HOUSTON, Jan. 11, 2011 /PRNewswire/ -- Harvest Natural Resources, Inc. (NYSE: HNR) today provided an operational update for its 32-percent-owned Venezuelan affiliate, Petrodelta, S.A. (Petrodelta) as well as for Harvest's domestic and international exploration and development activity.

Venezuela

• Harvest received payment of Petrodelta dividends in the amount of $9.8 million, net to Harvest's 32 percent interest on October 22, 2010;
• In the twelve months ended December 31, 2010, Petrodelta drilled and completed 16 wells and produced approximately 8.6 million barrels of oil (MMBO) for a daily average of approximately 23,600 barrels per day, an increase of 9 percent over the same period in 2009; � 
• Capital expenditures were estimated to be $97.0 million in 2010;
• Petrodelta's current production rate is approximately 28,000 barrels of oil per day (BOPD);
• Production target for 2011 is 36,000 BOPD with a first quarter average of 29,000 BOPD;
• The 2011 capital budget is approximately $224 million, which includes provisions to drill 28 oil wells, two water injector wells, one gas injector well and construction costs for pipeline and related facilities.

United States

• Harvest's net share of production from the Antelope project in Utah totaled approximately 193,100 barrels of oil equivalent (BOE) for the twelve months ended December 31, 2010. � Net production to Harvest during the month of December 2010 was 540 barrels of oil equivalent per day (BOEPD).
• Four wells of a six-well Lower Green River/Upper Wasatch delineation and development drilling program have been successfully drilled with two on production and two expected to be hydraulically fractured in January and February, respectively. Drilling is in progress on the fifth well. � The remaining well will be drilled and completed during the first quarter of 2011.
• Five of the seven wells related to the second phase of the Monument Butte Field Extension project have been drilled to total depth (TD) and are producing at a restricted combined rate of approximately 170 gross BOPD and 2.0 gross million cubic feet per day (MMCFD) of gas. � The sixth well is currently drilling, and the seventh well of the second phase drilling program is expected to be drilled by the end of February 2011.

Indonesia

• The Lariang LG-1 Well was spud on January 6, 2011, in the Budong Budong Block, West Sulawesi. � On January 5, 2011, Harvest exercised its first refusal right to acquire an additional 10 percent equity in the Budong Budong Block PSC.

Gabon

• The Company has issued purchase orders for long lead items required for drilling. � Also, other related drilling contracts are being tendered in preparation to spud the exploration well in the second quarter of 2011. � 

Harvest President and Chief Executive Officer, James A. Edmiston, said, "We are pleased to announce that Petrodelta production is at 28,000 BOPD, which are levels of production not achieved since 2005. � With the recent drilling success in the Temblador and El Salto fields, proved and probable (2P) reserves net to Harvest in Venezuela have increased to 103.0 million barrels of oil equivalent (MMBOE) at September 30, 2010, a 26 percent increase over year-end 2009. � The 2011 Petrodelta capital budget is approximately $224 million with a significant portion of that total related to infrastructure costs for pipeline and related facilities to continue developing the Temblador and El Salto oil fields." � 

Edmiston continued, "Our appraisal and development drilling campaign on our Antelope project in Utah, continues to provide encouraging results. � We have drilled four of the six wells of the Green River/Wasatch appraisal drilling program. � We expect to have these wells completed and fractured by mid February of 2011. � The remaining two wells will be drilled and completed during the first quarter of 2011. � We also expect to complete our seven well Monument Butte Extension drilling program, six wells of which are operated by Newfield Exploration, in February 2011."

Mr. Edmiston concluded, "We are excited to announce commencement of drilling operations on the much anticipated Lariang LG-1 exploration well in Indonesia on January 6, 2011. � The second exploration well is expected to spud during the first quarter of 2011. � Finally, with the $60.0 million credit facility which closed in October of 2010, Harvest has sufficient liquidity to fund our approved drilling programs and pursue the strategic alterative process which was announced in September of 2010."

VENEZUELA

During the twelve months ended December 31, 2010, Petrodelta drilled and completed 16 successful development wells, produced approximately 8.6 MMBO and sold 2.2 billion cubic feet (BCF) of natural gas. � Petrodelta produced an average of 23,455 BOPD during the twelve months ended December 31, 2010. � Currently, Petrodelta is operating two drilling rigs and one workover rig. � In October 2010, Harvest announced another increase in Venezuelan reserves. � The increase is a result of a new reserve report dated September 30, 2010 for the El Salto field, which is the largest of the six fields operated by Petrodelta. � Proved and probable (2P) reserves net to Harvest in Venezuela have increased to 103.0 MMBOE at September 30, 2010, a 26 percent increase over year-end 2009. � Proved reserves net to Harvest in Venezuela increased to 50.4 MMBOE at September 30, 2010, a 10 percent increase over year end 2009. � These reserve additions resulted from the successful recent drilling and the extension of Block 5, a previously proven fault block in the El Salto field. � The reserve report was prepared by the independent petroleum engineering firm of Ryder Scott Company, L.P. (Ryder Scott) at Harvest's request.

Petrodelta's 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 approximately $224 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.

EXPLORATION AND OTHER DEVELOPMENT DRILLING ACTIVITIES

Lower Green River/Upper Wasatch Oil Delineation and Development Project

During 2010, the total net production related to the Lower Green River/Upper Wasatch project was 28,900 BOE. � Results of Harvest's recent drilling activities related to this project are provided below.

Harvest commenced drilling operations in July 2010 on its previously announced Harvest-operated five-well delineation and development drilling program.�  Due to the initial success of the program, a sixth well has been added to the program. � This program represents a follow up to Harvest's first quarter 2010 Lower Green River/Upper Wasatch oil discovery in the Bar F #1-20-3-2 well.� � The six wells will be drilled back to back and have planned TDs of between 10,000 and 12,000 feet each.�  As of January 5, 2011, the program was nearing 65 percent overall completion as detailed below. � Harvest has a 70 percent working interest in the program.

The first well in the program, the Kettle #1-10-3-1, was drilled to 12,000 feet and was hydraulically fractured with nine stages. � The well went on production in late October of 2010 and has produced approximately 12,000 barrels of oil (gross) and 55 MMCF gas (gross) through January 5, 2011. � The well is currently producing through its tank battery at 80 BOPD and 0.45 MMCFD gross flowing. � We anticipate adding artificial lift equipment at some point in the future. � To date, all produced gas has been flared pending gas pipeline connection to the El Paso Midstream Altamont Gas Plant gathering system which is expected to occur in the first quarter of 2011. � More details follow below on the El Paso gathering system arrangements.

The second well, the O.N. Moon #1-27-3-2 was drilled to a TD of 10,169 feet and was hydraulically fractured with nine stages in early November 2010. � The well went on production in early November and has produced approximately 10,000 barrels of oil (gross) and 5 MMCF of gas (gross) to date flowing. � The well is currently producing intermittently on natural flow through its tank battery pending installation of an electric submersible pump in the well which is expected to occur in January 2011.

The third well, the Dart #1-12-3-2, was drilled to a TD of 10,660 feet and is expected to be completed as a producer this month. � Logs on the well are encouraging. � Construction of the tank battery for this well is also in progress.

The fourth well, the Giles #1-19-3-2, has been drilled to 9,753 feet, logged, and cased. � Logs on the well are encouraging and the well is expected to be completed as a producer by mid-February 2011.

The fifth well, the Yergensen #1-9-3-1, a one mile offset from the successful Kettle well is currently drilling toward a projected total depth of 11,500 feet.

The final well of the six well program, the Lamb #1-19-3-1, was spud on November 26, 2010, with a spud rig, and represents a follow up to the apparent success of the Kettle and Dart wells. The well is expected to be drilled to a depth of 11,500 feet by the end of February 2010.

On November 4, 2010, the Company was notified that as a result of two refinery turnarounds in Salt Lake City, the capacity to market our production of yellow wax from the Bar F, the Kettle and the O.N. Moon wells would be temporarily restricted. � The refinery turnaround work has been mostly completed, and markets are gradually in the process of returning to pre-turnaround conditions. � 

On December 21, 2010, Harvest and its partner in the Antelope project entered into a contract with El Paso Midstream Group, Inc. (EPMG) whereby EPMG will provide the capital to build and operate a 25-mile, low-pressure gas gathering pipeline which will provide capacity for the Company's current and future production from Harvest's Lower Green River/Upper Wasatch Development project.� Harvest will provide capital to build flowlines to connect the produced gas from Harvest wells into the EPMG header system.�  As part of the contract arrangement, Harvest and its partner have dedicated approximately 75 percent of their Antelope leasehold to the El Paso contract for 10 years, with a Harvest option to extend the dedication for up to an additional nine years without any change in contract terms.�  The area dedication is limited stratigraphically to the top of the Mesaverde formation, resulting in the Mesaverde deep gas not being included in the dedication.

Monument Butte Extension Appraisal and Development Project

During 2010 the total net production related to the Monument Butte Extension project was 164,200 BOE. � Results of Harvest's recent drilling activities related to this project are provided below.

The six-well Monument Butte Extension development drilling program operated by Newfield Exploration has been increased to allow for drilling of one additional well to be operated by Harvest. � This program is a follow up to a previous successful eight-well program which commenced in 2009. � The program primarily targets the Green River formation, and is generally located immediately adjacent to the block containing the initial eight wells. � The wells are being drilled to total depths ranging from 6,800 to 8,500 feet.�  Harvest has a 37 percent working interest in the six-well program with Newfield, and a 90 percent working interest in the well operated by Harvest.�  The Harvest operated well, the K. Moon #2-13-4-2, is currently drilling toward a projected total depth of 8,500 feet.

Five of the seven planned wells have been drilled, completed, and placed on production.�  As of January 5, 2011, the five wells had produced a combined 36,000 gross barrels of crude and 150 gross MMCF of gas since production commenced in late August 2010.�  The gross current restricted production rate from the combined five wells on December 20, 2010 was approximately 170 BOPD and 2.0 MMCFD of gas.�  The sixth well in the program is currently drilling, and the seventh well is expected to be drilled by February 2011.

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 is projected to drill to a TD of approximately 7,300 feet. � Site preparations are underway for the second exploration well, the Karama KD-1, which is scheduled to spud late in the first quarter of 2011.

On January 5, 2011, Harvest exercised its first refusal right to acquire an additional 10 percent equity in the Budong Budong PSC. � Closing of this acquisition will increase Harvest's interest in the Budong-Budong block to 64.4 percent.

Dussafu Project - Gabon ("Dussafu PSC")

The Dussafu PSC partners and the Republic of Gabon, represented by the Ministry of Mines, Energy, Petroleum and Hydraulic Resources, entered into the second exploration phase of the Dussafu PSC with an effective date of May� 28, 2007. � It has been agreed that the second three-year exploration phase will be extended until May� 27, 2011, at which time the partners can elect to enter a third exploration phase. � In preparation of drilling the exploration well in the second quarter of 2011, the Company has issued purchase orders for long lead items required for drilling. � Also, various service and material contracts are being tendered. � This includes the drilling rig contract. � 

Reserves Disclosure

In December 2008, the SEC issued its final rule, Modernization of Oil and Gas Reporting, which is effective for reporting 2009 and forward reserve information. � The SEC's Modernization of Oil and Gas Reporting allows the disclosure of probable and possible reserves.

Proved reserves are those quantities of oil and gas which through analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward from known reservoirs and under existing economic conditions, operating methods, government regulations, etc., i. e., at prices as described above and costs as of the date the estimates are made. � Prices include consideration of changes in existing prices provided only by contractual arrangements and do not include adjustments based upon expected future conditions. � 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.

Reserves may be estimated using probabilistic methods in which there is at least a 90 percent probability of recovery of proved reserves, at least a 50 percent probability of recovery of probable reserves, and at least a 10 percent probability of recovery of possible reserves. � Harvest's probable reserves were calculated using probabilistic methods and represent the 50 percent probability that the actual quantities recovered will be equal to or greater than the proved plus probable estimate. The larger quantity of proved reserves plus probable reserves, as compared to proved reserves only, is attributable largely to using a less conservative interpretation of reservoir size and recovery factor in estimating probable reserves.

The estimate of reserves is made using available geological and reservoir data as well as production performance data. � These estimates are prepared by an independent third party petroleum engineering consulting firm and revised, either upward or downward, as warranted by additional data. � Revisions are necessary due to changes in, among other things, reservoir performance, prices, economic conditions and governmental restrictions, as well as changes in the expected recovery associated with infill drilling. � Decreases in prices, for example, may cause a reduction in some proved reserves due to reaching economic limits earlier. � A material adverse change in the estimated volumes of proved reserves could have a negative impact on DD&A expense and could result in the recognition of impairment.

In calculating the reserves in this press release, initial production rates are based on the current producing rates for those wells now on production. � Test data and other related information were used to estimate the anticipated initial production rates for those wells or locations that are not currently producing. � If no production decline trend has been established, future production rates were held constant, or adjusted for the effects of curtailment where appropriate, until a decline in ability to produce was anticipated. � An estimated rate of decline was then applied to depletion of the reserves. � If a decline trend has been established, this trend was used as the basis for estimating future production rates. � For reserves not yet on production, sales were estimated to commence at an anticipated date furnished by Harvest to Ryder Scott.

Ryder Scott performed a reserve evaluation on the El Salto field with an effective date of September 30, 2010. � The El Salto field represents approximately 55 percent of proved oil reserves, 87 percent of probable oil reserves and 75 percent of possible oil reserves of Harvest Natural Resources in Venezuela. � Harvest believes that no material changes in remaining reserves have occurred in the other five fields of Petrodelta (Uracoa, Bombal, Tucupita, Isleno and Temblador) since December 31, 2009. � Reserves on these other five fields have been estimated effective September 30, 2010, by subtracting the actual volumes produced and sold during 2010 through September 30, 2010, from the reserves as of December 31, 2009.

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, 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.

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 2009 Annual Report on Form 10-K and other public filings.

SOURCE Harvest Natural Resources, Inc.