Harvest: relinquishment process of Budong-Budong block in progess

By Romel S. Gurky

NYSE-listed Harvest Natural Resources said on Thursday its Budong office has been closed and the process of relinquishment of the Budong-Budong block in West Sulawesi is in progress.

?Since this exploration well was not drilled within 18 months of the date of approval from the Government of Indonesia of this transaction (October 9, 2014), the company was obligated to pay our partner in the Budong-Budong PSC $3.2 million. This charge was invoiced by and paid to our joint venture partner in October 2014,? the company said.

The extension of the initial exploration term includes an exploration well, which if not drilled by January 2016, results in the obligation of the joint venture to return the entire Budong-Budong PSC to the Government of Indonesia. Concurrently, we purchased an additional 7.1% equity interest from our partner and became operator of the Budong PSC in exchange for agreeing to fund 100% of the costs of the first exploration well.

In January 2013, the Budong-Budong PSC partners were granted a four year extension of the initial six year exploration term of the Budong PSC to January 15, 2017.

Harvest Natural Resources, through its subsidiary Harvest Budong-Budong BV holds a 71.5 percent interest in the Budong-Budong PSC, with the remainder held by Tately Budong-Budong BV.

Editing by Johannes Simbolon