Harvest Natural Resources Operational Update and 2009 Planned Expenditures
HOUSTON, Jan 13, 2009 /PRNewswire-FirstCall via COMTEX News Network/ --
Harvest Natural Resources, Inc. (NYSE: HNR) today announced guidance for its 32
percent owned Venezuelan affiliate, Petrodelta, S.A.(Petrodelta) and planned
expenditures for Harvest's 2009 U.S. and international exploration program.
Highlights and guidance for 2009 include:
-- Oil production rates from Venezuela expected to
average approximately
16,000 barrels of oil per day for
self-funding operations. First
quarter production rate expected to
be approximately 18,000 barrels per
day to comply with the Venezuelan
government's market allocations
of the OPEC quota.
-- Planned exploration expenditures set at $38.8
million to evaluate the
Company's prospect portfolio in the
United States and international
locations;
-- Current financial resources are sufficient to fund
all budgeted
expenditures and maintain a cash
reserve without having to raise
additional capital;
-- Harvest has successfully reduced its common stock
outstanding to
proximately 32.9 million shares as
of December 31, 2008.
-- Harvest has no debt.
VENEZUELA
During 2008, Petrodelta drilled and completed seven development wells, produced
approximately 5.5 million barrels of oil and sold 10.7 billion cubic feet (BCF)
of natural gas. Petrodelta has been advised by the Venezuelan government
that 2009 production objective will be approximately 16,000 barrels of oil per
day effective January 1, 2009, following the December 17, 2008 OPEC meeting
establishing new production quotas. Petrodelta's production output for
the first quarter of 2009 is projected to be 18,000 barrels per day to comply
with the Venezuelan government's market allocations of the OPEC quota for the
country.
Petrodelta shareholders have agreed the company will remain self-funding and
rely on internally-generated cash flow to fund operations. The management
and board of Petrodelta have taken actions to reduce both operating and capital
expenditures. Currently, Petrodelta has two drilling rigs operating in
the Uracoa and Temblador fields and has released three additional drilling
rigs. For 2009, the initial drilling program includes utilizing two rigs
to drill both development and appraisal wells for both maintaining production
capacity and appraising the substantial resource bases in the presently
non-producing Isleno and El Salto fields.
Harvest President and CEO James Edmiston said, "The management of
Petrodelta will closely monitor market conditions and stands ready to increase
its development drilling campaign as oil prices improve and/or production
limitations are lifted." Mr. Edmiston continued, "Petrodelta
will also begin the appraisal and testing of its large portfolio of undeveloped
resources in Venezuela during 2009. Recent advances in drilling
performance have cut drilling and completion times to 16 days over the past 3
months, so even with reduced levels of drilling activity, we expect the planned
development and appraisal program to result in stable production and cash flow
while increasing proved reserves during 2009."
EXPLORATION ACTIVITIES
During 2008, Harvest entered into exploration projects in Indonesia, Gabon and
the United States. In 2009, Harvest projects exploration activities to
cost approximately $38.8 million (net), including the drilling of two
exploratory wells.
Starks Project
Hunter # 1 Well - Calcasieu Parish, Louisiana - United States
Harvest drilled the Hunter #1 Well in Calcasieu Parish, Louisiana in the fourth
quarter of 2008 and commenced a testing program to evaluate three potentially
productive reservoir horizons in the Vicksburg formation identified from well
logs. All three zones were tested without achieving commercial flow of
hydrocarbons. As a result, the well is currently being plugged and
abandoned.
Antelope Project - United States
Harvest plans to drill a deep gas exploration well to test a gas prospect in
the Rockies and expects to spud the well in mid-2009. To date, Harvest
and its partner have acquired approximately 40,000 net acres in the Antelope
prospect area and continue to build their land position. Harvest is the
operator and has a 50% working interest in the prospect. Harvest will
fund 100% of the cost of the first test well. The projected 2009 capital
expenditures for leasehold acquisition and exploratory drilling are $18.3
million.
West Bay Project - United States
Harvest has submitted to the Army Corps of Engineers Galveston District an
Application for Department of Army Permit to install structures for drilling
and production of oil and gas in West Bay. This permit is required to
allow drilling of the initial exploration well on the West Bay Project.
The initial exploration well will be drilled to a depth of approximately 18,000
feet to test a large section of normal and over-pressured Frio and Vicksburg
sands on the flanks of an untested, deep-seated salt dome. Drilling is
expected to commence upon receipt of the requisite permit from the Corps of
Engineers, which Harvest expects to obtain in late 2009 or early
2010. The expected capital expenditures for this project in 2009
are $0.5 million.
Budong-Budong Project, Indonesia
In December 2008 the acquisition program of 650 km 2D seismic was
completed. The data is currently being processed. Interpretation of
the data and well planning will take place in the first quarter of 2009.
It is expected that the first of two exploration wells will spud in the second
half of 2009. In accordance with the farm-in agreement Harvest expects to
fund 100% of the well expenditures to earn its 47% working interest up to a cap
of $10.7 million; thereafter, Harvest pays in proportion to its working interest.
The 2009 capital project costs for the first exploratory well are $8.1 million
(net).
Dussafu Project - Gabon
Harvest will spend approximately $0.4 million (net) in seismic processing costs
and engineering studies to advance the program to a decision on one conditional
exploratory well to be drilled in 2010 relating to the Dussafu Block in
Gabon. If the decision is made to drill the conditional well, Harvest
will spend approximately $1.8 million (net) for required drilling materials.
Other International Exploration Projects
Relating to other international projects, Harvest is projecting to spend $2.0
million in leasehold acquisition costs, $4.5 million in seismic acquisition and
processing costs and $3.2 million on other project related costs in 2009.
Mr. Edmiston said, "Our strong balance sheet provides Harvest with the
financial resources to endure this current period of volatility and uncertainty
in the commodity and financial markets. We have sufficient cash on hand
to fully fund our 2009 exploration budget without having to go to the
market. Having no debt, our plans are not limited by any borrowing
agreements. In fact, our strong financial position provides us the
flexibility to consider opportunistic asset acquisitions from other companies seeking
to increase their liquidity. We expect 2009 to be a very busy year for
Harvest as we advance our projects for building long-term shareholder
value."
About Harvest Natural Resources
Harvest Natural Resources, Inc. headquartered in Houston, Texas, is an
independent energy company with principal operations in Venezuela, exploration
assets in the United States, Indonesia, West Africa and China and business
development offices in Singapore and the United Kingdom. For more
information visit the Company's website at http://www.harvestnr.com.
"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 2007 Annual Report on Form 10-K and other public filings."
SOURCE Harvest Natural Resources, Inc.
http://www.harvestnr.com
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Harvest Natural Resources
1177 Enclave Parkway Suite 300
Houston, TX 77077
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