Harken Energy Acquires Second CBM Prospect
Harken Energy's subsidiary, Gulf Energy Management Company, has entered into an Exploration and Development Agreement with Ohio Cumberland L.P., a Texas limited partnership, for the joint exploration and development of coalbed methane within the Cumberland Prospect Area consisting of approximately 400,000 acres in Guernsey, Noble, Muskingum, Washington and Morgan counties of Ohio. Harken Energy announced on March 23, 2005, that it had entered into a similar agreement for a 400,000 acre coalbed methane prospect located in Indiana. Today's announcement marks the second major acquisition of coalbed methane prospect acreage in 2005 for Harken Energy, bringing its total coalbed methane prospect portfolio to approximately 800,000 acres.
Gulf Energy Management's obligations under this new agreement include funding 100% of the initial $7.5 million of costs to carry out the joint exploration and development of the project in return for a 65% working interest in the Cumberland Prospect Area. The agreement also provides that Gulf Energy Management receive an 82.5% net revenue interest. Gulf Energy Management's funding obligation is to be allocated among three separate technical phases of the project. At the conclusion of each of the first two phases, Gulf Energy Management may elect to terminate the agreement, thereby reducing its commitments. Complete details of the agreement may be found in the Form 8-K filed today with the Securities and Exchange Commission.
"The acquisition in the Cumberland Prospect Area along with the recently acquired Indiana Posey Prospect Area provide Gulf Energy Management with a strong platform to optimize opportunities available in coalbed methane," said Jim Denny, President of Gulf Energy Management. "These opportunities together with our existing oil and gas holdings located along the Texas and Louisiana Gulf Coast should allow Gulf Energy Management to continue with its growth strategy objectives."
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