Replies

By the way, the wells were dry holes.

That has never actually been confirmed. Drilling results were never released. They were tight holes. It is not beyond the realm of possibility that Harken was merely used as a vehicle to do a favor for Middle East interests who would end up getting a new proved reserve base without having to spend a dime to drill a well themselves.

Think of Harken as a toxic waste dump for failed spook deals and you start to understand that company's curious history.

Wanna bet?

In 1991-93, a U.S. Company, Harken Energy Corporation, explored for oil both off-shore and on Muharraq Island, on the basis of a production- sharing agreement with BANOCO. The first two wells, one on Fasht al Jarim, a shallow reef north of Bahrain, and one on Muharraq, were "dry holes." Seismic data is being studied to determine a site for a possible third well.

U.S. Department of State Bahrain 1996 Country Commercial Guide.

It is correct that the first two wells were declared "non-commercial" and were plugged and abandoned. But that does not necessarily mean they were really "dry holes."

The entire nature of that Bahrain drilling venture is suspect. Its origins are clearly implausible and murky, coming as it were through Mike Ameen. In addition, Harken apears to have invested little or no money itself. It was carried on the cost of both wells by the Bass family's Bass Enterprises.

Here was an amazing windfall opportunity to explore a highly prospective concession covering essentially all of Bahrain's offshore territory, sitting in the midst of the most prolific hydrocarbon basin in the world. What did they do? Bass funded just two wells and then paid $2-mil to extricate itself from the obligation for a third. Harken, instead of finding another partner or using the funds itself to drill the second two required wells, let the concession lapse.

As of May 1994, Harken still had 500,000 acres in its concession. That's a huge area, not slated to expire for another year, with possible extensions. In fact, from Harken's 10-K, it appears it swapped the required drilling of two more wells for just the reprocessing of seismic data. At a minimum, it could have farmed out the concession for a carried minority interst to someone with the cash to explore. If it were a legit deal, any major or sizeable independent would have lunged at the opportunity. Instead, Harken let the concession expire.

Ten years later, ChevronTexaco and Petronas are hot to get drilling rights offshore Bahrain. I wonder why?