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Harvest Natural Resources’ (ticker: HNR) exploration projects around the world took one step closer to coming to fruition. The company greatly de-risked its Budong-Budong exploration project in Indonesia, and successfully drilled a horizontal well in an untested Venezuelan field.

In Indonesia, Harvest drilled the Lariang LG-1 exploration well (64.4% WI) on the Budong Budong Block PSC to 5,311 feet with 16.5 pound per gallon mud, and encountered multiple hydrocarbon shows and high pressures in the Miocene formation. The well was plugged and abandoned, due to encountering high pressure 1,700 feet above the targeted total depth; however, this test well confirmed the presence of hydrocarbons on the company’s exploration block, and the confirmation of an effective trap and seal.  The rig is moving to the KD-1 location adjacent in the Karma sub-basin which will test the larger of the two structures targeted for Budong Budong. The KD-1 well will be drilled to 8,100 feet.

The company’s most recognized assets are located in Venezuela through a 32% ownership interest in Petrodelta, its Venezuelan affiliate which was producing approximately 29,800 BOPD at April 8, 2011. During the first three months of 2011, Petrodelta completed four wells and produced at the rate of 28,700 BOPD, an increase of 32% from the same period in 2010. The company is in development mode in the Temblador and El Salto fields, and has been exploring for an additional development field. Petrodelta drilled its first horizontal well in the highly anticipated, untested Isleno field which tested at 1,800 BOPD. This well helps bolster the case for drilling several wells in the field this year, providing Petrodelta a new area for growth and expansion. A 2011 capital budget of $224 million has been planned to reach a production target 36,000 BOPD and further develop infrastructure in Temblador and El Salto fields during 2011.

For those not familiar with the Harvest story, the company recently sold its Utah assets for $215 million to Newfield Exploration (NYSE: NFX) to pay down debt and allocate additional capital to its international, high-impact exploration projects. In addition to its Venezuela and Indonesia projects, HNR plans to spud its Gabon exploration well, the Ruche Marin-A, in late April 2011. The well will be drilled in 380 feet of water to a total depth of 10,100 feet to test multiple stacked pre-salt targets. Also, in Oman, HNR has two exploratory wells planned to spud in late 2011. HNR has a three-year obligation period and funding commitment of $22.0 million.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.