Harvest: Budong-Budong PSC drilling update

The following is an excerpt from US firm Harvest Natural Resources' Quarterly Report released on Wednesday on drilling progress at Budong-Budong PSC. (ed)

The second exploratory well on the Budong-Budong PSC, the KD-1, spud on June 20, 2011. The KD-1 is located approximately 50 miles south of the Lariang-1 (LG-1). The KD-1 well is being drilled to test a thrusted anticline with stacked Miocene and Eocene targets. The well was initially drilled to a depth of 9,633 feet. Upon running in the hole after changing drill bits, the drill string became stuck at a depth of 8,390 feet. After multiple attempts to break free, the operator severed the drill string, set a cement plug at 7,347 feet and sidetracked the well. The well was sidetracked and has been drilled to a total depth of 11,800 feet and logged. The evaluation of cuttings, logs and sidewall cores demonstrate the presence of oil over a 200 feet low permeability and low porosity clastic section.

Plans are to drill ahead, as a Harvest exclusive operation, to a final total depth of approximately 14,400 feet to explore for the main Eocene objective, which has not yet been encountered in the well. These Eocene sands are considered more prospective as the depositional environment differs from the aforementioned Miocene sands.

The remaining work commitment for the current exploration phase on the Budong PSC is for geological and geophysical work to be completed in 2012 at a minimum of $0.5 million ($0.3 million net to our 64.4 percent interest).

Harvest owns a 64.4 percent non-operated working interest in the Budong-Budong Block PSC.(end of excerpt)