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.
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.
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