Harvest Signs JV Deal with PDVSA

Harvest Natural and Corporacion Venezolana del Petroleo S.A. have signed the conversion contract relating to the formation of Petrodelta, S.A. in Venezuela. Pursuant to the conversion contract, Harvest Vinccler, S.C.A., an 80-percent-owned Harvest affiliate, will transfer all of its rights under its operating service agreement and its operating assets to Petrodelta upon the formation of Petrodelta and the receipt of a transfer decree. The transfer decree establishes the right to develop the Uracoa, Tucupita and Bombal fields, operated by HVSCA since 1992, and the Isleno, Temblador and El Salto fields recently assigned to Petrodelta. HNR Finance B.V., an 80-percent-owned Harvest affiliate, will own 40 percent of Petrodelta and CVP, a 100-percent-owned PDVSA affiliate, will own the remaining 60 percent. Petrodelta will operate the fields under a 20-year grant from the Venezuelan government.

Harvest President and Chief Executive Officer, James A. Edmiston, said, "Upon receipt of the transfer decree when signed by President Chavez, the conversion process will be complete. Subsequently, Petrodelta will invoice PDVSA for oil and gas delivered from April 1, 2006 through June 30, 2007. Net of one-third royalty, estimated revenue for the oil and gas delivered is approximately $275 million. After providing for operating expenses and taxes since April 2006 and providing for working capital to fund future operational and capital costs, we expect Petrodelta to distribute the balance of funds to Harvest and CVP."

CVP President and PDVSA Director, Eulogio Del Pino, said, "Petrodelta is a key mixed company with substantial growth potential. The addition of the Isleno, Temblador and El Salto fields provides Petrodelta with an asset base to significantly increase production over the next three to four years."