Hyperdynamics (NYSE: HDY) has taken a step toward preparing its drilling campaign offshore the Republic of Guinea by issuing "an invitation to tender to drilling companies." But it's still too early to place a safe bet on this volatile stock.

The tender offer covers the drilling of three wells including an optional well on a project where established player Dana Petroleum holds a 23% interest. And with BlackRock (NYSE: BLK) recently investing $30 million in exchange for a 12% stake in the company, optimism is running high. As I see it, Foolish investors probably shouldn't get carried away with news of a stock that has no real substance as of yet.

High expectations
Hyperdynamics' existing petroleum prospects are the stuff made of great expectations rather than the stuff made of grounded reality. Though there is nothing typically wrong with that (most E&P companies start off that way, after all), it would be wise to take a bit of a wait-and-see approach with this upstart.

Hyperdynamics' primary asset base happens to be off West Africa, encompassing an area of roughly 9,650 square miles in which the company maintains a production-sharing contract with the Guinean government. But like all things, there's a lot more detail to this deal than meets the eye.

The company has already relinquished 70% of the original area back in December 2009 without making any substantial discovery of oil and gas, and must relinquish an additional 25% of the currently retained area by September 2013. Essentially, the company is banking on a 3-D seismic survey report indicating a resource estimate of about 345 million barrels of recoverable oil in the region.

The Guinean government also has the option of taking on a 15% participating interest and sharing in the development costs, but only after production has begun. That's quite a long wait given that the first drilling is slated for the fourth quarter of 2011. It means the company will have to shoulder the costs of drilling initially without any guarantee of actual discovery.

Changed political climate?
Despite numerous advances in recent years, dealing in Africa still is extraordinarily complex. Hyperdynamics believes a good relationship with the government will be a necessity in order to accomplish its business goals in the region -- and rightly so. Even so, there is probably an unacceptable level of geopolitical risk to Fools looking for a piece of the action.

As we all know, select regions in Africa are currently in revolt and others are constantly under the threat of renewed unrest. Guinea appears to be moving along in the right direction, having held its first democratic election in history last year. But with the government considered unstable since the country's independence, it will be a tall order for investors to feel truly comfortable with the situation. It is definitely a good sign to see improved relations with the government, but again, this must be taken with a grain of salt given the present political atmosphere in the African continent.

Now what?
Hyperdynamics is riding high on what amounts to a lot of hot air. That's not great news for Foolish investors who are facing both unknown risks from a business environment as well as a lot of opacity when it comes to the company's actual asset base.

Unless you know exactly what you're doing there, there are better energy stocks to invest in. Hyperdyamics' stock had been extremely volatile over the past year, recently retracing from the upswing it enjoyed in December and early January. Unless there is strong fundamental news coming through in the next few days, however, we may not see another sustained upswing anytime soon.

Isac Simon doesn't own shares of any of the companies mentioned in the article. BlackRock is a Motley Fool Inside Value selection. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.