In 1992, Harvest obtained an operating service agreement (“OSA”) from the Venezuelan state-owned national oil company, PDVSA, to develop the South Monagas Unit located in Eastern Venezuela. Our operations are conducted through an 80 percent-owned affiliate, Harvest Vinccler, C.A. In 2005, the government of Venezuela initiated a series of actions to compel companies with OSAs to convert those agreements into companies in which PDVSA has a majority interest. On March 31, 2006, we signed a Memorandum of Understanding (“MOU”) with PDVSA and Corporaci&243;n Venezolana del Petroleo S.A. to convert our operating service agreement to a mixed company (Empresa Mixta Petrodelta, S.A.) subject to certain conditions. On August 16, 2006, the parties entered into an amendment to the MOU that provided for the award of three additional fields (Isleño, Temblador and El Slato). While the negotiation process and timeline to convert our operating service agreement to a mixed company are largely in the hands of the Venezuelan authorities, we are continually working toward an equitable resolution.