SOURCE: Harken Energy Corp.

August 16, 2005 06:00 ET

Harken Energy Provides Domestic Operations Update

DALLAS, TX -- (MARKET WIRE) -- August 16, 2005 -- Harken Energy Corporation's (AMEX: HEC) wholly owned subsidiary, Gulf Energy Management Company ("GEM"), released updated production figures and well completion status for its domestic oil and gas operations, which are located primarily along the onshore and offshore Texas and Louisiana Gulf Coast. In addition during March 2005, GEM acquired two new Coalbed Methane Prospects (CBM) located in Indiana and Ohio, each covering approximately 400,000 acres.

As of June 30, 2005, GEM's net domestic production rate was at approximately 7.3 million cubic feet equivalent of natural gas per day. In addition, new production initiated subsequent to June 30, 2005, related to two wells completed during the second quarter has increased this rate to approximately 7.6 million cubic feet equivalent of natural gas per day as of August 15, 2005. The following field data updates the status of GEM's domestic operations through the end of June 2005.

Lapeyrouse Field, Terrebonne Parish - Louisiana

GEM continues to participate in an active field redevelopment program that has included an interest in seven successful wells in the Lapeyrouse field since the fourth quarter of 2003. GEM holds an average non-operated working interest of 8.2% in seven wells in this field. Although two workovers attempted to remedy certain mechanical problems in the second quarter 2005 were unsuccessful, two additional workovers and one well deepening are scheduled in the field for the third quarter 2005. An eighth well was completed and began producing in May 2005. A ninth well was spudded in June 2005 with a target depth of about 15,000 feet true vertical depth. Currently, the well is still drilling with intermediate casing set to approximately 14,100 feet and has already logged one productive sand behind pipe. GEM holds an approximately 39% operated working interest in this ninth well.

Main Pass, Plaquemines Parish - Louisiana

During the second quarter of 2005, GEM commenced a major overhaul and rebuild of an additional compressor for the Main Pass Field that has been off-line for the past four years. This investment in the unit was an effort to increase gas lift in the field and should permit GEM to return certain wells to production. Currently, the unit is still undergoing a testing period, however, the added capacity had already increased field production in July 2005 by approximately 100 bopd with an expectation of more production from the additional shut-in wells. GEM holds an average 90% working interest in the Main Pass Field. GEM continues its geological and geophysical study in the area, utilizing the recently acquired license to 21 square miles of 3D seismic data, covering the area held by production leases.

Raymondville Field, Willacy and Kenedy Counties - Texas

In 2005, GEM participated in an active recompletion campaign in this field with little success. GEM believes that field production has peaked and will continue to decline. GEM has an average 27% non-operated working interest in this field.

Lake Raccourci Field, Lafourche Parish - Louisiana

GEM holds a 40% operated working interest in each of its Lake Raccourci wells. GEM is presently seeking industry partners to drill a field extension well. This prospect is a result of continuing interpretation of GEM's 60 square mile reprocessed 3D seismic database.

New 3D Seismic Licenses Acquired - Louisiana

GEM continues to evaluate seismic licenses acquired in the fourth quarter of 2004 covering approximately 155 square miles of 3D seismic data in three different surveys across south Louisiana. The largest database is in Terrebonne Parish and includes approximately 70 square miles. Approximately 56 square miles is in Cameron Parish, and approximately 29 square miles in Iberville Parish. A number of leads have developed in this continuing study. GEM is in the process of cataloging and prioritizing the seismic data.

South Beach Field, Chambers County - Texas

GEM has a non-operated working interest of 10% in this area. The initial well was drilled to a true vertical depth of 10,750 feet and completed in the fourth quarter of 2004. GEM also participated in a second well drilled during the first quarter of 2005. Production facilities and a pipeline were essentially completed in the second quarter of 2005, but as of August 9, 2005, production on the well had not commenced pending tie-in with the transmission company now expected in the third quarter of 2005.

Branville Bay Field, Plaquemines Parish - Louisiana

GEM has a non-operated working interest of 12.5% in this area. The initial well was drilled to a total depth of 7,400 feet in the fourth quarter of 2004. The well was completed in the two logged productive sands, and production began in February 2005. A second well which was completed to a total depth of 8,000 feet is currently awaiting pipeline connection expected in the third quarter of 2005.

Point-a-la-Hache Field, Plaquemines Parish - Louisiana

The initial well, State Lease 18077 #1, was drilled to a true vertical depth of 10,300 feet in mid-December 2004. The well was logged productive, completed and tested in the lower sand of two sands that both logged productive. The well began producing in July 2005. GEM maintains a 25% operated working interest in the area.

Allen Ranch Field, Colorado County - Texas

The initial well, the Hancock Gas Unit #1, was drilled to a measured depth of 16,983 feet in late January 2005. The well was productive in four sands and first production began in April 2005. GEM owns an 11.25% non-operated working interest in the area.

Southeast Nada Field, Colorado County - Texas

GEM has a 17% non-operated working interest in this area. The initial well, the Popp et al #1, was drilled to a measured depth of 10,030 feet in late March 2005. The well was logged productive in two sands and began producing in May 2005.

Coalbed Methane Prospects - Indiana and Ohio

In March 2005, GEM entered into two significant Coalbed Methane Exploration and Development Agreements, one related to prospects in Indiana and the other related to prospects in Ohio. Each prospect provides for an area of mutual interest of approximately 400,000 acres. The agreements provide for a phased delineation, pilot and development program, with corresponding staged expenditures. Both agreements call for GEM to fund 100% of the initial $7.5 million in costs to carry out the joint exploration and development of the project in return for a non-operating 65% interest in respective prospect area, and an 82.5% net revenue interest. Ute Energy, a contracted third party with a long track record in successful Coalbed Methane development is the operator and provides expert advice for these projects.

On the Indiana Prospect, GEM elected to drill an additional core hole and expand the scope of the work, and as such has funded $446,000 for Phase I. The last core hole was finished at the beginning of July 2005. Gathered data is being processed and analyzed. Following a report and evaluation of the cores, an election by GEM with regard to Phase II for pilot well drilling will most likely take place late in the third quarter of 2005.

On the Ohio Prospect, funding of the work for Phase I of $284,200 is expected to occur in the third quarter of 2005. GEM expects to move a rig to the applicable location during August 2005, and for core drilling and data gathering to be completed by early fourth quarter of 2005.

Management Comment

"For 2005, GEM allocated $16 million in domestic capital expenditures to increase its oil and gas reserves and grow production. As highlighted in today's update we expect new production to come online in the Lapeyrouse, Main Pass, South Beach, Branville Bay, and Point-a-la-Hache fields. We are very encouraged by this progress along with the initial test results on our Indiana CBM prospect," said Jim Denny, President of Gulf Energy Management Company.

Harken Energy Corporation is engaged in oil and gas exploration, development and production operations both domestically and internationally through its various subsidiaries. Additional information may be found at the Harken Energy Web site, www.harkenenergy.com, or by calling Bevo Beaven or Bill Conboy at CTA Public Relations at (303) 665-4200.

Certain statements in this announcement including statements such as "believes," "anticipates," "expects" and all similar statements regarding future expectations, objectives, intentions and plans for oil and gas exploration, development and production may be regarded as "forward-looking statements" within the meaning of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made. Management's current view and plans, however, are subject to numerous known and unknown risks, uncertainties and other factors that may cause the actual results, performance, timing or achievements of Harken to be materially different from any results, performance, timing or achievements expressed or implied by such forward-looking statements. The various uncertainties, variables, and other risks include those discussed in detail in the Company's SEC filings, including the Annual Report on Form 10-K/A, as amended, for the year ended December 31, 2004 and its Quarterly Report on Form 10-Q, as amended, for the period ended June 30, 2005. Harken undertakes no duty to update or revise any forward-looking statements. Actual results may vary materially.

Contact Information

  • Contact:
    Bevo Beaven
    Vice President

    Bill Conboy
    Vice President
    CTA Public Relations
    303-665-4200