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Current HNR Stock Info

Harvest Natural Resources (ticker: HNR) announced on June 22, 2011 the company has spud its second well on the Budong-Budong Block in Indonesia, the KD-1 well. The company plans to drill the well to a total measured depth of 10,800 feet to test stacked Miocene and Eocene targets.

OAG360 Comments:

Today’s announcement came approximately two and a half months after the company confirmed hydrocarbons in the Lariang sub-basin of the Budong-Budong Block PSC in Indonesia.  HNR encountered a high pressure system 1,900 feet above the targeted total depth on the Lariang LG-1 exploration well (64.4% WI) and decided to move the rig to the Karma sub-basin to spud the KD-1 well which was announced today.

Harvest’s Indonesian assets are located onshore West Sulawesi across 884,000 acres PSC in which the company holds a 64.4% interest. Two exploratory wells were planned for 2011 in which the company believes both wells could hold approximately 50 to 180 MMBLs per well.

In a separate but related note, HNR announced on June 13, 2011 that they had encountered oil while drilling the Dussafu Marin PSC in the offshore waters of Gabon, West Africa.  In Gabon, Harvest holds a 66.667% working interest in the well Dussafu Ruche Marin-1 (DRM-1) which was spud on April 28, 2011 aimed to test the Gamba and Dentale Formations.  Reaching a vertical depth of 9,953 feet within the Upper Dentale Formation, Harvest has discovered approximately 55 feet of pay within the Gamba Formation.  Forward plans include deepening the well to test the Middle and Lower Dentale Formation and sidetracking to appraise the extent of the Gamba Formation.

Previous to the company’s two recent exploration announcements in Budong-Budong and Gabon, the company’s international prospects were highly exploratory. With the recent capital influx from HNR’s Utah asset sale, the company now has two de-risked exploration areas ready for future development capital. The company recently sold its producing Utah assets for $215 million to Newfield Exploration (NYSE: NFX) allowing the company to allocate capital to its international, high-impact exploration projects. The only remaining producing assets in the company’s portfolio are through HNR’s 32% ownership interest in Petrodelta, its Venezuelan affiliate which was producing approximately 29,800 BOPD at April 8, 2011.

Later in 2011, HNR plans to spud two exploratory wells in Oman. Currently, HNR is evaluating recent 3D seismic data in order to define the future drilling locations for the wells.

Click here for EnerCom’s previous write-up on HNR.

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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.