Harvest Natural Resources Unveils 2010 E&P Plans
Harvest Natural Resources provided an operational update and overview of its 2010 exploration and production plans for its 32 percent owned Venezuelan affiliate, Petrodelta, S.A.(Petrodelta) as well as for Harvest's U.S. and international exploration portfolio.
Petrodelta produced approximately 7.8 million barrels of oil in 2009; an increase of 42.3 percent over 2008. Production was initiated from the El Salto field with the drilling and completion of the ELS-31 well which has produced 364,000 barrels of oil in the past six months.
Petrodelta's combined proved, probable and possible reserves net to Harvest increased by approximately 59 percent to 211.1 million barrels of oil equivalent (MMBOE) at August 31, 2009 from 132.4 MMBOE at December 31, 2008. By category and net to Harvest, proved, probable and possible reserves increased by approximately 10 percent, 35 percent and 104 percent, respectively.
A self-funded capital budget of $205 million has been approved for Petrodelta primarily for infrastructure costs for further developing the Temblador and El Salto oil fields; Petrodelta's production target for 2010 is 30,000 barrels of oil per day (BOPD) with a first quarter average of 23,500 BOPD.
During 2009 the Bar F well, located in Duchesne County, Utah, was drilled and logged at a total depth of 17,566 feet and an extended production testing program is now in progress. Testing is expected to be completed in first quarter of 2010 with further appraisal and development activity dependent on test results.
Harvest commenced production from an eight well appraisal and development drilling program in the Green River formation in the southern portion of Harvest's Antelope land position in late 2009. Three wells are currently on production and produced at a combined average gross production rate of 1,600 BOPD and 1.8 MMCFD over the last seven days of production.
Location construction and rig mobilization has begun with an anticipated spud of the first of two exploration wells in the Budong-Budong block scheduled for mid-March.
Contingent upon successful test results in Utah and Indonesia, Harvest has planned capital expenditures of up to $111.0 million to evaluate and develop the Company's prospect portfolio in the United States and international locations, excluding Venezuela's self funding program. Additionally, we will be evaluating financing options during 2010 to fund planned projects.
Harvest President and Chief Executive Officer, James A. Edmiston, said, "The interim reserve report was commissioned primarily to independently reassess the growth potential of the El Salto field and to provide input into Petrodelta's capital budget process for 2010 and beyond". He continued, "Coming off successful appraisal drilling in the El Salto field, and proving the potential of 3,000 BOPD from its first producing well in that field, Petrodelta will continue its drilling program in El Salto. It will also begin construction of the infrastructure which will permit early production rates of over 10,000 BOPD which are expected to occur from El Salto by 2011. Petrodelta will also continue development of the Temblador field, currently producing 8,500 BOPD, and will begin appraisal drilling of the Isleno field. Based on proven reserves only, Petrodelta gross oil production would reach a level over 50,000 BOPD by 2014. Given the substantial incremental resources identified in the probable and possible categories, we think Petrodelta has outstanding prospects for growth well beyond that level."
Edmiston added, "In 2009, we continued to mature and progress our relatively extensive exploration portfolio globally, substantially increased production in Venezuela and established our first U.S. oil production in Utah. Over the course of the next six months, we expect to have in hand the results of the initial exploratory results in Utah and Indonesia and our 2010 planned capital expenditures are largely contingent upon those results. Either of these projects have the potential to significantly increase Harvest's reserves and production over the coming years. Additionally, we expect that with expanded infrastructure investment, our Venezuelan assets will begin to accelerate production from the substantial reserve base in the Temblador and El Salto fields."