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HOUSTON, May 8, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Harvest Natural Resources, Inc. (NYSE: HNR) today announced 2009 first quarter earnings and provided an operational update.
Harvest reported a 2009 first quarter loss of $4.8 million, or $0.15 per share, compared with earnings of $1.2 million, or $0.03 per share, for the same period last year. The first quarter results include exploration charges of $1.0 million. Petrodelta reported first quarter earnings of $17.0 million, $5.4 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 $4.2 million.
Highlights to date for 2009 include:
-- Increased oil production from Petrodelta's self-funded drilling
program to an average of 19,200 barrels of oil per day (BOPD), a 44
percent increase over the first quarter of 2008 and a 13 percent
increase over the fourth quarter of 2008. Petrodelta's current
rate of oil production is approximately 24,000 BOPD;
-- Petrodelta commenced an appraisal drilling program in the El Salto
Field;
-- Signed an Exploration and Production Sharing Agreement with Oman for the
Al Ghubar/Qarn Alam license block in April 2009;
-- Leased additional acreage in the Antelope prospect, bringing leased
acreage to 52,000 gross acres (26,000 Harvest net) at the end of the
first quarter. Also, continued preparations for a deep natural gas test
well expected to spud late in the second quarter of 2009.
Harvest President and Chief Executive Officer, James A. Edmiston, said: "Petrodelta has increased oil production through development drilling from 12,200 BOPD in April 2008 to a current rate in excess of 24,000 BOPD. Until now, the drilling has been focused on the Uracoa and Temblador Fields. This month, Petrodelta began appraisal drilling with the first of two wells in the El Salto Field which has discovered oil in place of 3.6 billion barrels. Petrodelta will also drill an appraisal well in the Isleno Field later this year. We believe these fields offer significant growth potential to Petrodelta, as the company continues to pursue growth in both production and reserves."
Edmiston continued, "In the first quarter, we also made significant progress in our previously announced exploration programs and we remain on track to test the Antelope block in Utah and the Budong Budong block in Indonesia this year. In April, we celebrated the signing of the Al Ghubar/Qarn Alam Block in Oman. We now have an exploration portfolio with the potential to redefine Harvest's future."
EXPLORATION AND PRODUCTION PROGRAMS
Venezuela
Petrodelta delivered 1.7 million barrels of oil or an average of 19,200 BOPD, and 1.4 billion cubic feet of natural gas (BCF) to PDVSA Petroleo, S.A. for the three months ending March 31, 2009, as compared to 1.2 million barrels of oil or an average of 13,300 BOPD, and 3.2 BCF of natural gas to PDVSA Petroleo, S.A. for the same period in 2008. Sequentially, Petrodelta oil production increased 13 percent over the 2008 fourth quarter average of 17,000 BOPD.
During the first quarter of 2009, the world market price for the quality of oil produced by Petrodelta averaged approximately $40.60 per barrel, or 94 percent of the price for West Texas Intermediate. The natural gas price received by Petrodelta is contractually fixed at $1.54 per thousand cubic feet.
Petrodelta Development Activities
Petrodelta drilled and completed six commercially successful oil wells in the first quarter of 2009, with an average initial production rate per well of 1,500 BOPD. Two additional wells were successfully completed and began production on April 9, 2009 and April 24, 2009, respectively. The drilling program and field improvement activities resulted in average production rates of 19,200 BOPD during the first quarter and 22,800 BOPD on March 31, 2009.
In regards to production from the Temblador Field, oil production has increased from 1,200 barrels of oil per day to a current rate of 9,400 barrels of oil per day since Petrodelta started drilling in the field late 2008. During this period five successful wells have been completed. The number of days to drill these wells has been reduced from 21 days to between 12 and 15 days.
United States
Western United States - Antelope
Operational activities in the Antelope prospect primarily focused on leasing activities, concentrating primarily on Allottee leases administered by the Bureau of Indian Affairs. Other operational activities included surveying, preliminary engineering, and permitting preparations for a deep natural gas test well that is expected to spud late in the second quarter of 2009. During the three months ended March 31, 2009, Harvest spent $8.3 million for lease acquisition, seismic program planning, surveying, permitting and site preparation. The dry hole costs of drilling the test well are projected to be $10.0 million. As of the end of the first quarter, Harvest had leased 52,000 gross acres (26,000 Harvest net).
Indonesia - Budong-Budong
Harvest completed the acquisition of 650 kilometers of 2-D seismic data in 2008 and currently, the data is being processed and interpreted. Planning is underway for exploratory drilling to commence in the second half of this year. In accordance with the farm-in agreement, Harvest expects to fund 100 percent of the well costs to a maximum of $10.7 million to earn a 47 percent working interest. Thereafter, the company will incur costs in proportion to its working interest. During the three months ended March 31, 2009, the company incurred $0.6 million for seismic processing and interpretation. Expected 2009 project expenditures (net to Harvest, including the company's funding commitment) for drilling the first exploratory well are $8.1 million.
Oman - Qarn Alam
On April 11, 2009, Harvest signed an Exploration and Production Sharing Agreement ("EPSA") with Oman for the Al Ghubar/Qarn Alam license block. The company will have a 100 percent working interest in the EPSA during the exploration phase. Oman Oil Company will have the option to back-in up to a 20 percent interest in the block after the discovery of commercial quantities of natural gas.
The Al Ghubar/Qarn Alam license is a newly-created block designated for exploration and production of non-associated natural gas and condensate which the Oman Ministry of Oil and Gas has carved out of the Block 6 Concession operated by Petroleum Development of Oman ("PDO"). PDO will continue to produce oil from several fields within the block area. The 3,867 square kilometer (955,600 total acres) block is located in the natural gas and condensate rich Ghaba Salt Basin in close proximity to the multi-TCF Barik, Saih Rawl and Saih fields. Harvest expects to invest $4.8 million in 2009 for signature bonus, processing and interpretation of existing 3-D seismic data and drilling preparations. Harvest has an obligation to drill two wells over a three-year period.
Non-GAAP Financial Measures
In this release, Petrodelta's EBITDA disclosure is not presented in accordance with accounting principals generally accepted in the United States (GAAP) and is not intended to be used in lieu of GAAP presentations of net income or cash flows from operating activities. EBITDA is presented because we believe it provides additional information with respect to both the performance of our fundamental business activities as well as our ability to meet our future capital expenditures and working capital requirements. We also believe that financial analysts commonly use EBITDA to analyze Petrodelta's performance. Although we present selected items that we consider in evaluating our performance, you should also be aware that the items presented do not represent all items that affect comparability between the periods presented. Variations in our operating results are also caused by changes in volumes, prices, exchange rates and numerous other factors. These types of variations are not separately identified in this release, but will be discussed, as applicable, in management's discussion and analysis of operating results in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2009.
A reconciliation of EBITDA to net income and cash flows from operating activities for the periods presented is included in the tables attached to this release.
Conference call
Harvest will hold an earnings conference call at 10:00 a.m. Central Daylight Time on Friday, May 8, 2009, during which management will discuss Harvest's first quarter 2009 results. To access the conference call, dial 719-325-4810 or 877-874-1569, five to ten minutes prior to the start time. At that time you will be asked to provide the conference number, which is 8878341. A recording of the conference call will also be available for replay at 719-457-0820, passcode 8878341, until May 17, 2009. The conference call will also be transmitted over the internet through the Harvest website at http://www.harvestnr.com.
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, Oman and China 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 2008 Annual Report on Form 10-K and other public filings.
Contact:
Stephen C. Haynes
Vice President, Chief Financial Officer
(281) 899-5716
HARVEST NATURAL RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
ASSETS:
------- March 31, December 31,
2009 2008
CURRENT ASSETS: ---- ----
Cash and cash equivalents $78,409 $97,165
Restricted cash 1,000 -
Accounts and notes receivable, net 11,408 11,570
Advances to equity affiliate 3,912 3,732
Prepaid expenses and other 1,055 3,964
----- -----
Total current assets 95,784 116,431
RESTRICTED CASH 735 -
OTHER ASSETS 4,927 3,316
INVESTMENT IN EQUITY AFFILIATES 223,392 218,982
PROPERTY AND EQUIPMENT, net 32,702 23,537
------ ------
TOTAL ASSETS $357,540 $362,266
======== ========
LIABILITIES AND EQUITY:
-----------------------
CURRENT LIABILITIES:
Accounts payable, trade and other $1,927 $1,662
Accrued expenses 9,125 12,241
Advance from equity affiliate 20,750 20,750
Accrued Interest 4,691 4,691
Income taxes payable 958 77
------ ------
Total current liabilities 37,451 39,421
EQUITY:
STOCKHOLDERS' EQUITY:
Common stock and paid-in capital 210,482 209,259
Retained earnings 124,575 129,351
Treasury stock (65,374) (65,368)
------- -------
Total Harvest stockholders' equity 269,683 273,242
------- -------
Noncontrolling Interest 50,406 49,603
------ ------
Total Equiity 320,089 322,845
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $357,540 $362,266
---------------------- -------- --------
HARVEST NATURAL RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts, unaudited)
Three months
Ended March 31,
--------------
2009 2008
---- ----
EXPENSES:
Depreciation $69 $45
Exploration expense 972 1,349
General and administrative 6,467 6,212
Taxes other than on income 317 263
----- -----
7,825 7,869
----- -----
LOSS FROM OPERATIONS (7,825) (7,869)
------ ------
OTHER NON-OPERATING INCOME (EXPENSE)
Gain on financing transactions - 1,330
Investment earnings and other 331 1,131
Interest expense - (459)
---- ----
331 2,002
----------------------------- ----- -----
NET LOSS BEFORE INCOME TAXES (7,494) (5,867)
Income tax expense 889 64
----------------------------- ----- -----
NET LOSS FROM CONSOLIDATED COMPANIES (8,383) (5,931)
Net income from unconsolidated equity affiliates 4,410 8,809
------------------------------------------------ ----- -----
NET INCOME (LOSS ) (3,973) 2,878
Less: Net Income Noncontrolling Interest 803 1,673
-----------------------------------------
NET INCOME (LOSS) ATTRIBUTABLE TO HARVEST
NATURAL RESOURCES, INC. $(4,776) $1,205
----------------------------------------- ======= ======
NET INCOME (LOSS) PER COMMON SHARE:
Basic $(0.15) $0.03
Diluted $(0.15) $0.03
--------- ------ -----
Weighted average shares outstanding:
Basic 32.9 35.0
Diluted 32.9 36.6
--------- ---- ----
HARVEST NATURAL RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Three months
Ended March 31,
----------------
2009 2008
---- ----
Cash Flows From Operating Activities:
Net loss $(3,973) $2,878
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depletion, depreciation and amortization 69 45
Gain on financing transactions - (1,330)
Net income from unconsolidated equity affiliate (4,410) (8,809)
Non-cash compensation related charges 1,154 998
Changes in operating assets and liabilities:
Accounts and notes receivable 162 (32)
Advances to equity affiliate (180) 12,633
Prepaid expenses and other 104 (52)
Accounts payable 265 (2,605)
Accounts payable, related party - 125
Accrued expenses (2,779) (3,714)
Accrued Interest - 459
Income taxes payable 881 (275)
-------------------------------------------- ----- -----
Net Cash Provided By (Used In) Operating
Activities (8,707) 321
-------------------------------------------- ------ ------
Cash Flows From Investing Activities:
Additions of property and equipment (7,067) (3,284)
Increase in restricted cash (1,735) (72)
Investment costs (531) (363)
-------------------------------------------- ---- ----
Net Cash Provided By (Used In) Investing
Activities (9,333) (3,719)
-------------------------------------------- ------ ------
Cash Flows From Financing Activities:
Net proceeds from issuances of common stock 69 335
Purchase of treasury stock - (8)
Financing costs (785) -
Dividends paid to noncontrolling interest - (358)
------------------------------------- ---- ----
Net Cash Used In Financing Activities (716) (31)
------------------------------------- ----- -----
Net Decrease in Cash (18,756) (3,429)
Cash and Cash Equivalents at Beginning of Period 97,165 120,841
------ -------
Cash and Cash Equivalents at End of Period $78,409 $117,412
------------------------------------------ ======= ========
PETRODELTA, S. A.
STATEMENTS OF OPERATIONS
(in thousands except per BOE and per share amounts, unaudited)
Three months Ended Three months Ended
March 31, 2009 March 31, 2008
------------------ ------------------
Barrels of oil sold 1,725 1,209
MCF of gas sold 1,414 3,172
Total BOE 1,961 1,738
Total BOE - Net of
30% Royalty 1,443 1,375
Average price/barrel $40.60 $79.02
Average price/mcf $1.54 $1.54
-------------------------------------------
$ $/BOE - net $ $/BOE - net
-------------------------------------------
REVENUES:
Oil sales $70,029 $95,535
Gas sales 2,183 4,885
Royalties (24,787) (33,959)
------- -------
47,425 32.87 66,461 48.34
------ ----- ------ -----
EXPENSES:
Operating expenses 11,716 8.12 14,343 10.43
Depletion, depreciation,
amortization 7,688 5.33 4,298 3.13
General and
administrative 2,225 1.54 1,678 1.22
Taxes other than on
income 3,071 2.13 3,486 2.54
----- ---- ----- ----
24,700 17.12 23,805 17.32
------ ----- ------ -----
INCOME FROM OPERATIONS 22,725 15.75 42,656 31.02
------ ----- ------ -----
Investment Earnings and
Other 2 53
------ ------
Income before income tax 22,727 42,709
Current income tax
expense 9,786 6.78 21,496 15.63
Deferred income tax
(benefit) (4,083) (2.83) (6,683) (4.86)
-------------------------- ------ ----- ------ -----
NET INCOME 17,024 11.80 27,896 20.29
Adjustment to reconcile to
reported Net Income from
Unconsolidated Equity
Affiliate:
Deferred income
tax benefit 5,001 3,556
----- -----
Net income (loss)
equity affiliate 12,023 24,340
Equity interest in
unconsolidated equity
affiliate 40% 40%
-------------------------- ----- -----
Income (loss) before
amortization of excess
basis in equity
affiliate 4,809 9,736
Amortization of
excess basis in
equity affiliate (311) (275)
Conform depletion
expense to GAAP 703 (666)
---------------------- ----- -----
Net income from
unconsolidated equity
affiliate $5,201 $8,795
---------------------- ------ ------
------------------
Non-GAAP Financial
Measures:
Reconcile NET INCOME as
reported under IFRS to
EBITDA:
NET INCOME $17,024 11.80 $27,896 20.29
Add back non-cash:
Depletion, depreciation
and amortizaion 7,688 5.33 4,298 3.13
Deferred income tax
(benefit) (4,083) (2.83) (6,683) (4.86)
------ ----- ------ -----
CASH FROM OPERATIONS 20,629 14.30 25,511 18.56
Investment earnings and
other (2) (53) (0.04)
Current income tax
expense 9,786 6.78 21,496 15.63
------ ----- ------ -----
EBITDA (IFRS) $30,413 21.08 $46,954 34.15
======= ===== ======= =====
SOURCE Harvest Natural Resources, Inc.
http://www.harvestnr.com
Copyright (C) 2009 PR Newswire. All rights reserved