Document:

Exhibit  10.5-Subsidiary  Security  Agreement

                               SECURITY AGREEMENT
                               ------------------

     THIS  SECURITY  AGREEMENT  (the  "Agreement"),  is  entered  into  and made
                                       ---------
effective  as  of  June  __,  2005,  among  TRENDSETTER  PRODUCTION  COMPANY,  a
Mississippi  corporation  with  its  principal  place of business at Sugar Land,
Texas,  HYD  RESOURCES CORPORATION, a Texas corporation with its principal place
of  business  at  Sugar  Land, Texas, (collectively, the "Company"), and Cornell
                                                          -------
Capital Partners, LP (the "Secured Party").
                           -------------

     WHEREAS,  each  Company  is  a  wholly  owned  subsidiary  of Hyperdynamics
Corporation  (the  "Parent");
                    ------

     WHEREAS,  the  ordinary  course  of  business  of  the  Company may be: (a)
producing  and  selling  oil  and  gas;  (b)  operating  oil  and  gas wells and
production  facilities;  (c)  buying  and  selling  oil and gas leases and other
interests in oil and gas; and (d) buying and selling oil and gas exploration and
production equipment, which when conducted in accordance with the Company's past
practice  and  so  long  as  such  sales  do  not  constitute the sale of all or
substantially  all  of  the  Company's  assets shall constitute for the purposes
hereunder  the  "Ordinary  Course  of  Business."

     WHEREAS, on the date hereof, the Parent shall issue and sell to the Secured
Party,  as  provided  in the Securities Purchase Agreement dated the date hereof
(the  "SPA"),  and  the  Secured  Party shall purchase up to Six Million Dollars
       ---
($6,000,000)  of  secured convertible debentures (the "Convertible Debentures"),
                                                       ----------------------
which  shall be convertible into shares of common stock of the Parent, par value
$0.001  (the  "Common  Stock")  (as  converted, the "Conversion Shares"), in the
               -------------                         -----------------
respective  amounts set forth opposite each Buyer(s) name on Schedule I attached
to  the  Securities  Purchase  Agreement;

     WHEREAS,  each  Company  shall  benefit  from  the  sale of the Convertible
Debentures  by  the  Parent  to  the  Secured  Party;

     WHEREAS,  to  induce  the  Secured  Party  to  enter  into  the transaction
contemplated  by  the  Securities Purchase Agreement, the Convertible Debenture,
the  Investor  Registration  Rights  Agreement dated the date hereof between the
Secured  Party and the Parent, the Irrevocable Transfer Agent Instructions dated
the  date  hereof among the Secured Party, the Parent, and the Parent's transfer
agent,  the  Security  Agreement  dated  the  date hereof between the Parent and
Secured  Party,  and  all  related transactions (collectively referred to as the
"Transaction  Documents"),  the  Company  hereby  grants  to the Secured Party a
 ----------------------
security  interest  in  and to the Pledged Property (as defined below) until the
satisfaction  of  the  Obligations  (as  defined  below).

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
herein  contained,  and  for other good and valuable consideration, the adequacy
and receipt of which are hereby acknowledged, the parties hereto hereby agree as
follows:

<PAGE>
                                   ARTICLE 1.

                        DEFINITIONS AND INTERPRETATIONS
                        -------------------------------

     Section  1.1.     Recitals.
                       --------

     The  above  recitals  are  true and correct and are incorporated herein, in
their  entirety,  by  this  reference.

     Section  1.2.     Interpretations.
                       ---------------

     Nothing  herein  expressed  or implied is intended or shall be construed to
confer  upon  any person other than the Secured Party any right, remedy or claim
under  or  by  reason  hereof.

     Section  1.3.     Obligations  Secured.
                       --------------------

     The  obligations  secured hereby are any and all obligations of the Company
or the Parent now existing or hereinafter incurred to the Secured Party, whether
oral  or  written  and  whether  arising  before,  on  or  after the date hereof
including,  without  limitation,  those obligations of the Parent to the Secured
Party  under  the  Transaction Documents, and any other amounts now or hereafter
owed  to  the Secured Party by the Parent thereunder or hereunder (collectively,
the  "Obligations").
      -----------

                                   ARTICLE 2.

   PLEDGED PROPERTY, ADMINISTRATION OF COLLATERAL AND TERMINATION OF SECURITY
   --------------------------------------------------------------------------
                                    INTEREST
                                    --------

     Section  2.1.     Pledged  Property.
                       -----------------

          (a)     The  Company  hereby pledges to the Secured Party, and creates
in  the  Secured  Party for its benefit, a security interest for such time until
the  Obligations  are paid in full, in and to all of the property of the Company
as  set  forth  in  Exhibit "A" attached hereto and the products thereof and the
                    ----------
proceeds of all such items (collectively, the "Pledged Property"):
                                               ----------------

          (b)     Simultaneously  with  the  execution  and  delivery  of  this
Agreement,  the  Company  shall  make,  execute,  acknowledge,  file, record and
deliver  to  the Secured Party any documents reasonably requested by the Secured
Party  to  perfect its security interest in the Pledged Property. Simultaneously
with  the  execution  and  delivery  of  this Agreement, the Company shall make,
execute,  acknowledge  and  deliver  to  the  Secured  Party  such documents and
instruments,  including, without limitation, financing statements, certificates,
affidavits  and  forms  as  may,  in the Secured Party's reasonable judgment, be
necessary  to  effectuate, complete or perfect, or to continue and preserve, the
security  interest of the Secured Party in the Pledged Property, and the Secured
Party shall hold such documents and instruments as secured party, subject to the
terms  and  conditions  contained  herein.

                                        2
<PAGE>
     Section  2.2.     Rights;  Interests;  Etc.
                       -------------------------

          (a)     So long as no Event of Default (as hereinafter defined) shall
have  occurred  and  be  continuing:

               (i)     the  Company  shall  be  entitled to exercise any and all
rights  pertaining  to  the Pledged Property or any part thereof for any purpose
not  inconsistent  with the terms hereof including conducting the sale of assets
in a bona fide sale for value from time to time in connection with the Company's
Ordinary Course of Business, and, for such sales, any existing security interest
hereunder shall automatically be released at the time of such a sale, and at the
request  of  the Company, the Secured Party shall provide further assurances and
releases that such security interest and/or lien is released; and

               (ii)     the  Company shall be entitled to receive and retain any
and all payments paid or made in respect of the Pledged Property.

          (b)     Upon  the occurrence and during the continuance of an Event of
Default:

               (i)     All rights of the Company to exercise the rights which it
would otherwise be entitled to exercise pursuant to Section 2.2(a)(i) hereof and
to receive payments which it would otherwise be authorized to receive and retain
pursuant  to  Section  2.2(a)(ii) hereof shall be suspended, and all such rights
shall  thereupon become vested in the Secured Party who shall thereupon have the
sole  right  to exercise such rights and to receive and hold as Pledged Property
such  payments;  provided,  however,  that  if  the  Secured  Party shall become
entitled  and  shall  elect  to  exercise  its  right  to realize on the Pledged
Property  pursuant  to  Article  5  hereof,  then  all cash sums received by the
Secured  Party, or held by Company for the benefit of the Secured Party and paid
over  pursuant  to  Section  2.2(b)(ii)  hereof,  shall  be  applied against any
outstanding  Obligations;  and

               (ii)    All  interest,  dividends,  income and other payments and
distributions  which  are  received by the Company contrary to the provisions of
Section  2.2(b)(i)  hereof  shall  be  received  in trust for the benefit of the
Secured  Party, shall be segregated from other property of the Company and shall
be  forthwith  paid  over  to  the  Secured  Party;  or

               (iii)   The  Secured  Party  in  its  sole  discretion  shall  be
authorized  to sell any or all of the Pledged Property at public or private sale
in  order  to recoup all of the outstanding principal plus accrued interest owed
pursuant  to  the  Convertible  Debenture  as  described  herein

          (c)     An  "Event  of Default" shall be deemed to have occurred under
                       -----------------
this  Agreement  upon  an Event of Default under the Convertible Debentures. Any
default  notice  requirement  and cure periods shall be the same as set forth in
the  Convertible  Debentures.

                                        3
<PAGE>
                                   ARTICLE 3.

                         ATTORNEY-IN-FACT; PERFORMANCE
                         -----------------------------

     Section  3.1.     Secured  Party  Appointed  Attorney-In-Fact.
                       -------------------------------------------

     Upon the occurrence of an Event of Default, the Company hereby appoints the
Secured  Party  as  its  attorney-in-fact,  with full authority in the place and
stead  of  the Company and in the name of the Company or otherwise, from time to
time  in  the  Secured  Party's discretion to take any action and to execute any
instrument  which  the Secured Party may reasonably deem necessary to accomplish
the  purposes  of  this Agreement, including, without limitation, to receive and
collect all instruments made payable to the Company representing any payments in
respect  of  the Pledged Property or any part thereof and to give full discharge
for  the  same.  The  Secured  Party  may  demand, collect, receipt for, settle,
compromise,  adjust,  sue  for, foreclose, or realize on the Pledged Property as
and when the Secured Party may determine.  To facilitate collection, the Secured
Party  may  notify  account debtors and obligors on any Pledged Property to make
payments  directly  to  the  Secured  Party.

     Section  3.2.     Secured  Party  May  Perform.
                       ----------------------------

     If the Company fails to perform any agreement contained herein, the Secured
Party,  at  its  option,  may  itself  perform,  or  cause  performance of, such
agreement,  and  the  expenses  of  the  Secured  Party  incurred  in connection
therewith shall be included in the Obligations secured hereby and payable by the
Company  under  Section  8.3.

                                   ARTICLE 4.

                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

     Section  4.1.     Authorization;  Enforceability.
                       ------------------------------

     Each  of  the  parties hereto represents and warrants that it has taken all
action  necessary  to  authorize the execution, delivery and performance of this
Agreement  and  the  transactions  contemplated  hereby;  and upon execution and
delivery,  this Agreement shall constitute a valid and binding obligation of the
respective  party, subject to applicable bankruptcy, insolvency, reorganization,
moratorium  and  similar  laws  affecting creditors' rights or by the principles
governing  the  availability  of  equitable  remedies.

     Section  4.2.     Ownership  of  Pledged  Property.
                       --------------------------------

     The  Company  warrants  and  represents that it is the legal and beneficial
owner  of  the  Pledged  Property free and clear of any lien, security interest,
option  or  other charge or encumbrance except for the security interest created
by  this  Agreement.

                                        4
<PAGE>
                                   ARTICLE 5.

                    DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL
                    ----------------------------------------

     Section  5.1.     Default  and  Remedies.
                       ----------------------

          (a)     If  an  Event  of  Default  occurs, then in each such case the
Secured  Party may declare the Obligations to be due and payable immediately, by
a  notice  in  writing  to  the  Company,  and  upon  any  such declaration, the
Obligations  shall  become  immediately  due  and  payable.

          (b)     Upon  the occurrence of an Event of Default, the Secured Party
shall:  (i) be entitled to receive all distributions with respect to the Pledged
Property,  (ii) to cause the Pledged Property to be transferred into the name of
the  Secured Party or its nominee, (iii) to dispose of the Pledged Property, and
(iv) to realize upon any and all rights in the Pledged Property then held by the
Secured  Party.

     Section  5.2.     Method  of  Realizing  Upon  the  Pledged Property; Other
                       ---------------------------------------------------------
Remedies.
--------

     Upon  the  occurrence of an Event of Default, in addition to any rights and
remedies  available  at  law or in equity, the following provisions shall govern
the Secured Party's right to realize upon the Pledged Property:

          (a)     Any item of the Pledged Property may be sold for cash or other
value in any number of lots at brokers board, public auction or private sale and
may  be  sold  without  demand, advertisement or notice (except that the Secured
Party shall give the Company ten (10) days' prior written notice of the time and
place  or  of  the  time  after  which  a  private  sale  may be made (the "Sale
                                                                            ----
Notice")),  which  notice  period  shall  in  any  event  is hereby agreed to be
------
commercially  reasonable.  At  any  sale  or  sales of the Pledged Property, the
Company  may  bid for and purchase the whole or any part of the Pledged Property
and,  upon compliance with the terms of such sale, may hold, exploit and dispose
of  the  same  without  further accountability to the Secured Party. The Company
will  execute  and  deliver,  or  cause  to  be  executed  and  delivered,  such
instruments,  documents,  assignments, waivers, certificates, and affidavits and
supply  or  cause  to be supplied such further information and take such further
action as the Secured Party reasonably shall require in connection with any such
sale.

          (b)     Any  cash  being held by the Secured Party as Pledged Property
and  all  cash  proceeds  received  by the Secured Party in respect of, sale of,
collection  from,  or  other  realization  upon  all  or any part of the Pledged
Property  shall  be  applied  as  follows:

               (i)     to  the  payment of all amounts due the Secured Party for
the  expenses reimbursable to it hereunder or owed to it pursuant to Section 8.3
hereof;

               (ii)    to  the  payment  of the Obligations then due and unpaid.

               (iii)   the  balance,  if  any, to the person or persons entitled
thereto, including, without limitation, the Company.

                                        5
<PAGE>
          (c)     In  addition  to  all  of  the  rights  and remedies which the
Secured  Party may have pursuant to this Agreement, the Secured Party shall have
all  of  the rights and remedies provided by law, including, without limitation,
those  under  the  Uniform  Commercial  Code.

               (i)     If  the  Company  fails  to pay such amounts due upon the
occurrence  of  an  Event of Default which is continuing, then the Secured Party
may  institute  a  judicial proceeding for the collection of the sums so due and
unpaid,  may  prosecute  such  proceeding  to  judgment  or final decree and may
enforce  the same against the Company and collect the monies adjudged or decreed
to  be  payable  in  the  manner provided by law out of the property of Company,
wherever  situated.  The  Secured  Party may proceed against the Company without
proceeding  first  against  any  other party, including, without limitation, the
Parent.

               (ii)    The  Company  agrees  that  it  shall  be  liable for any
reasonable  fees, expenses and costs incurred by the Secured Party in connection
with  enforcement,  collection  and  preservation  of the Transaction Documents,
including,  without  limitation,  reasonable  legal  fees and expenses, and such
amounts  shall  be  deemed included as Obligations secured hereby and payable as
set  forth  in  Section  8.3  hereof.

     Section  5.3.     Proofs  of  Claim.
                       -----------------

     In  case  of  the  pendency  of  any receivership, insolvency, liquidation,
bankruptcy,  reorganization,  arrangement,  adjustment,  composition  or  other
judicial proceeding relating to the Company or the property of the Company or of
such  other obligor or its creditors, the Secured Party (irrespective of whether
the  Obligations  shall  then  be  due  and  payable  as therein expressed or by
declaration  or  otherwise  and  irrespective of whether the Secured Party shall
have made any demand on the Company for the payment of the Obligations), subject
to  the rights of Previous Security Holders, shall be entitled and empowered, by
intervention  in  such  proceeding  or  otherwise:

               (i)     to  file  and  prove  a claim for the whole amount of the
Obligations  and  to  file such other papers or documents as may be necessary or
advisable  in order to have the claims of the Secured Party (including any claim
for  the  reasonable legal fees and expenses and other expenses paid or incurred
by  the  Secured  Party  permitted hereunder and of the Secured Party allowed in
such  judicial  proceeding),  and

               (ii)    to  collect  and  receive  any  monies  or other property
payable  or  deliverable  on any such claims and to distribute the same; and any
custodian,  receiver,  assignee,  trustee,  liquidator,  sequestrator  or  other
similar  official  in  any  such judicial proceeding is hereby authorized by the
Secured  Party to make such payments to the Secured Party and, in the event that
the  Secured  Party shall consent to the making of such payments directed to the
Secured  Party,  to  pay  to  the  Secured Party any amounts for expenses due it
hereunder.

     Section  5.4.     Duties  Regarding  Pledged  Property.
                       ------------------------------------

     The  Secured Party shall have no duty as to the collection or protection of
the  Pledged  Property  or  any  income thereon or as to the preservation of any
rights  pertaining  thereto,  beyond

                                        6
<PAGE>
the  safe custody and reasonable care of any of the Pledged Property actually in
the  Secured  Party's  possession.

                                   ARTICLE 6.

                             AFFIRMATIVE COVENANTS
                             ---------------------

     The  Company  covenants and agrees that, from the date hereof and until the
Obligations  have  been fully paid and satisfied, unless the Secured Party shall
consent otherwise in writing (as provided in Section 8.4 hereof):

     Section  6.1.     Existence,  Properties,  Etc.
                       -----------------------------

          (a)     The  Company  shall  do,  or  cause to be done, all things, or
proceed  with  due  diligence with any actions or courses of action, that may be
reasonably necessary (i) to maintain Company's due organization, valid existence
and  good  standing  under  the  laws of its state of incorporation, and (ii) to
preserve  and  keep  in  full  force and effect all qualifications, licenses and
registrations  in those jurisdictions in which the failure to do so could have a
Material Adverse Effect (as defined below); and (b) the Company shall not do, or
cause  to  be done, any act impairing the Company's corporate power or authority
(i)  to carry on the Company's business as now conducted, and (ii) to execute or
deliver  this  Agreement or any other document delivered in connection herewith,
including,  without  limitation,  any UCC-1 Financing Statements required by the
Secured Party (which other loan instruments collectively shall be referred to as
the "Loan Instruments") to which it is or will be a party, or perform any of its
     ----------------
obligations  hereunder  or  thereunder.  For purpose of this Agreement, the term
"Material  Adverse  Effect"  shall  mean  any  material  and  adverse  affect as
 -------------------------
determined  by  Secured Party in its reasonable discretion, whether individually
or  in  the  aggregate,  upon  (a)  the  Company's assets, business, operations,
properties  or  condition,  financial  or  otherwise;  (b) the Company's to make
payment  as  and  when  due  of  all  or any part of the Obligations; or (c) the
Pledged  Property.

     Section  6.2.     Reserved.
                       --------

     Section  6.3.     Accounts  and  Reports.
                       ----------------------

     The  Company  shall  maintain a standard system of accounting in accordance
with  generally accepted accounting principles consistently applied and provide,
at  its  sole  expense,  to  the  Secured  Party  the  following:

          (a)     as  soon  as available,  a  copy  of  any  notice  or  other
communication  alleging  any  nonpayment or other material breach or default, or
any  foreclosure  or  other action respecting any material portion of its assets
and  properties,  received  respecting any of the indebtedness of the Company in
excess  of $100,000 (other than the Obligations), or any demand or other request
for  payment  under  any  guaranty,  assumption,  purchase  agreement or similar
agreement or arrangement respecting the indebtedness or obligations of others in
excess  of  $100,000, including any received from any person acting on behalf of
the  Secured  Party  or  beneficiary  thereof;  and

                                        7
<PAGE>
          (b)     within  fifteen  (15) days after the making of each submission
or  filing, a copy of any report, financial statement, notice or other document,
whether  periodic or otherwise, submitted to the shareholders of the Company, or
submitted  to  or filed by the Company with any governmental authority involving
or affecting (i) the Company that could have a Material Adverse Effect; (ii) the
Obligations;  (iii)  any  part  of  the  Pledged  Property;  or  (iv) any of the
transactions contemplated in this Agreement or the Loan Instruments.

     Section  6.4.     Maintenance  of  Books  and  Records;  Inspection.
                       -------------------------------------------------

     The  Company  shall  maintain its books, accounts and records in accordance
with  generally  accepted accounting principles consistently applied, and permit
the  Secured  Party, its officers and employees and any professionals designated
by  the  Secured  Party  in writing, at any time to visit and inspect any of its
properties  (including  but  not limited to the collateral security described in
the  Transaction  Documents  and/or  the  Loan Instruments), corporate books and
financial  records,  and  to discuss its accounts, affairs and finances with any
employee,  officer  or  director  thereof.

     Section  6.5.     Maintenance  and  Insurance.
                       ---------------------------

          (a)     The  Company  shall maintain or cause to be maintained, at its
own  expense,  all  of  its  assets  and  properties  in  good working order and
condition,  subject  to  ordinary  wear  and  tear, making all necessary repairs
thereto  and  renewals  and  replacements  thereof.

          (b)     The  Company  shall maintain or cause to be maintained, at its
own  expense,  insurance in form, substance and amounts (including deductibles),
which  the  Company  deems  reasonably  necessary to the Company's business, (i)
adequate  to  insure  all assets and properties of the Company, which assets and
properties  are of a character usually insured by persons engaged in the same or
similar  business  against  loss  or  damage  resulting from fire or other risks
included in an extended coverage policy; (ii) against public liability and other
tort claims that may be incurred by the Company; (iii) as may be required by the
Transaction  Documents and/or the Loan Instruments or applicable law and (iv) as
may  be  reasonably  requested  by Secured Party, all with adequate, financially
sound  and  reputable  insurers.

     Section  6.6.     Contracts  and  Other  Collateral.
                       ---------------------------------

     The  Company  shall perform all of its obligations under or with respect to
each  instrument,  receivable,  contract  and  other  intangible included in the
Pledged  Property  to  which  the Company is now or hereafter will be party on a
timely  basis and in the manner therein required, including, without limitation,
this  Agreement.

     Section  6.7.     Defense  of  Collateral,  Etc.
                       ------------------------------

     The  Company  shall defend and enforce its right, title and interest in and
to  any  part  of:  (a) the Pledged Property; and (b) if not included within the
Pledged  Property,  those assets and properties whose loss could have a Material
Adverse  Effect,  the  Company shall defend the Secured Party's right, title and
interest in and to each and every part of the Pledged Property,

                                        8
<PAGE>
each  against  all  manner  of  claims and demands on a timely basis to the full
extent  permitted  by  applicable  law.

Section  6.8.     Payment  of  Debts,  Taxes,  Etc.
                  ---------------------------------

     The  Company  shall  pay,  or cause to be paid, all of its indebtedness and
other  liabilities and perform, or cause to be performed, all of its obligations
in accordance with the respective terms thereof, and pay and discharge, or cause
to  be paid or discharged, all taxes, assessments and other governmental charges
and  levies  imposed upon it, upon any of its assets and properties on or before
the  last  day on which the same may be paid without penalty, as well as pay all
other  lawful  claims  (whether  for  services,  labor,  materials,  supplies or
otherwise)  as  and  when  due.

     Section  6.9.     Taxes  and  Assessments;  Tax  Indemnity.
                       ----------------------------------------

     The  Company  shall  (a)  file  all  tax  returns and appropriate schedules
thereto that are required to be filed under applicable law, prior to the date of
delinquency,  (b)  pay  and  discharge  all  taxes, assessments and governmental
charges  or levies imposed upon the Company, upon its income and profits or upon
any  properties  belonging  to  it,  prior to the date on which penalties attach
thereto,  and  (c) pay all taxes, assessments and governmental charges or levies
that,  if  unpaid,  might  become  a  lien or charge upon any of its properties;
provided,  however,  that  the  Company  in good faith may contest any such tax,
assessment,  governmental  charge or levy described in the foregoing clauses (b)
and  (c)  so  long  as appropriate reserves are maintained with respect thereto.

     Section  6.10.     Compliance  with  Law  and  Other  Agreements.
                        ---------------------------------------------

     The  Company  shall  maintain its business operations and property owned or
used  in  connection  therewith  in  compliance with (a) all applicable federal,
state  and  local  laws,  regulations  and  ordinances  governing  such business
operations  and  the use and ownership of such property, and (b) all agreements,
licenses,  franchises,  indentures and mortgages to which the Company is a party
or by which the Company or any of its properties is bound.  Without limiting the
foregoing,  the Company shall pay all of its indebtedness promptly in accordance
with  the  terms  thereof.

     Section  6.11.     Notice  of  Default.
                        -------------------

     The  Company  shall  give  written  notice  to  the  Secured  Party  of the
occurrence  of  any  default  or  Event  of  Default  under  this Agreement, the
Transaction  Documents  or  any  other Loan Instrument or any other agreement of
Company for the payment of money, promptly upon the occurrence thereof.

     Section  6.12.     Notice  of  Litigation.
                        ----------------------

     The  Company shall give notice, in writing, to the Secured Party of (a) any
actions,  suits  or  proceedings  wherein  the  amount  at issue is in excess of
$50,000,  instituted by any persons against the Company, or affecting any of the
assets  of  the  Company,  and (b) any dispute, not resolved within fifteen (15)
days  of  the  commencement  thereof,  between  the  Company  on  the

                                        9
<PAGE>
one  hand and any governmental or regulatory body on the other hand, which might
reasonably  be  expected  to  have  a  Material  Adverse  Effect on the business
operations  or  financial  condition  of  the  Company.

                                   ARTICLE 7.

                               NEGATIVE COVENANTS
                               ------------------

     The  Company  covenants  and  agrees  that,  from the date hereof until the
Obligations  have  been  fully paid and satisfied, the Company shall not, unless
the  Secured  Party  shall  consent  otherwise  in  writing:

     Section  7.1.     Liens  and  Encumbrances.
                       ------------------------

     The  Company shall not, except in the Ordinary Course of Business, directly
or  indirectly  make,  create,  incur, assume or permit to exist any assignment,
transfer,  pledge,  mortgage,  security interest or other lien or encumbrance of
any  nature  in,  to  or  against  any  part  of  the Pledged Property or of the
Company's  capital stock, or offer or agree to do so, or own or acquire or agree
to  acquire  any  asset  or  property  of  any  character  subject to any of the
foregoing  encumbrances  (including any conditional sale contract or other title
retention  agreement),  or assign, pledge or in any way transfer or encumber its
right  to  receive any income or other distribution or proceeds from any part of
the  Pledged  Property  or  the  Company's  capital  stock;  or  enter  into any
sale-leaseback financing respecting any part of the Pledged Property  as lessee,
or cause or assist the inception or continuation of any of the foregoing.

     Section  7.2.     Articles,  By-Laws, Mergers, Consolidations, Acquisitions
                       ---------------------------------------------------------
and  Sales.
----------

     Without  the  prior  express  written  consent  of the Secured Party, which
consent  shall  not  be unreasonably withheld, the Company shall not:  (a) Amend
its  Articles  of  Incorporation  or  By-Laws;  (b)  be  a  party to any merger,
consolidation or corporate reorganization, (c) purchase or otherwise acquire all
or  substantially  all  of  the  assets or stock of, or any partnership or joint
venture  interest  in,  any  other  person,  firm or entity, (d) sell, transfer,
convey, grant a security interest in or lease all or any substantial part of its
assets,  nor  (e)  create  any  subsidiaries nor convey any of its assets to any
subsidiary  in  excess  of  $200,000  in  the  aggregate.

     Section  7.3.     Reserved.
                       --------

     Section  7.4.     Dividends,  Etc.
                       ---------------

     Except  for  dividends payable to the Parent, the Company shall not declare
or  pay  any  dividend  of any kind, in cash or in property, on any class of its
capital  stock,  nor purchase, redeem, retire or otherwise acquire for value any
shares  of such stock, nor make any distribution of any kind in respect thereof,
nor make any return of capital to shareholders, nor make any payments in respect
of any pension, profit sharing, retirement, stock option, stock bonus, incentive
compensation  or  similar  plan  (except  as  required  or permitted hereunder),
without  the prior written consent of the Secured Party, which consent shall not
be  unreasonably  withheld.

                                       10
<PAGE>
     Section  7.5.     Conduct  of  Business.
                       ---------------------

     The Company will continue to engage, in an efficient and economical manner,
in  a  business  of the same general type as conducted by it on the date of this
Agreement.

                                   ARTICLE 8.

                                 MISCELLANEOUS
                                 -------------

     Section  8.1.     Notices.
                       -------

     All  notices  or  other  communications  required  or permitted to be given
pursuant  to  this Agreement shall be in writing and shall be considered as duly
given  on:  (a)  the  date  of  delivery,  if delivered in person, by nationally
recognized  overnight  delivery  service  or  (b) five (5) days after mailing if
mailed  from  within  the  continental  United  States by certified mail, return
receipt requested to the party entitled to receive the same:

If to the Secured Party:      Cornell Capital Partners, LP
                              101 Hudson Street, Suite 3700
                              Jersey City, New Jersey 07302
                              Attention   Mark Angelo
                                          Portfolio Manager
                              Telephone:  (201) 986-8300
                              Facsimile:  (201) 985-8266

With copy to:                 David Gonzalez, Esq.
                              101 Hudson Street, Suite 3700
                              Jersey City, NJ 07302
                              Telephone:  (201) 985-8300
                              Facsimile:  (201) 985-8266

And if to the Company:        c/o Hyperdynamics Corporation
                              One Sugar Creek Center Boulevard, Suite 125
                              Sugar Land, Texas 77478
                              Attention:  Kent P. Watts
                              Telephone:  (713) 353-9400
                              Facsimile:  (713) 353-9421

With a copy to:               Joel Seidner, Esq.
                              880 Tully Road #50
                              Houston, TX 77079
                              Telephone:  (281) 493-1311
                              Facsimile:  (281) 667-3292

     Any  party  may  change  its  address  by  giving notice to the other party
stating its new address.  Commencing on the tenth (10th) day after the giving of
such  notice,  such  newly

                                       11
<PAGE>
designated  address shall be such party's address for the purpose of all notices
or  other  communications  required  or  permitted  to be given pursuant to this
Agreement.

     Section  8.2.     Severability.
                       ------------

     If  any provision of this Agreement shall be held invalid or unenforceable,
such  invalidity  or  unenforceability  shall  attach only to such provision and
shall  not  in  any  manner  affect or render invalid or unenforceable any other
severable  provision  of this Agreement, and this Agreement shall be carried out
as  if  any  such  invalid or unenforceable provision were not contained herein.

     Section  8.3.     Expenses.
                       --------

     In  the  event  of an Event of Default, the Company will pay to the Secured
Party  the  amount  of any and all reasonable expenses, including the reasonable
fees  and  expenses  of  its  counsel,  which  the  Secured  Party  may incur in
connection  with:  (i)  the  custody or preservation of, or the sale, collection
from,  or other realization upon, any of the Pledged Property; (ii) the exercise
or  enforcement of any of the rights of the Secured Party hereunder or (iii) the
failure  by  the  Company  to  perform  or observe any of the provisions hereof.

     Section  8.4.     Waivers,  Amendments,  Etc.
                       ---------------------------

     The  Secured  Party's  delay  or  failure at any time or times hereafter to
require  strict  performance  by  Company  of  any  undertakings,  agreements or
covenants  shall  not waiver, affect, or diminish any right of the Secured Party
under  this Agreement to demand strict compliance and performance herewith.  Any
waiver  by  the  Secured Party of any Event of Default shall not waive or affect
any other Event of Default, whether such Event of Default is prior or subsequent
thereto  and whether of the same or a different type.  None of the undertakings,
agreements  and  covenants  of  the  Company contained in this Agreement, and no
Event  of Default, shall be deemed to have been waived by the Secured Party, nor
may  this  Agreement  be  amended,  changed  or  modified,  unless  such waiver,
amendment,  change  or  modification  is  evidenced  by an instrument in writing
specifying  such  waiver,  amendment,  change  or modification and signed by the
Secured  Party.

     Section  8.5.     Continuing  Security  Interest.
                       ------------------------------

     This  Agreement  shall create a continuing security interest in the Pledged
Property and shall: (i) remain in full force and effect until payment in full of
the  Obligations;  and  (ii)  be binding upon the Company and its successors and
heirs and (iii) inure to the benefit of the Secured Party and its successors and
assigns.  Upon  the  payment  or  satisfaction  in  full of the Obligations, the
Company  shall be entitled to the return, at its expense, of such of the Pledged
Property  as  shall  not have been sold in accordance with Section 5.2 hereof or
otherwise  applied  pursuant  to  the  terms  hereof.

                                       12
<PAGE>
     Section  8.6.     Independent  Representation.
                       ---------------------------

     Each  party  hereto acknowledges and agrees that it has received or has had
the  opportunity to receive independent legal counsel of its own choice and that
it has been sufficiently apprised of its rights and responsibilities with regard
to  the  substance  of  this  Agreement.

     Section  8.7.     Applicable  Law:  Jurisdiction.
                       ------------------------------

     This  Agreement shall be governed by and interpreted in accordance with the
laws  of the State of New Jersey without regard to the principles of conflict of
laws.  The  parties further agree that any action between them shall be heard in
Hudson  County,  New Jersey, and expressly consent to the jurisdiction and venue
of  the  Superior  Court  of New Jersey, sitting in Hudson County and the United
States  District  Court  for  the  District of New Jersey sitting in Newark, New
Jersey  for  the  adjudication  of  any  civil  action asserted pursuant to this
Paragraph.

     Section  8.8.     Waiver  of  Jury  Trial.
                       -----------------------

     AS  A FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT
AND  TO  MAKE  THE  FINANCIAL  ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY
WAIVES  ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO
THIS  AGREEMENT  AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION.

     Section  8.9.     Entire  Agreement.
                       -----------------

     This  Agreement  constitutes  the  entire  agreement  among the parties and
supersedes  any  prior agreement or understanding among them with respect to the
subject  matter  hereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       13
<PAGE>
     IN  WITNESS  WHEREOF, the parties hereto have executed this Agreement as of
the  date  first  above  written.

                              TRENDSETTER PRODUCTION COMPANY

                              By: /s/ Kent P. Watts
                              Name: Kent P. Watts
                              Title: Chief Executive officer

                              HYD RESOURCES CORPORATION

                              By: /s/ Kent P. Watts
                              Name: Kent P. Watts
                              Title: Chief Executive Officer

                              SECURED PARTY:
                              CORNELL CAPITAL PARTNERS, LP

                              BY: YORKVILLE ADVISORS, LLC
                              ITS: GENERAL PARTNER

                              By: /s/ Mark Angelo
                              Name: Mark Angelo
                              Title: Portfolio Manager

                                       14
<PAGE>
                                    EXHIBIT A
                         DEFINITION OF PLEDGED PROPERTY

     For  the purpose of securing prompt and complete payment and performance by
the  Company  of  all  of  the  Obligations,  the  Company  unconditionally  and
irrevocably hereby grants to the Secured Party a continuing security interest in
and  to,  and  lien  upon,  the  following  Pledged  Property  of  the  Company:

          (a)     all  goods  of  the  Company,  including,  without limitation,
machinery,  equipment,  furniture,  furnishings, fixtures, signs, lights, tools,
parts,  supplies  and  motor  vehicles  of  every  kind  and description, now or
hereafter owned by the Company or in which the Company may have or may hereafter
acquire any interest, and all replacements, additions, accessions, substitutions
and  proceeds  thereof,  arising from the sale or disposition thereof, and where
applicable,  the  proceeds  of insurance and of any tort claims involving any of
the  foregoing;

          (b)     all  inventory  of the Company, including, but not limited to,
all  goods,  wares,  merchandise,  parts,  supplies,  finished  products,  other
tangible  personal  property,  including such inventory as is temporarily out of
Company's  custody  or possession and including any returns upon any accounts or
other  proceeds,  including  insurance  proceeds,  resulting  from  the  sale or
disposition  of  any  of  the  foregoing;

          (c)     all  contract  rights  and general intangibles of the Company,
including,  without limitation, goodwill, trademarks, trade styles, trade names,
leasehold  interests, partnership or joint venture interests, patents and patent
applications,  copyrights,  deposit  accounts  whether  now  owned  or hereafter
created;

          (d)     all  documents,  warehouse  receipts,  instruments and chattel
paper of the Company whether now owned or hereafter created;

          (e)     all accounts and other receivables, instruments or other forms
of  obligations  and  rights  to  payment  of  the  Company (herein collectively
referred  to  as  "Accounts"),  together  with  the  proceeds thereof, all goods
                   --------
represented  by  such  Accounts  and  all such goods that may be returned by the
Company's  customers,  and  all  proceeds  of  any  insurance  thereon,  and all
guarantees,  securities  and liens which the Company may hold for the payment of
any  such  Accounts  including,  without  limitation,  all rights of stoppage in
transit,  replevin and reclamation and as an unpaid vendor and/or lienor, all of
which  the  Company  represents  and  warrants  will  be  bona fide and existing
obligations of its respective customers, arising out of the sale of goods by the
Company  in  the  ordinary  course  of  business;

          (f)     to  the  extent  assignable, all of the Company's rights under
all  present  and future authorizations, permits, licenses and franchises issued
or  granted  in  connection  with  the  operations  of  any  of  its facilities;

          (g)     all equity interests, securities or other instruments in other
companies, including, without limitation, any subsidiaries, investments or other
entities (whether or not controlled); and

          (h)     all  products  and  proceeds  (including,  without limitation,
insurance proceeds) from the above-described Pledged Property.

                                      A-1Exhibit 10.6-Irrevocable Transfer Agent Instructions

                    IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

                                 June 19, 2006

Fidelity Transfer Company
1800 South West Temple, #301
Salt Lake City, UT 84115

     RE:  HYPERDYNAMICS CORPORATION

Ladies  and  Gentlemen:

     Reference  is  made  to  that  certain  Securities  Purchase Agreement (the
"Securities  Purchase  Agreement")  of  even  date  herewith  by  and  between
 -------------------------------
Hyperdynamics  Corporation,  a  Delaware  corporation  (the  "Company"), and the
                                                              -------
Buyers  set  forth  on  Schedule I attached thereto (collectively the "Buyers").
                                                                       ------
Pursuant  to  the  Securities  Purchase Agreement, the Company shall sell to the
Buyers,  an  the  Buyers shall purchase from the Company, convertible debentures
(collectively,  the  "Debentures")  in  the  aggregate  principal  amount of Six
                      ----------
Million  Dollars ($6,000,000), plus accrued interest, which are convertible into
shares  of  the  Company's  common stock, par value $.001 per share (the "Common
                                                                          ------
Stock"),  at  the  Buyers  discretion.  The Company has also issued to the Buyer
-----
warrants  to  purchase  up  to  2,100,000 shares of Common Stock, at the Buyer's
discretion (the "Warrant").  These instructions relate to the following stock or
                 -------
proposed  stock  issuances  or  transfers:

     1.   Shares  of  Common  Stock  to  be issued to the Buyers upon conversion
          of  the  Debentures  ("Conversion  Shares")  plus the shares of Common
                                 ------------------
          Stock ion of accrued interest and liquidated damages into Common Stock
          (the  "Interest  Shares").
                 ----------------

     2.   Up to 2,100,000  shares  of  Common  Stock  to be issued to the Buyers
          upon  exercise  of the Warrant (the "Warrant Shares"). to be issued to
                                               --------------
          the  Buyers  upon  convers

     This letter shall serve as our irrevocable authorization and direction to
Fidelity Transfer Company (the "Transfer Agent") to do the following:
                                --------------

     1.  Conversion Shares and Warrant Shares.

          a.   Instructions  Applicable  to  Transfer  Agent.  With  respect  to
               the  Conversion  Shares,  Warrant Shares and the Interest Shares,
               the  Transfer  Agent  shall  issue

<PAGE>
               the  Conversion  Shares,  Warrant  Shares  and  the  Interest
               Shares  to  the  Buyers  from  time  to time upon delivery to the
               Transfer  Agent  of  a  properly  completed  and  duly  executed
               Conversion  Notice (the "Conversion Notice") in the form attached
                                        -----------------
               as  Exhibit  A  to  the  Debentures,  or a properly completed and
               duly executed Exercise Notice (the "Exercise Notice") in the form
                                                   ---------------
               attached  as  Exhibit A to the Warrant, delivered to the Transfer
               Agent  by  David  Gonzalez,  Esq.  (the "Escrow Agent") acting as
                                                        ------------
               agent  on  behalf  of  the  Company. Upon receipt of a Conversion
               Notice  or  an  Exercise  Notice, the Transfer Agent shall within
               three  (3)  Trading  Days thereafter (i) issue and surrender to a
               common carrier for overnight delivery to the address as specified
               in  the  Conversion Notice or the Exercise Notice, a certificate,
               registered  in  the  name  of the Buyer or its designees, for the
               number  of  shares  of  Common  Stock to which the Buyer shall be
               entitled as set forth in the Conversion Notice or Exercise Notice
               or  (ii)  provided  the  Transfer  Agent  is participating in The
               Depository  Trust  Company  ("DTC")  Fast  Automated  Securities
                                             ---
               Transfer  Program,  upon  the  request of the Buyers, credit such
               aggregate  number  of  shares of Common Stock to which the Buyers
               shall  be  entitled  to  the  Buyer's or their designees' balance
               account  with  DTC  through  its  Deposit Withdrawal At Custodian
               ("DWAC")  system  provided the Buyer causes its bank or broker to
                 ----
               initiate  the DWAC transaction. For purposes hereof "Trading Day"
                                                                    -----------
               shall  mean  any  day  on  which  the  Nasdaq  Market is open for
               customary  trading.

          b.   The Company  hereby  confirms  to  the  Transfer  Agent  and  the
               Buyer  that  certificates  representing  the  Conversion  Shares
               and  the  Warrant  Shares  shall  not bear any legend restricting
               transfer  and  should  not  be  subject  to  any  stop-transfer
               restrictions  and  shall  otherwise be freely transferable on the
               books  and  records  of the Company; provided that counsel to the
               Company  delivers  (i)  the  Notice of Effectiveness set forth in
               Exhibit  I  attached hereto and (ii) an opinion of counsel in the
               ----------
               form  set  forth  in  Exhibit II attached hereto, and that if the
                                     ----------
               Conversion Shares, Warrant Shares and the Interest Shares are not
               registered for sale under the Securities Act of 1933, as amended,
               then  the  certificates for the Conversion Shares, Warrant Shares
               and Interest Shares shall bear the following legend substantially
               as  follows:

               "THE  SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT
               BEEN  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
               APPLICABLE  STATE  SECURITIES  LAWS.  THE  SECURITIES  HAVE  BEEN
               ACQUIRED  FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE, SOLD,
               TRANSFERRED  OR  ASSIGNED  IN  THE  ABSENCE  OF  AN  EFFECTIVE
               REGISTRATION  STATEMENT  FOR  THE SECURITIES UNDER THE SECURITIES
               ACT  OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR
               AN  OPINION  OF  COUNSEL,  IN A FORM REASONABLY ACCEPTABLE TO THE
               COMPANY,  THAT  REGISTRATION  IS  NOT  REQUIRED UNDER SAID ACT OR
               APPLICABLE  STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE
               144  UNDER  SAID  ACT."

                                        2
<PAGE>
          c.   In the  event  that  counsel  to  the Company fails or refuses to
               render  an  opinion as required to issue the Conversion Shares or
               the  Warrant  Shares  in  accordance with the preceding paragraph
               (either with or without restrictive legends, as applicable), then
               the  Company  irrevocably and expressly authorizes counsel to the
               Buyer to render such opinion. The Transfer Agent shall accept and
               be  entitled  to rely on such opinion for the purposes of issuing
               the  Conversion  Shares.

          d.   Instructions  Applicable  to  Escrow  Agent.  Upon  the  Escrow
               Agent's  receipt  of  a  properly  completed Conversion Notice or
               Exercise  Notice  and the Aggregate Exercise Price (as defined in
               the  Warrant), the Escrow Agent shall, within one (1) Trading Day
               thereafter,  send  to the Transfer Agent the Conversion Notice or
               Exercise  Notice  as  the  case may be, which shall constitute an
               irrevocable  instruction  to  the  Transfer Agent to process such
               Conversion Notice or Exercise Notice in accordance with the terms
               of  these  instructions.

     2.   All Shares.

          a.   The Transfer  Agent  shall  reserve  for  issuance  to the Buyers
               a  minimum  of  3,000,000 Conversion Shares and 2,100,000 Warrant
               Shares. All such shares shall remain in reserve with the Transfer
               Agent  until  the Buyers provides the Transfer Agent instructions
               that the shares or any part of them shall be taken out of reserve
               and  shall  no  longer  be  subject  to  the  terms  of  these
               instructions.

          b.   The Company  hereby  irrevocably  appoints  the  Escrow  Agent as
               a  duly  authorized  agent  of  the  Company  for the purposes of
               authorizing the Transfer Agent to process issuances and transfers
               specifically  contemplated  herein.  Acts, errors, commissions or
               omission  of  the  Escrow Agent shall not cause a default of this
               Irrevocable  Transfer  Agent  Instructions,  nor a default of any
               Transaction  Documents  (as  defined  in  the Securities Purchase
               Agreement).

          c.   The Transfer  Agent  shall  rely  exclusively  on  the Conversion
               Notice  or  the  Exercise  Notice and shall have no liability for
               relying  on  such instructions. Any Conversion Notice or Exercise
               Notice  delivered  hereunder  shall  constitute  an  irrevocable
               instruction  to  the  Transfer  Agent  to  process such notice or
               notices  in  accordance  with  the  terms thereof. Such notice or
               notices  may be transmitted to the Transfer Agent by facsimile or
               any  commercially  reasonable  method.

          d.   The Company  hereby  confirms  to  the  Transfer  Agent  and  the
               Buyers  that  no  instructions  other than as contemplated herein
               will  be  given  to Transfer Agent by the Company with respect to
               the  matters referenced herein. The Company hereby authorizes the
               Transfer  Agent,  and  the  Transfer Agent shall be obligated, to
               disregard  any  contrary  instructions  in  connections  with the
               Transaction  Documents  received  by or on behalf of the Company.

                                        3
<PAGE>
     Certain  Notice  Regarding  the  Escrow Agent. The Company and the Transfer
Agent hereby acknowledge that the Escrow Agent is general counsel to the Buyers,
a  partner  of  the  general  partner of the Buyers and counsel to the Buyers in
connection  with the transactions contemplated and referred herein.  The Company
and  the  Transfer  Agent  agree  that  in  the  event of any dispute arising in
connection  with  this Agreement or otherwise in connection with any transaction
or  agreement  contemplated  and  referred  herein,  the  Escrow  Agent shall be
permitted  to  continue  to represent the Buyers and neither the Company nor the
Transfer  Agent  will  seek  to  disqualify  such  counsel.

     The  Company  hereby agrees that it shall not replace the Transfer Agent as
the  Company's  transfer  agent without the prior written consent of the Buyers.

     If  for  any  reason, during the term of this Agreement, the Transfer Agent
resigns  as  transfer  agent,  the  Transfer Agent shall provide the Company and
Buyers  with  thirty  (30)  days  written  notice prior to such resignation (the
"Resignation  Notice").  The Company shall have five (5) business days after the
 -------------------
date of the Transfer Agent's Resignation Notice to obtain a suitable replacement
transfer  agent, which agent shall have agreed to serve as transfer agent and to
be  bound  by  the  terms  and  conditions of these Transfer Agent Instructions.

     The  Company  and  the  Transfer  Agent hereby acknowledge and confirm that
complying  with  the terms of this Agreement does not and shall not prohibit the
Transfer Agent from satisfying any and all fiduciary responsibilities and duties
it may owe to the Company whether or not concerning this Agreement.

     The  company  will  notify  in  its  resolution instructions each time that
shares  are  to  be  issued that the shares are those pursuant to this agreement
with  the corresponding number.  The number that the Transfer Agent has assigned
to  this  agreement  is  4002.

     The  Company  and the Transfer Agent acknowledge that the Buyers is relying
on  the representations and covenants made by the Company and the Transfer Agent
hereunder  and  are  a  material inducement to the Buyers purchasing convertible
debentures  under  the  Securities  Purchase  Agreement.  The  Company  and  the
Transfer  Agent  further  acknowledge  that  without  such  representations  and
covenants of the Company and the Transfer Agent made hereunder, the Buyers would
not  purchase  the  Debentures.

     Each party hereto specifically acknowledges and agrees that in the event of
a  breach  or  threatened  breach by a party hereto of any provision hereof, the
Buyers  will  be  irreparably  damaged  and  that  damages  at  law  would be an
inadequate  remedy  if  these  Irrevocable  Transfer Agent Instructions were not
specifically enforced.  Therefore, in the event of a breach or threatened breach
by  a  party hereto, including, without limitation, the attempted termination of
the  agency  relationship  created  by  this  instrument,  the  Buyers  shall be
entitled,  in  addition  to  all  other  rights  or  remedies,  to an injunction
restraining  such breach, without being required to show any actual damage or to
post  any bond or other security, and/or to a decree for specific performance of
the  provisions  of  these  Irrevocable  Transfer  Agent  Instructions.

     Event  of  Default or Breach.  Any default or breach notice requirement and
cure  period  shall be the same as any default notice and cure periods set forth
in  the  Convertible  Debentures.

                                        4
<PAGE>
                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                        5
<PAGE>
     IN WITNESS WHEREOF, the parties have caused this letter agreement regarding
Irrevocable  Transfer Agent Instructions to be duly executed and delivered as of
the  date  first  written  above.

                                    COMPANY:

                                    HYPERDYNAMICS CORPORATION

                                    By: /s/ Kent P/ Watts
                                    Name:  Kent P. Watts
                                    Title: President and Chief Executive Officer

                                    /s/ David Gonzalez, Esq.
                                    David Gonzalez, Esq.

FIDELITY TRANSFER COMPANY

By: /s/ Heidi Sadowski
Name: Heidi Sadowski
Title:Office Manager

                                        6
<PAGE>
<TABLE>
<CAPTION>
                                        SCHEDULE I
                                        ----------

                                    SCHEDULE OF BUYERS
                                    ------------------

                                                                  ADDRESS/FACSIMILE
NAME                                   SIGNATURE                   NUMBER OF BUYERS
----------------------------  ----------------------------  ------------------------------
<S>                           <C>                           <C>

Cornell Capital Partners, LP  By:  Yorkville Advisors, LLC  101 Hudson Street - Suite 3700
                              Its: General Partner          Jersey City, NJ  07303
                                                            Facsimile:   (201) 985-8266

                              By:   /s/ Mark Angelo
                                   ----------------------
                              Name: Mark Angelo
                              Its:  Portfolio Manager
</TABLE>

                                 SCHEDULE I-1
<PAGE>
                                   EXHIBIT I
                                   ---------

                   TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
                   ------------------------------------------

                         FORM OF NOTICE OF EFFECTIVENESS
                         -------------------------------
                            OF REGISTRATION STATEMENT
                            -------------------------

_________, 2006

________

Attention:

RE:   HYPERDYNAMICS CORPORATION

Ladies and Gentlemen:

     We  are  counsel  to  Hyperdynamics  Corporation, (the "Company"), and have
                                                             -------
represented  the  Company  in  connection  with that certain Securities Purchase
Agreement, dated as of February  __, 2006 (the "Securities Purchase Agreement"),
                                                -----------------------------
entered  into  by  and  among the Company and the Buyers set forth on Schedule I
attached  thereto  (collectively the "Buyers") pursuant to which the Company has
                                      ------
agreed to sell to the Buyers up to $6,000,000 of secured convertible debentures,
which  shall  be  convertible  into  shares  (the  "Conversion  Shares")  of the
                                                    ------------------
Company's  common  stock,  par  value  $.001  per share (the "Common Stock"), in
                                                              ------------
accordance with the terms of the Securities Purchase Agreement.  Pursuant to the
Securities  Purchase Agreement, the Company also has entered into a Registration
Rights  Agreement,  dated  as  of  May ___, 2006, with the Buyers (the "Investor
                                                                        --------
Registration  Rights  Agreement")  pursuant  to  which the Company agreed, among
-------------------------------
other  things,  to  register  the  Conversion Shares under the Securities Act of
1933, as amended (the "1933 Act").  In connection with the Company's obligations
                       --------
under  the  Securities Purchase Agreement and the Registration Rights Agreement,
on  _______,  2006  the  Company  filed  a  Registration  Statement  (File  No.
___-_________)  (the  "Registration Statement") with the Securities and Exchange
                       ----------------------
Commission (the "SEC") relating to the sale of the Conversion Shares.
                 ---

     In  connection  with  the  foregoing,  we  advise the Transfer Agent that a
member  of  the SEC's staff has advised us by telephone that the SEC has entered
an  order  declaring  the Registration Statement effective under the 1933 Act at
____ P.M. on __________, 2006 and we have no knowledge, after telephonic inquiry
of a member of the SEC's staff, that any stop order suspending its effectiveness
has  been issued or that any proceedings for that purpose are pending before, or
threatened  by,  the  SEC and the Conversion Shares are available for sale under
the  1933  Act  pursuant  to  the  Registration  Statement.

                                 EXHIBIT I-1
<PAGE>
     The  Buyers  has  confirmed  it  shall  comply with all securities laws and
regulations  applicable  to  it  including  applicable  prospectus  delivery
requirements  upon  sale  of  the  Conversion  Shares.

                                      Very  truly  yours,

                                      By:
                                           ------------------------

                                  EXHIBIT I-2
<PAGE>
                                   EXHIBIT II
                                   ----------

                   TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
                   ------------------------------------------

                                 FORM OF OPINION
                                 ---------------

________________ 2006

VIA FACSIMILE AND REGULAR MAIL
------------------------------

________

Attention:

     RE:  HYPERDYNAMICS CORPORATION

Ladies and Gentlemen:

     We  have  acted  as  special  counsel  to  Hyperdynamics  Corporation  (the
"Company"),  in  connection  with  the  registration  of  ___________shares (the
"Shares")  of  its common stock with the Securities and Exchange Commission (the
 ------
"SEC").  We  have  not  acted  as  your  counsel.  This  opinion is given at the
 ---
request  and  with  the  consent  of  the  Company.

     In  rendering  this opinion we have relied on the accuracy of the Company's
Registration  Statement on Form SB-2, as amended (the "Registration Statement"),
                                                       ----------------------
filed by the Company with the SEC on _________ ___, 2005.  The Company filed the
Registration  Statement  on behalf of certain selling stockholders (the "Selling
                                                                         -------
Stockholders").  This  opinion relates solely to the Selling Shareholders listed
------------
on  Exhibit  "A"  hereto  and  number  of Shares set forth opposite such Selling
    ------------
Stockholders'  names.  The  SEC declared the Registration Statement effective on
__________  ___,  2005.

     We  understand  that  the  Selling  Stockholders  acquired  the Shares in a
private  offering  exempt from registration under the Securities Act of 1933, as
amended.  Information  regarding  the  Shares  to  be  sold  by  the  Selling
Shareholders  is  contained  under  the  heading  "Selling  Stockholders" in the
Registration  Statement,  which information is incorporated herein by reference.
This  opinion  does  not  relate  to  the  issuance of the Shares to the Selling
Stockholders.  The  opinions  set  forth  herein  relate  solely  to the sale or
transfer  by  the  Selling  Stockholders  pursuant to the Registration Statement
under  the  Federal laws of the United States of America.  We do not express any
opinion  concerning  any  law  of  any  state  or  other  jurisdiction.

     In rendering this opinion we have relied upon the accuracy of the foregoing
statements.

                                   EXHIBIT II
<PAGE>
     Based  on  the  foregoing,  it  is  our  opinion  that the Shares have been
registered  with the Securities and Exchange Commission under the Securities Act
of  1933,  as  amended,  and  that  ________  may remove the restrictive legends
contained on the Shares. This opinion relates solely to the number of Shares set
forth  opposite  the  Selling  Stockholders  listed  on Exhibit "A" hereto.  The
                                                        -----------
shares  may  therefore  be  originally  issued  directly from the transfer agent
without  restrictive  legend  as  the  shares  have been sold and the prospectus
delivery  requirements  have  been  met.

     This opinion is furnished to Transfer Agent specifically in connection with
the sale or transfer of the Shares, and solely for your information and benefit.
This  letter  may  not be relied upon by Transfer Agent in any other connection,
and  it  may  not  be  relied upon by any other person or entity for any purpose
without  our prior written consent.  This opinion may not be assigned, quoted or
used  without  our  prior  written  consent.  The  opinions set forth herein are
rendered  as  of  the  date  hereof and we will not supplement this opinion with
respect  to changes in the law or factual matters subsequent to the date hereof.

Very truly yours,

                                  EXHIBIT II-2
<PAGE>
                                    EXHIBIT A
                                    ---------

                         (LIST OF SELLING STOCKHOLDERS)
                         ------------------------------

NAME:                                              NO. OF SHARES:
-------------------------------------------------  -----------------------------

                                   EXHIBIT A

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]