Attached files
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| 8-K - FORM 8-K - HARVEST NATURAL RESOURCES, INC. | d334395d8k.htm |
 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 |