Harvest Natural Resources Announces 2010 Fourth
Quarter and Year-End Results
HOUSTON, March 16, 2011
/PRNewswire/ -- Harvest Natural
Resources, Inc. (NYSE: HNR) today announced 2010 fourth quarter and
year-end earnings. �
Harvest
posted a fourth quarter net loss of $4.0 million,
or $0.12
per diluted share, compared to a net income of $5.1 million,
or $0.15
per diluted share, for the 2009 fourth quarter. � For the year ended December
31, 2010, Harvest's net income was $15.3
million, or $0.43 per
diluted share, compared with a net loss of $3.1 million,
or $0.09
per diluted share, for 2009. �
The
fourth quarter results include exploration charges of $2.7 million,
or $0.08
per diluted share. � For the year, Harvest incurred exploration charges
of $8.0
million, or $0.21 per
diluted share. � The Company also incurred non-recurring charges
classified as other non-operating costs for the quarter and the year of $4.0
million, or $0.12 and $0.10
per diluted share, respectively. � Adjusted for these items, Harvest's
fourth quarter income was $2.7 million, or $0.08
per diluted share, and for the year, net income was $27.3 million
or $0.74
per diluted share.
Petrodelta,
S.A. (Petrodelta), Harvest's Venezuelan affiliate, reported fourth
quarter income from operations of $71.6 million ($22.9
million net to Harvest's 32 percent equity interest
under International Financial Reporting Standards [IFRS]).
� Petrodelta's fourth quarter results include a charge for $36.1
million ($11.6 million
net to Harvest's 32 percent interest under IFRS) as an adjustment to the
remeasurement gain resulting from the netting of 2009 PDVSA receivables and
payables, and a special interest charge of $19.5 million ($6.2
million net to Harvest's 32 percent interest under
IFRS) relating to the sale of foreign currency through the Central Bank.
After these charges and taxes, Petrodelta reported fourth quarter earnings of
$7.8
million ($2.5 million
net to Harvest's 32 percent equity interest under IFRS). � After
adjustments to Petrodelta's IFRS earnings, primarily to conform to U.S. GAAP,
Harvest's 32 percent share of Petrodelta's earnings was $10.2 million,
a 107.1 percent increase over the prior quarter. �
Petrodelta
reported income from operations for the year of $279.2 million
($89.3
million net to Harvest's 32 percent equity interest
under IFRS). � Petrodelta reported a remeasurement gain from the
devaluation of the Venezuelan Bolivar (Bolivar) of a non-cash charge in the
amount of $84.4
million ($27.0 million
net to Harvest's 32 percent equity interest under IFRS) due to the devaluation
of the Bolivar for the year offset by a special interest expense charge of $19.5
million ($6.2 million
net to Harvest's 32 percent interest under IFRS) relating to the sale of
foreign currency through the Central Bank. After these charges and
taxes, for the year ending December 31, 2010,
Petrodelta reported earnings of $77.7 million,
($24.9
million net to Harvest's 32 percent equity interest,
under IFRS). � After adjustments to Petrodelta's IFRS earnings,
primarily to conform to U.S. GAAP, Harvest's 32 percent share of Petrodelta's
earnings was $52.9
million, a 62.4 percent increase over 2009.
In
addition, for 2010 the Company's worldwide proved reserves totaled 54.6
million barrels of oil equivalent (MMBOE) and proved and probable reserves
(2P) were 118.9 MMBOE, reflecting increases of 17 percent and 42 percent,
respectively. � Proved additions to reserves replaced production by 474
percent.
Harvest
President and Chief Executive Officer, James Edmiston,
said, "2010 provided Harvest with a solid platform to further grow the
company. � Both production and reserves saw substantial increases during
the year, with production providing especially strong growth in the second
half from Petrodelta. � In 2011 and beyond, our work in Indonesia, Gabon and Oman provides
the opportunity to build further value through exploration as we did with our
Utah assets
throughout 2010. � As a company, we remain bullish on our growth
prospects and our ability to realize growth in shareholder value from our
asset base, both in the near and long term."
VENEZUELA
During
2010, Petrodelta drilled and completed 16 development wells. � During
the fourth quarter of 2010, Petrodelta produced approximately 2.4 million
barrels of oil which is an 11.7 percent increase compared to the same period
in 2009. � For the year, Petrodelta produced approximately 8.6 million
barrels of oil, an increase of 9 percent over the previous year.
� During 2010, Petrodelta also sold 2.2 billion cubic feet (BCF) of
natural gas, a decrease of 50 percent from 2009. � The average sales
price for Petrodelta's crude oil production was $70.57 per
barrel, 22 percent higher than 2009, and the average sales price received for
natural gas remains contractually fixed at $1.54 per
thousand cubic feet. � Petrodelta's average production rate during 2010
was 23,455 barrels of oil per day (BOPD).
Harvest
is reporting a reserve increase attributable to Petrodelta. � 2P
reserves net to Harvest in Venezuela
have increased to 103.6 MMBOE at December 31, 2010,
a 24 percent increase over year end 2009. � Proved reserves net to
Harvest in Venezuela
increased to 50.0 MMBOE at December� 31, 2010, an 8 percent increase
over year end 2009. � Proved, probable and possible reserves (3P) stand
at 220.6 MMBOE at December� 31, 2010, virtually unchanged from last
year. � These reserve additions are the result of successful recent drilling
and the extension of Block 5, a previously unproven fault block in the El
Salto field and recent development drilling success in other fields.
Petrodelta production output for the first quarter of 2011 is
projected to be approximately 29,000 BOPD and the target for the year is
36,000 BOPD. � The 2011 Petrodelta capital budget is expected to be
approximately $220
million with a significant portion of that total
related to infrastructure costs to support the further development of the
Temblador and El Salto fields. � This program should be self-funding at
a WTI oil price of $70
per barrel in 2011. � Petrodelta expects to drill 28 oil wells, two
water injector wells and one gas injector well, and the drilling program
includes utilizing two rigs to drill both development and appraisal wells for
both increasing production capacity and appraising the substantial resource
base.
Petrodelta's first well in the untested Isleno field, Isleno 8,
is expected to begin production this week.
EXPLORATION AND OTHER DEVELOPMENT DRILLING
ACTIVITIES
United
States
Harvest announced its new reserve report on March 2,
2011 regarding its Uinta Basin
reserves in Utah.
� 2P reserves net to Harvest in Utah have
increased to 15.3 MMBOE at December 31, 2010,
compared to 0.4 MMBOE at year end 2009. � Proved reserves net to Harvest
increased to 4.6 MMBOE at December 31, 2010, compared to
0.4 MMBOE at year end 2009. � 3P net to Harvest in Utah
increased to 86.4 MMBOE at December 31, 2010,
compared to 0.4 MMBOE at year end 2009. � On a barrel of oil equivalent
(BOE) basis, approximately 75 percent of the 3P reserves are oil, with the
remainder being associated gas. � The reserve additions are a result of
Harvest's successful Antelope Project delineation drilling program
conducted during 2010 and reflect only the results of the wells completed and
producing at year end 2010 in the proved category. � The 1P, 2P, and 3P
reserves correspond to 43, 203 and 1,207 identified drilling locations,
respectively. � The Harvest net Before Tax Discounted Future Net Income
from the Utah 2P
reserves has increased to approximately $109 million,
and the Harvest net Before Tax Discounted Future Net Income from the Utah 3P
reserves has increased to approximately $617 million.
�
Lower Green River/Upper
Wasatch Oil Delineation and Development Project
We have just completed the drilling of our seventh well in the Lower
Green River/Upper Wasatch project where Harvest is the operator
with a 70 percent working interest. � We have now established production
in five wells, which have cumulatively produced in excess of 90,000 gross
barrels of oil and 120 gross million cubic feet of gas (MMCF) to date.
� The current production capacity of the first four wells combined (Bar
F 1-20-3-2, Kettle 1-10-3-1, ON Moon 1-27-3-2, and Dart 1-12-3-2) is
approximately 475 barrels of oil per day (BOPD) gross. � The fifth well,
the Giles 1-19-3-2, has been recently placed on routine production and is
currently flowing 750 BOPD with 1400 psi flowing tubing pressure on a restricted
choke. � The sixth well, the Yergensen 1-9-3-1 has been hydraulically
fractured and completed and is expected to be placed on production before the
end of March. � The seventh well, the Evans 1-4-3-3 has been drilled and
cased and is pending completion.
We have provided below an update of changes in well activity
since the previous press release:
The Kettle 1-10-3-1 was drilled in the eastern end of our
acreage and commenced production on October 22, 2010.
� The well has produced 12,000 gross barrels of oil and 64 gross MMCF of
gas to date in three producing months, with a most recent gross production
rate of 70 BOPD and 400 thousand cubic feet a day (MCFD) of gas flowing.
� The well is currently shut-in pending connection of the produced gas
to the previously announced new El Paso Midstream Group, Inc. gas
gathering system. � The gathering system is under construction with good
progress being made, and we expect to complete the tie-in of the Kettle in
late March. �
The ON Moon 1-27-3-2 was drilled in the southern portion of our Lower
Green River/Upper Wasatch project and commenced production on November
7, 2010, and has produced 14,000 gross barrels of oil
and 9 gross MMCF of gas to date in 2.5 producing months. � We recently
installed an electric submersible pump (ESP) in the well and it is currently
producing approximately 100 BOPD and 125 MCFD gross of gas on an ESP.
The Dart 1-12-3-2 was drilled in the northern end of our land
position and commenced test production on February 6, 2011.
� The well was placed on production through the tank battery on natural
flow on March
1, 2011. � To date, the well has produced 9,000
gross barrels of oil and 5 gross MMCF of gas. The most recent production rate
on the well was 225 BOPD and 150 MCFD gross with 200 psi flowing tubing
pressure.
The Giles 1-19-3-2 was drilled in the west central portion of
our land position and hydraulically fractured and completed. � The well
went on production on March 14, 2011 through the tank battery.
The Yergensen 1-9-3-1, a one mile offset to the Kettle well, has
been drilled and hydraulically fractured with nine stages. � The tank
battery for this well is under construction, and we expect to place this well
on production before the end of March 2011.
The Evans 1-4-3-3 was drilled to total depth (TD) of 11,500 feet
in the far northwestern portion of our land position and intermediate casing
and a production liner have been run. � The well is scheduled to be
hydraulically fractured in the first half of April 2011.
Based on the results achieved to date, we expect to achieve a
sustained gross Harvest-operated production rate in excess of approximately
1,000 BOPD when the above-mentioned seven wells are all producing routinely
in April
2011.
In addition to the above-mentioned wells, we have built
locations, drilled surface holes, and set surface casing in two additional
wells, the Lamb 1-19-3-1 and the Yergensen 1-18-3-1. � Both of these
wells are being incorporated in our planning for the next round of
development drilling in the Lower Green River/Upper
Wasatch. � We have identified and prioritized our next 14 drilling
locations which will represent the next phase of the drilling program when it
is initiated.
We are also progressing with our permitting efforts on our 170
square mile wide azimuth 3-D Lower Green River/Upper
Wasatch seismic survey anticipated to commence data acquisition in summer
2011. � To date, we have acquired 38 percent of the required landowner
surface permits and have received our Utah State Division of Oil,
Gas, and Mining permit to acquire the data.
Monument Butte Extension
Appraisal and Development Project
We are currently producing from 14 wells in the Monument Butte
Extension project, including 13 wells operated by Newfield Exploration
and one well operated by Harvest. �
The 13 non-operated wells have now produced approximately
360,000 gross barrels of oil and 1.4 gross BCF of gas since inception of
production in December
2009. � Current gross production from the 13 wells
is approximately 450 BOPD and 8 MMCFD of gas. � The most recent well in
the program, the Meagher 10-20-4-2, has produced approximately 10,000 gross
barrels of oil and 9 gross MMCF of gas since inception of production in late December
2010. � The final Newfield operated well in the
approved program, the Stewart 1A-29-4-2, has been drilled and logs appear
favorable. � The well is expected to be completed and placed on
production in March. � Harvest's average working interest in the 13
Newfield-operated wells is approximately 40 percent. �
In addition to the Newfield operated wells, we are now producing
from the Harvest-operated K Moon 2-13-4-3 well (Harvest WI of 60 percent)
which commenced production on February 16, 2011.
� The well has exceeded initial expectations by producing over 2,500
gross barrels of oil flowing in the first 24 days of production. � The
most recent production rate on the well was 75 BOPD and 40 thousand cubic
feet of gas per day (MCFD) gross flowing with 100 psi flowing tubing pressure.
� A pumping unit will be installed in the next few weeks. � This
well is a significant step toward confirming the prospectivity of the Harvest
operated acreage in the Monument Butte Extension project. �
We have identified and prioritized approximately 50 Harvest-operated
drilling locations which will represent the next phase of Monument Butte
Extension drilling when it is initiated. � We have recently submitted
requests for drilling permits for 11 additional upcoming Monument Butte
Extension wells to the Utah Division of Oil, Gas, and Mining for
processing.
Indonesia
The Lariang LG-1 well, the first of two planned exploration
wells, was spud on January� 6, 2011 in the Budong-Budong Block, West
Sulawesi. � The well has been drilled to a depth of 4,527 feet and has
encountered multiple oil and gas shows within the secondary Miocene
objective. Wireline logs, samples of reservoir fluid and pressure data have
confirmed the presence of hydrocarbons and greatly de-risked the exploration
potential of the license. � Drilling operations have taken longer than
anticipated due to a combination of mechanical failures on the rig and having
encountered formations with higher pressures than expected. � To control
the well, the 121/4 inch hole was drilled with 15.8 pounds per gallon mud.
� A cementing unit failure and the subsequent remedial actions
necessitated the installation of a 7 inch casing string 100 feet below the
9-5/8 casing shoe. � We are currently drilling below 4,600 feet and will
drill ahead to test the primary Eocene targets with a planned total measured
depth of approximately 7,200 feet.
Dussafu Project - Gabon
("Dussafu PSC")
Plans for the drilling of the Ruche Marin-A exploration well
have progressed with the aim to spud the well in April 2011.
� A Letter of Intent has been agreed with Transocean for a
one well contract using the Sedneth 701 semi-submersible drilling unit and
the rig contract is currently under negotiation. � We have completed the
rig inspection and pending resolution of the inspection issues, the rig move
to the location. � Long lead items (Casing and Subsea Wellhead) required
for drilling have been purchased and have either arrived in country or are en
route to Gabon.
� An operational and logistics base has been established in Port Gentil.
� The Ruche Marin-A well will be drilled in a water depth of 380 feet to
test multiple stacked pre-salt targets to a planned total measured depth of
approximately 10,100 feet.
Reserves Disclosure
The proved, probable and possible reserves included herein were
prepared by Ryder
Scott and conform to the definitions as set forth in
the Securities and Exchange Commission's (SEC) Regulations Part
210.4-10(a). � The hydrocarbon prices used are based on SEC
price parameters using the average prices during the 12-month period prior to
the ending date of the reserve report, determined as the unweighted
arithmetic averages of the prices in effect on the first-day-of-the-month for
each month within such period, unless prices were defined by contractual
arrangements. � Reserves are "estimated remaining quantities of oil
and gas and related substances anticipated to be economically producible, as
of a given date, by application of development projects to known
accumulations." � All reserve estimates involve an assessment of
the uncertainty relating the likelihood that the actual remaining quantities
recovered will be greater or less than the estimated quantities determined as
of the date the estimate is made. � The uncertainty depends chiefly on
the amount of reliable geologic and engineering data available at the time of
the estimate and the interpretation of these data. � The relative degree
of uncertainty may be conveyed by placing reserves into one of two principal
classifications, either proved or unproved. � Unproved reserves are less
certain to be recovered than proved reserves and may be further
sub-classified as probable and possible reserves to denote progressively
increasing uncertainty in their recoverability. �
Proved oil and gas reserves are those quantities of oil and gas
which, by analysis of geoscience and engineering data, can be estimated with
reasonable certainty to be economically producible from a given date forward.
� If deterministic methods are used, the SEC has defined
reasonable certainty for proved reserves as a "high degree of confidence
that the quantities will be recovered." � Probable reserves are
"those additional reserves that are less certain to be recovered than
proved reserves but which, together with proved reserves, are as likely as
not to be recovered." � Possible reserves are "those
additional reserves which are less certain to be recovered than probable
reserves" and thus the probability of achieving or exceeding the proved
plus probable plus possible reserves is low.
The reserves included herein were estimated using deterministic
methods and presented as incremental quantities. � Under the
deterministic incremental approach, discrete quantities of reserves are
estimated and assigned separately as proved, probable or possible based on their
individual level of uncertainty. � Because of the differences in
uncertainty, caution should be exercised when aggregating quantities of oil
and gas from different reserves categories. � Furthermore, the reserves
and income quantities attributable to the different reserve categories that
are included herein have not been adjusted to reflect these varying degrees
of risk associated with them and thus are not comparable.
Reserve estimates will generally be revised only as additional
geologic or engineering data become available or as economic conditions
change. � For proved reserves, the SEC states that "as
changes due to increased availability of geoscience (geological, geophysical,
and geochemical), engineering, and economic data are made to the estimated
ultimate recovery (EUR) with time, reasonably certain EUR is much more likely
to increase or remain constant than to decrease." � Moreover,
estimates of proved, probable and possible reserves may be revised as a
result of future operations, effects of regulation by governmental agencies
or geopolitical or economic risks. � Therefore, the proved, probable and
possible reserves included in this report are estimates only and should not
be construed as being exact quantities, and if recovered, the revenues there
from, and the actual costs related thereto, could be more or less than the
estimated amounts.
Non-GAAP Financial Measures
In this press release, Petrodelta's EBITDA disclosure is not
presented in accordance with accounting principals generally accepted in the United States
(GAAP) and Petrodelta's financials are not intended to be used in lieu of
GAAP presentations of net income or cash flows from operating activities.
� EBITDA is presented because we believe it provides additional
information with respect to both the performance of our fundamental business
activities as well as our ability to meet our future capital expenditures and
working capital requirements. � We also believe that financial analysts
commonly use EBITDA to analyze Petrodelta's performance. � Although we
present selected items that we consider in evaluating our performance, you
should also be aware that the items presented do not represent all items that
affect comparability between the periods presented. Variations in our operating
results are also caused by changes in volumes, prices, exchange rates and
numerous other factors. These types of variations are not separately
identified in this release, but will be discussed, as applicable, in
management's discussion and analysis of operating results in our 2010 Form
10-K.
A reconciliation of EBITDA to net income and cash flows from
operating activities for the periods presented is included in the tables
attached to this release.
Conference call
Harvest will hold a conference call at 10:00 a.m. Central Time on Wednesday,
March� 16, 2011, during which management will discuss Harvest's 2010
fourth quarter and year-end results. � The conference leader will be James
A. Edmiston, President and Chief Executive Officer.
� To access the conference call, dial 719-325-2413 or 888-208-1812, five
to ten minutes prior to the start time. � At that time you will be asked
to provide the conference number, which is 3953835. � A recording of the
conference call will also be available for replay at 719-457-0820, passcode
� 3953835, until March 26, 2010. �
The Company intends to file its 2010 Form 10-K with the Securities
and Exchange Commission on Wednesday, March 16, 2011.
� A copy of the Form 10-K will be available on the Company's website at www.harvestnr.com.
The conference call will also be transmitted over the internet
through the Company's website at www.harvestnr.com.
To listen to the live webcast, enter the web site fifteen minutes before the
call to register, download and install any necessary audio software. For
those who cannot listen to the live broadcast, a replay of the webcast will
be available beginning shortly after the call, and will remain on the web site
for approximately 90 days.
About Harvest
Natural Resources
Harvest
Natural Resources, Inc., headquartered in Houston, Texas,
is an independent energy company with principal operations in Venezuela,
producing and exploration assets in the United States,
exploration assets in Indonesia, West Africa
and China and Oman and
business development offices in Singapore
and the United Kingdom.
� For more information visit the Company's website at www.harvestnr.com.
CONTACT:
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Stephen C. Haynes
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Vice President, Chief Financial Officer
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(281) 899-5716
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This press release may contain projections and other
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. � They include estimates and timing of expected oil and gas
production, oil and gas reserve projections of future oil pricing, future
expenses, planned capital expenditures, anticipated cash flow and our
business strategy. � All statements other than statements of historical
facts may constitute forward-looking statements. � Although Harvest
believes that the expectations reflected in such forward-looking statements
are reasonable, it can give no assurance that such expectations will prove to
have been correct. � Actual results may differ materially from Harvest's
expectations as a result of factors discussed in Harvest's 2010 Annual Report
on Form 10-K and other public filings.
HARVEST NATURAL RESOURCES,
INC.
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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December 31,
|
December 31,
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|
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|
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2010
|
2009
|
|
|
|
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|
|
|
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ASSETS:
|
|
|
|
|
|
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|
|
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CURRENT ASSETS:
|
|
|
|
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Cash and cash equivalents
|
|
$ � � �
� 58,703
|
$ � � �
� 32,317
|
|
|
Accounts and notes receivable, net
|
|
|
|
|
|
|
Oil and gas revenue receivable
|
|
1,907
|
166
|
|
|
|
Joint interest and other
|
|
2,325
|
8,047
|
|
|
|
Notes receivable
|
|
3,420
|
3,265
|
|
|
Advances to equity affiliate
|
|
1,706
|
4,927
|
|
|
Prepaid expenses and other
|
|
4,793
|
2,214
|
|
|
|
Total current assets
|
|
72,854
|
50,936
|
|
|
|
|
|
|
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OTHER ASSETS�
|
2,477
|
3,613
|
|
|
|
|
|
|
|
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INVESTMENT IN EQUITY AFFILIATES�
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287,933
|
233,989
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PROPERTY AND EQUIPMENT, net�
|
124,980
|
60,241
|
|
|
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|
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TOTAL ASSETS
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$ � �
� 488,244
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$ � �
� 348,779
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LIABILITIES AND EQUITY:
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CURRENT LIABILITIES:
|
|
|
|
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Joint interest and royalty payable
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$ � � �
� � � 675
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$ � � �
� � � � -
|
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Accounts payable, trade and other
|
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2,530
|
696
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|
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Accounts payable, carry obligation
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|
8,395
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-
|
|
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Accrued expenses
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15,087
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9,920
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Accrued Interest
|
896
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4,691
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Income taxes payable
|
72
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1,090
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Total current liabilities
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27,655
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16,397
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OTHER LIABILITIES�
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1,834
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333
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LONG-TERM DEBT
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81,237
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-
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ASSET RETIREMENT OBLIGATION�
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663
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50
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COMMITMENTS AND CONTINGENCIES�
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-
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-
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EQUITY:
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STOCKHOLDERS' EQUITY:
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Common stock and paid-in capital�
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230,763
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213,732
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Retained earnings�
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141,584
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126,244
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Treasury stock
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(65,543)
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(65,383)
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Total Harvest stockholders' equity �
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306,804
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274,593
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Noncontrolling Interest
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70,051
|
57,406
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Total Equity
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376,855
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331,999
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY�
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$ � �
� 488,244
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$ � �
� 348,779
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HARVEST NATURAL RESOURCES,
INC.
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CONSOLIDATED STATEMENTS OF
OPERATIONS
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(in thousands except per
share amounts, unaudited)
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Three months Ended December
31,
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Twelve months Ended December
31,
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2010
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2009
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2010
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2009
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REVENUE:
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� Oil sales
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$ � 2,027
|
$ � � 165
|
$ � 9,243
|
$ � � 165
|
|
� Gas sales
|
712
|
16
|
1,453
|
16
|
|
|
2,739
|
181
|
10,696
|
181
|
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
� Lease operating costs and production taxes
|
675
|
-
|
1,846
|
-
|
|
� Depletion
|
1,118
|
29
|
3,300
|
29
|
|
� Depreciation, and amortization
|
133
|
125
|
517
|
407
|
|
� Exploration expense
|
2,687
|
2,509
|
8,016
|
7,824
|
|
� General and administrative
|
7,820
|
2,889
|
26,660
|
21,854
|
|
� Taxes other than on income
|
332
|
260
|
1,048
|
1,026
|
|
|
12,765
|
5,812
|
41,387
|
31,140
|
|
LOSS FROM OPERATIONS
|
(10,026)
|
(5,631)
|
(30,691)
|
(30,959)
|
|
|
|
|
|
|
|
OTHER NON-OPERATING INCOME (EXPENSE)
|
|
|
|
|
|
� Investment earnings and other
|
163
|
261
|
557
|
1,168
|
|
� Interest expense
|
(1,368)
|
(5)
|
(2,689)
|
(5)
|
|
� Other non-operating expense
|
(3,952)
|
-
|
(3,952)
|
-
|
|
� Loss on exchange rate
|
(39)
|
(27)
|
(1,588)
|
(83)
|
|
|
(5,196)
|
229
|
(7,672)
|
1,080
|
|
NET LOSS BEFORE INCOME TAXES
|
(15,222)
|
(5,402)
|
(38,363)
|
(29,879)
|
|
� Income tax expense (benefit)
|
(1,016)
|
37
|
(184)
|
1,182
|
|
NET LOSS FROM CONSOLIDATED COMPANIES
|
(14,206)
|
(5,439)
|
(38,179)
|
(31,061)
|
|
Net income from unconsolidated equity affiliates
|
12,734
|
13,981
|
66,164
|
35,757
|
|
NET INCOME (LOSS )
|
(1,472)
|
8,542
|
27,985
|
4,696
|
|
Less: � Net Income Noncontrolling Interest
|
2,491
|
3,467
|
12,645
|
7,803
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO HARVEST
|
$ (3,963)
|
$ 5,075
|
$ 15,340
|
$ (3,107)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO HARVEST PER
COMMON SHARE:
|
|
|
|
|
|
� Basic
|
$ � (0.12)
|
$ � 0.15
|
$ � � 0.46
|
$ � (0.09)
|
|
� Diluted
|
$ � (0.12)
|
$ � 0.15
|
$ � � 0.43
|
$ � (0.09)
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
� Basic
|
33.9
|
33.2
|
33.5
|
33.1
|
|
� Diluted
|
33.9
|
33.5
|
39.3
|
33.1
|
|
|
|
|
|
|
|
HARVEST NATURAL RESOURCES,
INC.
|
|
CONSOLIDATED STATEMENTS OF
CASH FLOWS
|
|
(in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Twelve months Ended December
31,
|
|
|
|
|
2010
|
2009
|
|
Cash Flows From Operating Activities:
|
|
|
|
|
Net Income
|
$ � � �
� � � � � � � � �
� � � 27,985
|
$ � � �
� � � � � � � � �
� � � � � 4,696
|
|
|
Adjustments to reconcile net income to net cash
|
|
|
|
|
� used in operating activities:
|
|
|
|
|
|
Depletion, depreciation and amortization
|
3,817
|
436
|
|
|
|
Amortization of debt financing costs
|
793
|
-
|
|
|
|
Write off of deferred financing costs
|
2,795
|
-
|
|
|
|
Amortization of discount on debt
|
359
|
-
|
|
|
|
Net income from unconsolidated equity affiliate
|
(66,164)
|
(35,757)
|
|
|
|
Non-cash compensation related charges
|
4,234
|
4,087
|
|
|
Dividends received from unconsolidated equity
affiliate
|
12,220
|
-
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Accounts and notes receivable
|
3,826
|
92
|
|
|
|
Advances to equity affiliate
|
3,221
|
(1,195)
|
|
|
|
Prepaid expenses and other
|
(2,579)
|
(1,055)
|
|
|
|
Joint interest and royalty payable
|
675
|
-
|
|
|
|
Accounts payable
|
1,835
|
(966)
|
|
|
|
Accrued expenses
|
5,738
|
(6,629)
|
|
|
|
Accrued Interest
|
(4,534)
|
-
|
|
|
|
Other liabilities
|
1,501
|
333
|
|
|
|
Income taxes payable
|
(1,018)
|
1,013
|
|
|
|
Net Cash Used In Operating Activities
|
(5,296)
|
(34,945)
|
|
Cash Flows From Investing Activities:
|
|
|
|
|
Additions of property and equipment
|
(59,619)
|
(28,022)
|
|
|
Investment costs
|
558
|
(581)
|
|
|
|
Net Cash Used In Investing Activities
|
(59,061)
|
(28,603)
|
|
Cash Flows From Financing Activities:
|
|
|
|
|
Net proceeds from issuances of common stock
|
1,674
|
386
|
|
|
Proceeds from issuance of long-term debt
|
92,000
|
-
|
|
|
Financing costs
|
(2,931)
|
(1,686)
|
|
|
|
Net Cash Provided by (Used In) Financing Activities
|
90,743
|
(1,300)
|
|
|
|
Net Increase (Decrease) in Cash
|
26,386
|
(64,848)
|
|
Cash and Cash Equivalents at Beginning of Period
|
32,317
|
97,165
|
|
Cash and Cash Equivalents at End of Period
|
$ � � �
� � � � � � � � �
� � � 58,703
|
$ � � �
� � � � � � � � �
� � � � 32,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PETRODELTA, S. A.
|
|
|
STATEMENTS OF OPERATIONS
|
|
|
(in thousands except per BOE
and per share amounts, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three months Ended December
31, 2010
|
Three months Ended December
31, 2009
|
|
|
|
|
|
|
|
|
|
Barrels of oil sold
|
2,419
|
|
2,165
|
|
|
|
MCF of gas sold
|
424
|
|
764
|
|
|
|
� � � Total BOE
|
2,490
|
|
2,292
|
|
|
|
� � � Total BOE - Net of 33%
Royalty
|
1,660
|
|
1,528
|
|
|
|
|
|
|
|
|
|
|
Average price/barrel
|
$ � � 75.15
|
|
$70.00
|
|
|
|
Average price/mcf
|
$1.54
|
|
$1.54
|
|
|
|
|
|
|
|
|
|
|
|
$
|
$/BOE - net
|
$
|
$/BOE - net
|
|
|
REVENUES:
|
|
|
|
|
|
|
� Oil sales
|
$ 181,790
|
|
151,559
|
|
|
|
� Gas sales
|
653
|
|
1,170
|
|
|
|
� Royalties
|
(62,465)
|
|
(54,377)
|
|
|
|
|
119,978
|
72.27
|
98,352
|
64.37
|
|
|
EXPENSES:
|
|
|
|
|
|
|
� Operating expenses
|
13,983
|
8.42
|
6,732
|
4.41
|
|
|
� Workovers
|
7,273
|
4.38
|
-
|
-
|
|
|
� Depletion, depreciation, amortization
|
10,907
|
6.57
|
9,951
|
6.51
|
|
|
� General and administrative
|
9,468
|
5.70
|
(1,812)
|
(1.19)
|
|
|
� Windfall profits tax
|
11,201
|
6.75
|
882
|
0.58
|
|
|
� Taxes than on income
|
(4,464)
|
(2.69)
|
(2,789)
|
(1.83)
|
|
|
|
48,368
|
29.13
|
12,964
|
8.48
|
|
|
INCOME FROM OPERATIONS
|
71,610
|
43.14
|
85,388
|
55.89
|
|
|
|
|
|
|
|
|
|
Loss on exchange rate
|
(36,070)
|
(21.73)
|
-
|
-
|
|
|
Interest earnings and other
|
293
|
0.18
|
-
|
-
|
|
|
Interest expense
|
(26,767)
|
(16.13)
|
(3,617)
|
(2.37)
|
|
|
|
|
|
|
|
|
|
Income before income tax
|
9,066
|
5.46
|
81,771
|
53.52
|
|
|
|
|
|
|
|
|
|
� Current income tax expense (benefit)
|
(4,956)
|
(2.99)
|
37,417
|
24.49
|
|
|
� Deferred income tax expense (benefit)
|
6,201
|
3.74
|
(4,402)
|
(2.88)
|
|
|
NET INCOME
|
7,821
|
4.71
|
48,756
|
31.91
|
|
|
Adjustment to reconcile to reported Net Income from
|
-
|
|
|
|
|
|
� � Unconsolidated Equity Affiliate:
|
|
|
|
|
|
|
� � � � � Deferred
income tax expense (benefit)
|
(25,436)
|
|
6,418
|
|
|
|
� � � � � Net income
equity affiliate
|
33,257
|
|
42,338
|
|
|
|
Equity interest in unconsolidated equity affiliate
|
40%
|
|
40%
|
|
|
|
Income before amortization of excess basis in
equity affiliate
|
13,303
|
|
16,935
|
|
|
|
� � Amortization of excess basis in
equity affiliate �
|
(394)
|
|
(363)
|
|
|
|
� � Conform depletion expense to GAAP
|
(175)
|
|
(285)
|
|
|
|
Net income from unconsolidated equity affiliate
|
$ � 12,734
|
|
$ 16,287
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconcile NET INCOME as reported under IFRS to
adjusted EBITDA:
|
|
|
|
|
|
|
� NET INCOME
|
$ � � 7,821
|
4.71
|
$ 48,756
|
31.91
|
|
|
� Add back non-cash items:
|
|
|
|
|
|
|
� � � Depletion, depreciation and
amortization
|
10,907
|
6.57
|
9,951
|
6.51
|
|
|
� � � Pension liability, net of
tax
|
123
|
0.07
|
(8,346)
|
(5.46)
|
|
|
� � � Deferred income tax expense
(benefit)
|
6,201
|
3.74
|
(4,402)
|
(2.88)
|
|
|
Special Charges, net of tax
|
18,035
|
10.87
|
-
|
-
|
|
|
|
|
|
|
|
|
|
CASH FROM OPERATIONS
|
43,087
|
25.96
|
45,959
|
30.08
|
|
|
|
|
|
|
|
|
|
� Interest expense
|
26,767
|
16.13
|
3,617
|
2.37
|
|
|
� Current income tax expense
|
(4,956)
|
(2.99)
|
37,417
|
24.49
|
|
|
|
|
|
|
|
|
|
� Adjusted EBITDA (IFRS)
|
$ � 64,898
|
39.10
|
$ 86,993
|
56.94
|
|
|
|
|
|
|
|
|
|
PETRODELTA, S. A.
|
|
|
STATEMENTS OF OPERATIONS
|
|
|
(in thousands except per BOE
and per share amounts, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Twelve months Ended December
31, 2010
|
Twelve months Ended December
31, 2009
|
|
|
|
|
|
|
|
|
|
Barrels of oil sold
|
8,561
|
|
7,835
|
|
|
|
MCF of gas sold
|
2,204
|
|
4,397
|
|
|
|
� � � Total BOE
|
8,928
|
|
8,568
|
|
|
|
� � � Total BOE - Net of 33%
Royalty
|
5,953
|
|
5,712
|
|
|
|
|
|
|
|
|
|
|
Average price/barrel
|
$70.57
|
|
$57.62
|
|
|
|
Average price/mcf
|
$1.54
|
|
$1.54
|
|
|
|
|
|
|
|
|
|
|
|
$
|
$/BOE - net
|
$
|
$/BOE - net
|
|
|
REVENUES:
|
|
|
|
|
|
|
� Oil sales
|
$ 604,173
|
|
$ 451,473
|
|
|
|
� Gas sales
|
3,398
|
|
6,778
|
|
|
|
� Royalties
|
(204,688)
|
|
(156,799)
|
|
|
|
|
402,883
|
67.68
|
301,452
|
52.77
|
|
|
EXPENSES:
|
|
|
|
|
|
|
� Operating expenses
|
44,749
|
7.52
|
48,159
|
8.43
|
|
|
� Workovers
|
8,910
|
1.50
|
152
|
0.03
|
|
|
� Depletion, depreciation, amortization
|
40,429
|
6.79
|
33,666
|
5.89
|
|
|
� General and administrative
|
15,508
|
2.60
|
9,750
|
1.71
|
|
|
� Windfall profits tax
|
14,116
|
2.37
|
882
|
0.15
|
|
|
|
123,712
|
20.78
|
92,609
|
16.21
|
|
|
INCOME FROM OPERATIONS
|
279,171
|
46.90
|
208,843
|
36.56
|
|
|
|
|
|
|
|
|
|
Gain on exchange rate
|
84,448
|
14.19
|
-
|
-
|
|
|
Interest earnings and other
|
3,179
|
0.53
|
4
|
-
|
|
|
Interest expense
|
(26,767)
|
(4.50)
|
(3,617)
|
(0.63)
|
|
|
|
|
|
|
|
|
|
Income before income tax
|
340,031
|
57.12
|
205,230
|
35.93
|
|
|
|
|
|
|
|
|
|
� Current income tax expense
|
189,780
|
31.88
|
105,868
|
18.53
|
|
|
� Deferred income tax expense (benefit)
|
72,568
|
12.19
|
(43,922)
|
(7.68)
|
|
|
NET INCOME (LOSS)
|
77,683
|
13.05
|
143,284
|
25.08
|
|
|
Adjustment to reconcile to reported Net Income from
|
|
|
|
|
|
|
� � Unconsolidated Equity Affiliate:
|
|
|
|
|
|
|
� � � � � Deferred
income tax expense (benefit)
|
(91,877)
|
|
38,516
|
|
|
|
� � � � � Net income
equity affiliate
|
169,560
|
|
104,768
|
|
|
|
Equity interest in unconsolidated equity affiliate
|
40%
|
|
40%
|
|
|
|
Income before amortization of excess basis in
equity affiliate
|
67,824
|
|
41,907
|
|
|
|
� � Amortization of excess basis in
equity affiliate �
|
(1,414)
|
|
(1,356)
|
|
|
|
� � Conform depletion expense to GAAP
|
(246)
|
|
183
|
|
|
|
Net income from unconsolidated equity affiliate
|
$ � 66,164
|
|
$ � 40,734
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconcile NET INCOME as reported under IFRS to
adjusted EBITDA:
|
|
|
|
|
|
|
� NET INCOME
|
$ � 77,683
|
13.05
|
$ 143,284
|
25.08
|
|
|
� Add back non-cash items:
|
|
|
|
|
|
|
� � � Depletion, depreciation and
amortization
|
40,429
|
6.79
|
33,666
|
5.89
|
|
|
� � � Pension liability, net of
tax
|
123
|
0.02
|
7,209
|
1.26
|
|
|
� � � Deferred income tax expense
(benefit)
|
72,568
|
12.19
|
(43,922)
|
(7.68)
|
|
|
Special Charges, net of tax
|
1,602
|
0.27
|
-
|
-
|
|
|
|
|
|
|
|
|
|
CASH FROM OPERATIONS
|
192,405
|
32.32
|
140,237
|
24.55
|
|
|
|
|
|
|
|
|
|
� Interest expense
|
26,767
|
4.50
|
3,617
|
0.63
|
|
|
� Current income tax expense
|
86,596
|
14.54
|
105,868
|
18.53
|
|
|
|
|
|
|
|
|
|
� Adjusted EBITDA (IFRS)
|
$ 305,768
|
51.36
|
$ 249,722
|
43.71
|
|
|
|
|
|
|
|
|
|
SOURCE Harvest Natural
Resources, Inc.
|