  This quarterly report on form 10-QSB 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.  The  Company's  expectations,
beliefs  and  projections  are  expressed  in good faith and are believed by the
Company  to have a reasonable basis, including without limitations, management's
examination  of  historical  operating  trends,  data contained in the Company's
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 matters discussed
elsewhere  herein,  the following are important factors that, in the view of the
Company, could cause actual results to differ materially from those discussed in
the forward-looking statements: the ability of the Company to respond to changes
in  the  information  system  environment,  competition,  the  availability  of
financing, and, if available, on terms and conditions acceptable to the Company,
and  the  availability  of  personnel  in  the  future.

General  Discussion

As  reported  in  last quarters 10QSB the Company had reported serious and undue
delays  in  the  completion  of its new Integrated Technology Center (the "ITC")
facility.  Operations were seriously slowed as a result of these delays and this
operational  slow  down has extended over into the quarter ended March 31, 2001.
The  Company  is  working hard to continue to develop and market its new bundled
HypersourceTM  services.  Again,  the  unreasonable  delays  and difficulties in
getting our primary data circuits installed have caused us to experience greater
losses  than  expected and an additional drain on cash. However, it is important
to  point  out  that  building  this facility, together with the flexibility and
engineering excellence and investment of an AT&T dedicated entrance facility has
positioned  the  Company  to provide the best and most cost effective integrated
technology  services  available.  This was a mandatory event in order to fulfill
our  mission  to  be the premier ITSP. It is important to note that we have also
accomplished  this  in the time frame necessary to be in position to capture our
share  of  what we expect to be the largest recurring revenue base in history of
IT services. This is a monumental accomplishment, especially given the resources
that  we have had to work with and knowing the investment made by Company's like
AT&T  right  in  the  corner  of  our  initial  data  center  space.

The  Company's  primary  focus  is  now  on continuing to develop its bundled IT
services while learning how to successfully and cost effectively market and sell
them.  Management is very confident that the operation can cash flow in a matter
of months and there are possibilities of contracts and deals it is pipeline that
can  accomplish  this  cash  flow milestone very quickly. Now that we have moved
into our new facility, with more to work with than ever before, management views
this  need to cash flow the operation as an essential and imperative focus.  Due
to the changes in the way that IT services are delivered now and the flux of the
IT  services  market  we  are in, we believe that it is reasonable to have a six
month plan to cash flow the operation. With the new facility we have the ability
to  offer  our  customers  either  the  new  way of obtaining services or we can


                                        7
<PAGE>
perform  services  in  the  older  integration mode. We can now give our clients
first  hand  education  as to the real options for IT hosting. By proceeding and
succeeding  on  a  ramp  up basis in which the Company will ultimately cash flow
itself,  we  will  then be able to concentrate on moving into a mode of positive
net  income  with  the  goal  to  never  turn  back.

In  the  current  quarter the Company is building more potential in its pipeline
and  its  recurring  revenue base is gradually increasing. The Company's current
sales  and  marketing  strategies  include  an  Agency program for IT consulting
companies  and  partners  that  wish  to  leverage  off  or  our data center and
telecommunications  infrastructure.




RESULTS  OF  OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 2001 COMPARED TO THE
NINE  MONTHS  ENDED  MARCH  31,  2000

     Sales  decreased  to  $  382,432  for the nine months ended March 31, 2001.
This  compared  to  $1,450,974  for  the  same  period in 2000.  The decrease in
revenue  is  a  result  of  the completion of large projects started in 1999 and
continuing  into  2000  and also due to significant business disruption and slow
down  during  our  transition to the new facility together with the undue delays
discussed  above.

     Cost  of  Revenues decreased only 29.47% to $716,455 compared to a decrease
of  73%  for  sales  to  $382,432  for the nine months ended March 31, 2001. The
reason that Cost of Revenues did not decrease proportionally due primarily to 1)
the  allocation  of  operational  salaries of $237,733 that have been charged to
cost  of  sales  in 2001 compared to$187,866 in 2000. These salaries are a fixed
component  that  has  been  added  to  Cost  of  Revenues during development and
preparation for the Company's new business model that it is just now starting to
ramp  up. Thus, even though the sales dramatically decreased, this fixed portion
related  to  operational  employee  salaries  actually  increased.  2) a $91,396
write-off  in  obsolete  inventory  and shrinkage; and 3) an additional contract
adjustment  of  $34,689 with Great Plains Software, our primary supplier for the
Mattress  Firm  project  completed  in  June of 2000. These amount to a total of
$363,818. Taking this amount into account the decrease of cost of revenues would
be  proportional  to  the  decrease  in  sales.

     Selling,  General and Administrative expenses increased to $ 863,026 in the
nine  months  ending March 31, 2001 as compared to $ 766,133 for the same period
in  2000.  The  increase  was primarily due to significant increases in employee
related  costs,  warrants issued to settle a dispute, theft loss due to forgery,
and  the  increased  rent  expense  attributable  to  our  new  IT  center.

     Our  net  loss  was  ($1,198,253) for the nine months ended March 31, 2001.
This  compares  to  a  loss  of  ($  227,604)  for  the same period in 2000.  As
discussed  above  the  negative results are due primarily to a sharp decrease in
revenues  as  a  result  of  the  company  not being able to immediately replace
revenues  it  obtained from a large project (the Mattress Firm) starting in 1999
and  finishing in early 2000. This loss is additionally attributable to our ramp
up  of  fixed  salaried operational employees in expectation of coming online at
least  three  months  sooner than we were able to.  These delays in building out
and  bringing  online  our new facility including our primary telecommunications
circuits  remain  under scrutiny by management for any possible concessions from
the  primary  vendors  responsible.


                                        8
<PAGE>
Liquidity  and  Capital  Resources

     Liquidity  and  access  to  capital resources for Hyperdynamics Corporation
ties  directly  to the health of our market for our common stock. Our market has
suffered  substantially  in  recent  months.

     There  is  no  question that general market conditions and specifically the
market  for  our  own common stock on the OTC/BB:HYPD has made it more difficult
for  the  Company to raise capital. The price of our stock and our average daily
volumes  are  down  considerably. We have experienced problems that appear to be
caused by some or all of our preferred stock Series A shareholders. This problem
is  discussed  in  Part  II,  Item  1.  Legal Proceedings section hereunder. The
Company  is evaluating in detail how these Preferred Shareholders appear to have
created  a  major  downward  pressure on our stock price and our market volumes.
Management  believes that this trend was established by them a year ago, greatly
exasperating  our  market problems to date. Thus, management believes its common
stock  to  be  significantly  under  valued  even  considering  its  significant
reduction  in  revenues.

     Any  capital  raised  now  will  probably  cause  a significant dilution of
current  common  stock  shareholders.  In recent months our largest shareholder,
Emerald  Bay  Interests LTD and related parties have decided they need to divest
their  investment  due  to other pressing business matters. The Company has been
working,  partly  through  a consulting agreement with Michael Watts, brother of
Kent  Watts, the Company's Chairman, CEO, and President to facilitate an orderly
buy-out  of this shareholder on a private basis. Success of this private buy-out
can  go a long way to eliminating a potentially large seller of our common stock
and  help  maintain  a reasonably tight float. Management believes this would be
healthy  for  our  market  and  good  for  all  shareholders.

     At  March  31,  2001.  our  current  ratio  of  current  assets  to current
liabilities  was  1.42.  This  compares  to  a current ration of 6.1 at June 30,
2000.  We  have  $84,591  of  long-term debt associated with operating equipment
leases.

     At  March  31,  2001,  we  had unrestricted cash on hand in the amount of $
262,314.

     Management  believes  the  Company  needs  between $500,000 and $750,000 in
additional  working capital in order to successfully cash flow its new facility,
building  a  strong  recurring revenue base. Without additional working capital,
some  large  contract  business,  other  expense  cutting  measures taken by the
Company,  or  a  combination thereof, the Company's current cash resources could
deplete to critical levels over the next few quarters. Thus, management has made
it  a  priority  and  is  working to obtain additional working capital it needs.



     The Company has inventory it can liquidate and management will work to make
this  happen  as  the  Company  no  longer  has a need to maintain the levels of
inventory  it  has  in  the  past.

     The  Company  has  new  fixed  assets  with  a  book value in the amount of
$791,190.  This  is  actually  made  up of assets that cost $999,662 for the new
facility  build-out.  The  difference is part of the amount paid by our landlord
for our build-out allowance. We believe part of these hard assets can be used to
secure  additional  short  term  financing.  Management will work to secure this
financing.


                                        9
<PAGE>
     The  Company  maintains  a  CD  in the amount of $436,000 which secures the
Lease  with  a  Letter  of  Credit arrangement. This CD is released at a rate of
approximately  20%  per year. The first release of this collateral will occur in
November  of  this  year.

Prospective  Information

     We  have  undergone  a  significant transition and reached a major critical
milestone  on  our  road  to  becoming the premier integrated technology service
provider  (ITSP).  We  now  have  our  new  facility  online.

     Management's  intense focus is now shifted to cash flow the operation. With
a  significant  demand  in  Houston for tier-1 data center facilities as well as
integrated  technology services, we are extremely optimistic that we can meet or
beat  our  six-month  goal.  While continuing to develop new, more flexible, and
cost effective Hypersource services, management's primary goal is to fill up the
initial  data  center space with recurring revenue based contracts over the next
six  months.

     The  Company's  strategies  for ramping up its sales volume include its new
Hyperdynamics  Partner  Program (HPP). This program was designed to make our new
infrastructure  available  to  information technology consultants in the Houston
area.  This  program  is being developed by Robert J. Hill, the Company's Senior
Vice  President.  The  program  establishes  IT  consultants  as  Agents  for
Hyperdynamics IT hosting services. One of the first Agents to sign up under this
program  was  Gulf  Coast  Business Systems, Inc. As announced by the Company on
March  28,  2001  the  Company had obtained approximately 150 new customers by a
business arrangement with Gulf Coast Business Systems and we hired their two top
people.  Subsequently,  this  new  Agency  program  was established and Mr. Hill
offered  it  to  Gulf  Coast.  Gulf  Coast decided to become the second of three
companies  to sign up to date for the program in lieu of its agreement to become
employees  signed  on  February  27,  2001.  A  key positive feature of this HPP
relationship  is that the Company does not have to take on the overhead of other
companies  to  access  their establish customer accounts. These consulting firms
like Gulf Coast Business Systems, Inc. can leverage off of our infrastructure to
provide  bundled services for their clients and they don't have to invest in the
infrastructure. The Company is currently evaluating five additional applications
for  this  program.

     Darren-Anthony Lumar, the Company's Executive Vice President is focusing on
continuing  to  develop  the close relationship with AT&T. Recently, the Company
signed  a  new  AT&T Agency Agreement. This Agreement makes Hyperdynamics one of
approximately  17  companies  in  the  country that have joined this program. It
allows  us  to  offer  AT&T Business IP Services, AT&T Business Dial-Up Internet
Access  Services,  AT&T  Web  Site  Services,  and  AT&T Core Data Services. The
Company  now  can  add  services at its new facility under its existing contract
with  AT&T  or  it  can  sell  any  service that AT&T provides as its own and/or
augmented  service  offering.  Thus,  for  example  Hyperdynamics can service IT
projects  that  require very large and extensive data centers around the country
because in essence, AT&T's infrastructure is extended to us. We even have access
to  the  same  web  pricing  tools  as  AT&T employees under this agreement. For
services  sold by Hyperdynamics we receive a bonus up front on each contract and
a  monthly  recurring  residual.  Also,  AT&T sales representatives can bring us
business  surrounding  our core competency to provide end-to-end IT services and
we  can  provide  a  bundled  total  solution to our mutual customer. Under that
scenario we can be the company selling the project or AT&T could be depending on
the  details  of  each deal. Management is very excited about the potential this
program  is  providing for meeting its goals to build its recurring revenue base
as  the  Company  continues  to  grow.


                                       10
<PAGE>
     Harry  Briers  the  Company's CIO has been focused on continuing to build a
pipeline  for  Great Plains based platform business. The Company currently has a
few  larger  deals at different stages of the sales cycle process and is working
diligently on closing this business. Now with the new facility, we can implement
complete  Great  Plains  (now Microsoft) eEnterprise solutions for companies and
then  host them with recurring revenue based contracts, after the implementation
is  complete.  With  the  AT&T  alliance we can establish a nationwide wide area
network  or  use the Internet for our IT hosting clients to access their mission
critical  servers  that  are  managed  in  our  data  center  facility.  Another
opportunity that has been presented in recent months to the Company is to become
a  vertical  market  Application  Service  Provider  (ASP)  for the seismic data
storage, conversion, and interpretation industry. This market is closely related
to  the  booming  oil industry. One of the opportunities that we hope to release
more  detailed  information  about in the near future has to do with projects to
convert  2D and 3D seismic data from old tape media over to DVD and transmission
of  the  converted  data around the world. There are hundreds of millions of old
data  tapes that have a limited storage capacity and shelf life. We believe that
these  tapes  will need conversion to save the invaluable data captured on them.
Hyperdynamics  new  facility  is  a  perfect  fit to provide custom seismic data
conversion services. The Company expects to release more detailed information on
this  business  as  it  develops.

     While we are in the process of reaching this milestone, we expect cash flow
the  operations  in  the  second  quarter  of  FYE  June  30, 2002 and to become
profitable  by  the  third  quarter  of  FYE  2002.

     Based  on  our  five-year  plan,  and  during this process of contractually
filling  up our initial space, we plan to raise additional capital for expansion
of  our  facility at Westwood Technology Center and to initiate second and third
ITC's  in  different  parts  of  the country.  While these facilities are coming
online,  cash  flowing,  and becoming profitable, we will be looking to contract
with  the  appropriate underwriter to put together a major secondary offering to
expand  our  business  model  nationally  and  internationally.


                                       11
<PAGE>
Part II      Other  Information

Item  1.     Legal  Proceedings

A.     During  the  quarter  a  lawsuit  was  filed  against  the Company and is
described  as  follows:

     Court  &  #:     District  Court of Harris County, Texas the 215th Judicial
                      District  No.  2001-06263

     Date  Filed:     February  2,  2001

     Parties:         Plantiff:
                      Dixon  Financial  Services,  Ltd.

                      Vs.

                      Defendants:
                      Fidelity Transfer Company, Enrin 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

     The  $3,000,000  suit  stems  from  the fact that in January of 2000, Dixon
Financial  Services,  Ltd.  requested  Fidelity Transfer, the Company's transfer
agent,  to transfer stock in restricted and certificate form under rule 144k and
to  send  them  unrestricted  certificates  that  they  could deposit into their
account as free trading shares. Fidelity Transfer refused to transfer the shares
even  after  Hyperdynamics  directed them to. Fidelity transfer had been faxed a
temporary  restraining  order  which others claimed prevented Hyperdynamics from
transferring the shares. Hyperydnamics hired legal counsel who expeditiously and
forcefully  showed  the  court  that  it  should  not be part of the TRO at all.
Hyperdynamics  was  immediately released from the TRO. Kent Watts, President for
Hyperdynamics,  its  corporate  counsel, and additional counsel clearly directed
Fidelity  to  transfer  the  shares.  Other claims of the suit claims that other
defendants  acted  as  conspirator's  who  falsified  documents and fraudulently
obtained  the  temporary  restraining  order  that initially caused the problem.

     Hyperdynamics  has  filed a cross-claim in this suit claiming that Fidelity
acted  willfully  in  their failure to transfer the stock when directed to do so
and thus the Company's position is that because of their willful action, we will
not  indemnify  them  whatsoever.  Counsel  believes  that  the Company has done
everything proper and prudent in this matter and believes its exposure should be
minimal  if  any.


                                       12
<PAGE>
B.     During  the  quarter  a  lawsuit  was  filed  against  the Company and is
described  as  follows:

     Court  &  #:     The  Court  of  Chancery  of  the  State  of  Delaware
                      Civil  Action#  18811-NC

     Date  Filed:     April  9,  2001

     Parties:         Plantiff:  Wellington,  LLC.

                      Vs.

                      Hyperdynamics Corporation, Kent Watts, and Michael Watts

     Wellington  LLC  sued  Hyperdynamics  to  make the Company start converting
their preferred stock again after the Company stopped converting due to a breach
of  the  selling  provision  as  amended  in  the  subscription  document.

     On  December  4, 2000 a letter was written by Kent Watts, President for the
Company  to  Wellington LLC informing them that for the second time within a six
month  time  frame  that we believe that they had breached the selling provision
contained  in  the  subscription agreement documents. After the first breach the
President wrote a similar letter and then negotiated an amendment to the selling
provision  dated  September  25,  2000.  The selling provision was placed in the
document  to  protect the Company's market from being dumped on indiscriminately
by the preferred shareholder, thereby protecting the value for all shareholders.
The  December 2000 letter further stated that "Under the circumstances, in order
to protect all shareholder interests, it will not be possible for the Company to
convert  any  more  Series  A  Preferred  stock  for  Wellington  LLC until this
supporting  evidence  can  be  provided and we can become reasonably comfortable
that  this  breach  has  not  occurred as it appears". Further investigation and
information provided by Wellington clearly substantiated their second breach. At
that  time, two conversions had been sent in by Wellington, LLC. One on December
4,  2000  was  a  $35,000  conversion for 59,905 shares of HYPD common stock and
another  conversion  for  $40,000  for  63,000  shares.  Based on the breach the
Company  started  negotiations  in  good  faith  with  Wellington LLC to try and
determine  a  basis  that  the  Company  could  protect  the  interests  of  all
shareholders  and  again start converting again in the future. In that spirit of
good faith, Wellington asked us to at least deliver 37,076 shares of the 122,905
shares  converted  in  December.  The  Company  delivered 37,076 shares at their
request  with  the  understanding  that  no additional shares would be delivered
until  a new arrangement securing the accountability of how they sell the shares
could  be  reached.  It appears now that the 37,076 delivered was to cover their
short  sale in the market. Further investigation of their trading practices back
to  the  original  dates  that  Wellington  LLC  started converting reveals that
Wellington LLC was heavily shorting our stock possibly even before the financing
deal  was signed, as it appears. We are concerned that they have consequentially
been  selling  unregistered  securities  since  they  were  sold  prior to being
converted  under  the  Company's  SB2  registration  and resulting in a scenario
whereby they have driven our price down illegally and thus have already received
more  shares  than  they  had  coming  to  them  for  their  investment.

     Hyperdynamics is in the process of either responding to their lawsuit or to
work  out  a  mutually  agreeable  arrangement  to  go forward. Depending on the
further  response  of  Wellington  LLC,  the Company is also investigating other
options  including  the  possibility  of  filing  its  own lawsuit against them.
Depending  on  their  response,  this may be the only alternative the Company is
reasonably  left  with.


                                       13
<PAGE>
Item  2.     Changes  in  Securities

     The  following transactions were effected by us in reliance upon exemptions
from  registration  under  the  Securities  Act of 1933 as amended under Section
4(2).  We believe that these investors had knowledge and experience in financial
and  business  matters  that allowed them to evaluate the merits and risk of the
receipt  of  these  securities,  and  that  they  were  knowledgeable  about our
operations  and  financial condition. No underwriter participated in, nor did we
pay  any  commissions  or  fees  to  any  underwriter  in  connection  with this
transaction.  This  transaction  did  not  involve  a  public  offerings.  Each
certificate  issued for these 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.

     In  March  of  2001  we issued 100,000 shares of restricted common stock to
Smith Commercial Contracting, Inc. in payment of the general contracting fee for
the  build-out  at  our  new  facility.



Item  6.     Exhibits  and  Reports  on  Form  8-K

             (a)    Exhibits

                           None.

             (b)    Reports  on  Form  8-K

                           None.


                                    SIGNATURE

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
Registrant  has  duly  caused  this  Report  to  be  signed on its behalf by the
undersigned  thereunto  duly

                                         HyperDynamics  Corporation


                                              ----------------------------------
Dated:  May  19,  2001                   By:  /s/  Kent  Watts
                                              Kent Watts, Chairman of the Board,
                                              Chief  Executive  Officer,
                                              and  Chief  Accounting  Officer


                                       14
<PAGE>