Harvest Natural Resources Reveals 2Q Earnings

Harvest Natural Resources has announced 2009 second quarter earnings.

Harvest reported a 2009 second quarter loss of $4.2 million, or $0.13 per share, compared with a loss of $0.6 million, or $0.02 per share, for the same period last year. The second quarter results include exploration charges of $3.5 million, or $0.11 per share. Petrodelta reported second quarter earnings of $34.6 million, $11.1 million net to Harvest's 32 percent interest, under International Financial Reporting Standards (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 $7.0 million. Petrodelta's earnings include a nonrecurring charge of $15.6 million for adjustment to the pension and retirement plan ($5.0 million net to Harvest's 32 percent interest). The pension costs will be paid in future periods as pension benefits are disbursed to retired employees. The impact of this nonrecurring charge, net of tax, to Harvest is $0.07 per share.

Highlights to date for 2009 include:

  • Increased oil production from Petrodelta's self-funded drilling program to an average of 22,057 barrels of oil per day (BOPD), a 62 percent increase over the second quarter of 2008 and a sequential 15 percent increase over the first quarter of 2009. Cash from Operations at Petrodelta was $39.9 million; a 94 percent increase over the prior quarter;
  • Petrodelta drilled two successful appraisal wells in the El Salto field;
  • Commenced drilling the deep 18,000 foot Mesaverde exploration well on Harvest's Antelope project located in the Uinta Basin of northeastern Utah; the well test is being drilled as a tight hole;
  • On schedule to start drilling the first of two exploration wells in our Budong-Budong block in Indonesia in fourth quarter of 2009;
  • Signed an Exploration and Production Sharing Agreement ("EPSA") with the Sultanate of Oman for the Al Ghubar/ Qarn Alam license block, Block 64 on April 11, 2009.

Harvest President and Chief Executive Officer, James A. Edmiston, said, "Petrodelta continues to build upon its successes both in the ongoing development program and the appraisal of the new fields. Until now, the drilling has been focused on the Uracoa and Temblador fields. In the first half of 2009, in addition to the Temblador development wells, activity has progressed on the other undeveloped fields and Petrodelta drilled two successful appraisal wells in the El Salto field. Petrodelta is currently evaluating the impact of these appraisal wells and has commenced pilot production from one of these wells, the El Salto 31 well, at rates in excess of 1,400 barrels of oil per day."

Edmiston continued, "We are excited to have started the exploration drilling operations of our Antelope project in Utah. The Bar F #1-20-3-2 well spud on June 15, 2009. The results of this well may lead to appraisal and development drilling programs on the project, which would likely be undertaken in late 2009 and 2010. The Antelope project is located in a highly productive oil and natural gas province with established production. We believe modern drilling and completion technologies hold the potential to access commercial quantities of hydrocarbons in place that were previously considered difficult to produce. In regards to our Budong-Budong Block in Indonesia, we have completed the technical interpretation and are readying to begin building locations in the third quarter in anticipation of spudding the first of two wells in the fourth quarter."