IPAA Oil and Gas Investment Symposium IPAA Oil and Gas Investment Symposium April 16 th - 18 th , 2012 Exhibit 99.1 |
Forward Looking Statements Forward Looking Statements NYSE: HNR www.harvestnr.com 1 Cautionary Statements: Certain statements in this presentation are forward-looking and are based upon Harvest’s current belief as to the outcome and timing of future events. All statements other than statements of historical facts including planned capital expenditures, increases in oil and gas production, Harvest’s outlook on oil and gas prices, estimates of oil and gas reserves, business strategy and other plans, estimates, projections, and objectives for future operations, are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include Harvest’s concentration of assets in Venezuela; timing and extent of changes in commodity prices for oil and gas; political and economic risks associated with international operations; and other risk factors as described in Harvest’s Annual Report on Form 10-K and other public filings. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, Harvest’s actual results and plans could differ materially from those expressed in the forward-looking statements. Harvest undertakes no obligation to publicly update or revise any forward-looking statements. Harvest may use certain terms such as resource base, contingent resources, prospective resources, probable reserves, possible reserves, non-proved reserves or other descriptions of volumes of reserves. These estimates are by their nature more speculative than estimates of proved reserves and accordingly, are subject to substantially greater risk of being actually realized by the Company. Investors are urged to consider closely the disclosure in our 2011 Annual Report on Form 10-K and other public filings available from Harvest at 1177 Enclave Parkway, Houston, Texas, 77077 or from the SEC’s website at www.sec.gov. Contingent resources are resources that are potentially recoverable but not yet considered mature enough for commercial development due to technological or business hurdles. Prospective resources are those quantities of hydrocarbons which are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. They indicate exploration opportunities and development potential in the event a discovery is made and should not be construed as contingent resources or reserves. The contingent and prospective resources included in this presentation were internally developed by Harvest Natural Resources. |
About Harvest About Harvest NYSE: HNR www.harvestnr.com 2 Market Data Exchange/Ticker NYSE: HNR Market Capitalization * $ 226 MM Enterprise Value $ 200 MM Cash (12/31/2011) $ 58 MM Debt (12/31/2011) $ 32 MM Shares Outstanding 37 MM Institutional Ownership 85% * As of April 9, 2012 |
2011/2012 Highlights 2011/2012 Highlights NYSE: HNR www.harvestnr.com 3 Closed the sale of Utah assets in May 2011: Received proceeds of $217.8 million (net $205 million) 138% return on investment Increased gross production in Venezuela to 11.4 million barrels of oil, an increase of 33% over 2010 Current production 37,000 bopd, 18% above average 2011 Q1 2012 oil production of 32,790 bopd, 16% above Q1 2011 Production increases driven by drilling and infrastructure buildout Exploration Program: Discovered and appraised oil on Dussafu Block in Gabon. Acquired new 3D survey. Drilled two wells on Budong-Budong Block in Indonesia which confirmed the presence of a working petroleum system Drilled two exploration wells on Block 64 in Oman; both plugged Reduced debt to $15.5 million in March 2012, down from $81.2 million at year-end 2009 |
2012 Outlook 2012 Outlook NYSE: HNR www.harvestnr.com 4 Petrodelta growing production, cash flow, EBITDA and reserves Analyze commercial development options of the discoveries in Gabon. Process and evaluate new 3D followed by two well program. Evaluate exploration program to target the Pliocene and Miocene oil potential of the Budong-Budong license. Continue the evaluation of opportunities in Al Ghubar/Qarn Alam license onshore Oman Exposure to High Impact Exploration: Continue to advance the Strategic Alternatives process |
Venezuela - Venezuela - Petrodelta Petrodelta NYSE: HNR www.harvestnr.com 5 32% Equity Interest in Petrodelta Six fields, 9.1 billion barrels of gross oil-in-place Growth underway Current production rate of 37,000 bopd, 18% above 2011 average Successful development program ongoing in Temblador, Isleño and El Salto Isleño producing 2,400 bopd from two horizontal wells Infrastructure build underway Capital program funded 100% by Petrodelta internal cash flow Operations generating solid financial performance 2011 CFO of $196 million (gross) $84 million in dividends (net to HNR) received since 2008 $9.8 million (net to HNR) in dividends declared and receivable, still outstanding Cash surplus Jan 2010 - Dec 2011: $66 million net to HNR 32% interest 2008 2009 2010 2011 Cash From Operations ($MM, Gross) 94 140 192 196 Production (MMBOE, Gross) 7.3 8.6 8.9 11.8 Proved Reserves (MMBOE, net to (Harvest) 43.3 46.3 50.0 43.3 2P Reserves (MMBOE, net to Harvest) 70.1 83.3 103.6 103.8 3P Reserves (MMBOE, net to Harvest) 132.4 224.3 220.6 210.5 |
Petrodelta Production Petrodelta Production NYSE: HNR www.harvestnr.com 6 Average March 2012 34.4 MBOPD Current 37.5 MBOPD 2012 Outlook 40,300 BOPD average full year 34,400 BOPD average March 2012 37,540 BOPD 1 st week of April 2012 $300 million Capex for 2012 New fields Infrastructure 3 rigs for development wells 33 new oil wells Conversion Process # of Drilling Rigs Production Outlook SMU New Fields 2004 2005 2006 2007 2008 2009 2010 2011 2012 |
El Salto Field El Salto Field New FWKO and Separators with capacity of 20 MBOPD NYSE: HNR www.harvestnr.com 7 Petrodelta New Facilities Petrodelta New Facilities |
El Salto Field El Salto Field ELS 31 Flaring Facility NYSE: HNR www.harvestnr.com 8 Petrodelta New Facilities Petrodelta New Facilities |
NYSE: HNR www.harvestnr.com 9 Petrodelta New Facilities Petrodelta New Facilities El Salto Field El Salto Field Planned Central Processing Facility Layout |
Temblador Field Temblador Field New FWKO and Treater with capacity of 15 MBOPD NYSE: HNR www.harvestnr.com 10 Petrodelta New Facilities Petrodelta New Facilities |
Petrodelta Reserves Valuation Petrodelta Reserves Valuation NYSE: HNR www.harvestnr.com 11 Ryder Scott reserve report @ 12/31/2011 WTI = $96.2/BBL, Petrodelta oil price = $98.4/BBL (Net to Harvest Natural Resources 32% Interest) Net Resource Base* Proved Probable Possible Oil, MMBBL 38.7 53.5 101.9 Gas, BCF 27.8 41.9 29.5 Total, MMBOE 43.3 60.5 106.8 Proved 2P 3P Reserves (MMBOE) * 43.3 103.8 210.5 After – Tax PV10 ($MM): As of 12/31/2011: 543 1,053 1,918 Per BOE (1) $12.5 $10.1 $9.1 * Net to HNR after 33.33% royalty. (1) Includes the new Windfall Profit Tax. The impact of the Windfall Profit Tax change has been calculated based on HNR’s current understanding of the new legislation. The Venezuelan authorities have yet to clarify some issues related to the implementation of the tax. At December 31, 2011 Six fields with 9.1 billion barrels gross OOIP 43.3 million BOE net Proven, 167.2 million BOE net Probable and Possible 2012 Drilling Program at El Salto, Temblador and Isleño fields will continue to drive reserve additions Petrodelta Reserves Value (After Tax (2) - Net to HNR 32% Interest ) (2) After Venezuelan Income Taxes but before U.S. Income Taxes |
Indonesia - Indonesia - Budong-Budong Budong-Budong NYSE: HNR www.harvestnr.com 12 747,862 acre PSC, Onshore West Sulawesi, Indonesia 64.4% interest License commitments fulfilled Final relinquishment due in Jan 2013, 20% of original area to be retained (271,429 acres) 2012 Activity Prospects and leads being matured Lariang Basin: Technical review March 2012 Madjene prospect high graded Karama Basin prospectivity being worked: Technical review planned for July 2012 Exploration well planned in 2013 Geological & operational preparations under evaluation Gross Unrisked Prospective Resources (MMBBL) – Lariang Sub-Basin Mean Prospects (9) 585 |
Gabon - Gabon - Dussafu Dussafu NYSE: HNR www.harvestnr.com 13 680,000 acre PSC, Offshore Gabon 66.667% operated interest 2 nd Exploration Period extended until May 27, 2012 Option to enter 3 rd Exploration Period 4 year term being negotiated 2012 Activity Exploration drilling Technical committee defined additional prospects Tortue prospect agreed as next target Well planning in progress 3D processing & reprocessing Central 3D PSTM 66% complete ITT issued for PSDM & inboard 3D reprocessing Tortue Prospect |
Dussafu Resources Dussafu Resources NYSE: HNR www.harvestnr.com 14 Proven hydrocarbon system Discoveries - Ruche (oil), Moubenga (oil), Walt Whitman (oil), GMC-1X (gas/condensate) Prospectivity at multiple levels Post-Salt (Madiela) - Secondary target in Tchibobo Gamba - Dussafu 3D area >250 MMBBL Syn-Rift Pre-Salt Visualization of Gamba structure with Discoveries (green) and Prospects (yellow) Ruche Walt Whitma n Hibiscus Mupale Hibiscus North Moubenga Lead 6 Lead 18 Tortue Leads 12-15 N Unrisked Resources (MMBBL) Mean Contingent Resource 23 Prospects (12) 235 Leads (12) 170 TOTAL 428 NW Walt Whitman Leads 19-23 |
Oman – Oman – Block 64 Block 64 NYSE: HNR www.harvestnr.com 15 956,000 acre EPSA, Onshore Oman 80% operated interest (Oman Oil has a 20% interest) Large Paleozoic gas and condensate play in Ghaba Basin beneath shallow oil fields Proximal to infrastructure for domestic and LNG markets with offtake guaranteed by the Omani Government Mean Gross Unrisked Prospective Resources Condensate (MMBBL) Gas (BCF) Prospects (12) 250 6,113 Initial Period Current To May 2013 Work commitment fulfilled Post-well studies – post-mortem PI revision – based on results of MFS-1 and AGN-1 Review potential for a pre-salt unconventional shale play on the eastern portion of Block 64 G&G Studies for Ghaba Flank 200 km 2D seismic acquisition Reprocess 100 km2 of existing 3D seismic data 1 exploration well to Haima Supergroup GHABA FLANK 2012 Activity Second Phase – May 2013 to May 2016 |
Value Exposure of HNR Portfolio Value Exposure of HNR Portfolio NYSE: HNR www.harvestnr.com 16 AGQA BUDONG $/share DUSSAFU Share Price Exposure Exploration EMV (Based on Mean Resources, $96/BBL WTI and 37 MM shares) The Expected Monetary Value (EMV) is a function of the dry hole cost of the well, the NPV of the prospect/lead in the event of discovery and the chance of making a discovery. The value of the assets presented in this chart is estimated by arithmetically adding the EMV10 of each of the prospects and leads for which a chance of success is available. Only prospects and leads with positive EMV are included. The NPV of a discovery has been estimated using the mean prospective resources of the prospect/lead. When applicable, the estimated value of the contingent resources is also included. There can be no assurance that the estimates presented or the underlying assumptions will be realized and that actual results of operations or future events will not be materially different from the estimates presented. These estimates have been internally developed by Harvest Natural Resources. |
2012 Program 2012 Program NYSE: HNR www.harvestnr.com 17 Project/Unit Country Activity Q1 Q2 Q3 Q4 Seismic & G&G Exploration Drilling Appraisal Drilling G&G Development Exploration Drilling Appraisal Drilling G&G/Seismic Well Operations Development Exploration Drilling Appraisal Drilling G&G Development Seismic & G&G Exploration Drilling Appraisal Drilling Development Al Ghubar/Qarn Alam (Block 64) Dussafu Gabon Oman Petrodelta Venezuela 2012 Budong-Budong Indonesia LG-1 & KD-1 Evaluation, Surface structural & Oil seep mapping, Lariang & Karama Basin evaluation Exploration Plan Decision Point Exploration Well: Tendering & Procurement Engineering & Well Design 1 Well Drilling and Infrastructure New Fields 2nd Expl/App Well 3D Processing and Reprocessing Agree Locations and Objectives, Well Design, LLI Well post-mortem, PI Revision, 2D Reprocessing, 3D Mapping |
Why Invest in Harvest? Why Invest in Harvest? NYSE: HNR www.harvestnr.com 18 Demonstrated ability to generate value through exploration with exposure to high-potential exploration prospects in Indonesia, Gabon and Oman Building Pipeline of Future Oil-focused Plays Strong Balance Sheet and Organization Significant Valuation Gap Petrodelta CFO funding strong growth in production Significant weight towards oil relative to our peers Portfolio provides for value exposure in excess of 10x current stock price Commitment to Long Term Shareholder Value |