Harken Energy charges $8.8 million Costa Rica investment against 2001 earnings

Feb. 20, 2002
Harken Energy Corp., Houston, said it does not expect to receive the permits needed to drill the Moin well in Costa Rica any time soon because political and regulatory conditions there have caused delays. Consequently, Harken is fully impairing its $8.8 million investment in Coast Rica in its year-end 2001 earnings.

By the OGJ Online Staff

HOUSTON, Feb. 20 -- Harken Energy Corp., Houston, said it does not expect to receive the permits needed to drill the Moin well in Costa Rica any time soon because political and regulatory conditions there have caused delays.

Consequently, Harken is fully impairing its $8.8 million investment in Coast Rica in its year-end 2001 earnings.

Harken's subsidiary, Global Energy Development Ltd., holds 40% interest in certain onshore and offshore properties on the Gulf Coast side of Costa Rica (OGJ, Sept. 25, 2000, p. 44). All work, surveys, and assessments needed to request the environmental permit were filed in March 2001 with SETENA, Costa Rica's environmental agency.

SETENA must issue an environmental permit before the Ministry of Environmental Energy (MINAE) can issue a drilling permit. Meanwhile in a case unrelated to Harken, the Costa Rican Supreme Court recently ruled that SETENA lacks the ability to grant environmental permits.

Harken believes it is now unlikely that SETENA will issue the necessary environmental permit for its well in the near future.

"We are very disappointed," said Mikel D. Faulkner, Harken's chairman. "We intend to continue lobbying and pursuing any legal avenues available for a reasonable resolution to these impediments being raised against the project and for the issuance of the permits necessary to proceed with the project."