Tested. Proven. Moving Forward. EnerCom s London Oil & Gas Conference London, England June 18, 2009

Transcription

1 Harvest Natural Resources, Inc. Tested. Proven. Moving Forward EnerCom s London Oil & Gas Conference London, England June 18,

2 Forward-Looking Statements Cautionary Statements to Shareholders: 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 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 forwardlooking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 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 i occur, or should underlying assumptions prove incorrect, Harvest s actual results and plans could differ materially from those expressed in the forwardlooking statements. Harvest undertakes no obligation to publicly update or revise any forward-looking statements. Cautionary note to investors: The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. From time to time, Harvest may use certain terms such as resource base, prospective resources, probable reserves, possible reserves, non-proved reserves or other descriptions of volumes of reserves that SEC guidelines may prohibit Harvest from including in filings with the SEC. 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 2008 Annual Report on Form 10-K and other public filings available from Harvest at 1177 Enclave Parkway, Houston, Texas, or from the SEC s website at 2

3 About Harvest Market Data Exchange/Ticker Market Capitalization * NYSE: HNR $ 174 MM Enterprise Value $ 96 MM Cash (3/31/2009) $ 78 MM Debt (3/31/2009) $ 0 MM Shares Outstanding Institutional Ownership 70% 33 million * As of June 10,

4 Location of Assets USA Antelope (50%) Oil and Gas Exploration London Technical/ Houston BD Office Headquarters CHINA WAB-21 (100%) Offshore Oil Exploration West Bay (50%) Gas Exploration Venezuela Office Singapore Eastern Operations Office INDONESIA Budong-Budong (47%) Onshore Oil Exploration VENEZUELA Petrodelta (40%) Onshore Oil Exploration, Production & Development GABON Dussafu (66.667%) Offshore Oil Exploration Jakarta Office OMAN Qarn Alam (100%) Onshore Gas Exploration Offices 4

5 Harvest Natural Resources, Inc. Tested. Proven. Moving Forward International Portfolio 5

6 Venezuela - Petrodelta 6

7 Petrodelta Resource Base Six fields with 5.9 billion barrels OOIP 32% owned by HNR Net Resource Base* Proved Probable Possible Oil, MMBO Gas, BCF Total, MMBOE Proved 2P 3P Reserves (MMBoe) After Tax PV10 ($MM) $111 $139 $290 Per Boe $2.56 $1.98 $2.19 Enterprise Value/boe $2.22 $1.37 $0.73 *Ryder Scott reserve report as of December 31, 2008, WTI = $40.62, Venezuela oil price = $

8 Petrodelta Oil Production 35 April 2006 Dec Effective Date Conversion Completed 5 Barrels of Oil Per Da ay (000's) May 31 st, ,000 bpd # of Rigs 5 Conversion Process (Now Complete) 1 0 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 0 # of rigs SMU New Fields 8

9 Venezuela El Salto Appraisal Wells El Salto wells drilled in Q Drilled 2 appraisal wells. Evaluation process ongoing ELS-31 Expect Net Pay increase over the Ryder Scott assessment ELS-30 Initial data suggests confirmation of reserves in Lower Jobo in the southern part of the El Salto field 9

10 Petrodelta Margins $90.00 WTI = $100 Petrodelta Net Cash Margin Example ($/BOE after 33.33% royalty) $/bbl $80.0 $70.0 $60.0 $50.0 $40.0 $ WTI = $ WTI = $ WindFall PT Cash Costs Other Taxes Income Tax Cash Margin $20.0 $10.0 $34.4 $ $15.8 $0.0 Cash Margin Cash Margin Cash Margin Income Tax is approximately 50% of IBT 10

11 Indonesia Budong-Budong 1.4 MM acre PSC, Onshore West Sulawesi, Indonesia 47% interest Proven hydrocarbon system Several oil and gas seeps present Leads in the Karama and Lariang basins MMBO each Status & Exploration Work Program 650 Km of 2D seismic Completed in 2008 Interpretation Ongoing Drill 2 exploration wells Spud late 2009 Projected HNR costs - $20 MM 5km Eocene Mio-Pliocene 5km 11

12 Gabon Dussafu 680,000 acre PSC, Offshore Gabon % operated interest Proven hydrocarbon system Gamba Oil Discoveries Syn Rift leads Status & 2009 Work Program 650 Km of 2-D seismic Completed in 2008 Reprocessing 1000 km 2 3-D and Technical studies 1 st half 2009 Projected 2009 HNR cost of $2 MM Potential Drilling in

13 Oman Qarn Alam 956,000 acre EPSA, Onshore Central Oman Harvest is operator with 100% WI (Oman Oil has up to 20% back in) Large Deep Paleozoic gas and condensate resource potential play in Ghaba Basin beneath shallow oil fields on production since 1975 Proximal to infrastructure for domestic and LNG markets with off-take guaranteed by the Omani government Status & Work Program Expect to spend $4.8 million for processing/interpretation of existing 3D seismic and drilling preparations in 2009 Obligation to drill two wells over three year period. 13

14 China WAB million acre, Offshore South China Sea Proven hydrocarbons being developed and produced in nearby basins All the elements of the proven petroleum system to the West are present in WAB-21 Proven play types of nearby discoveries are present in WAB-21 Partner is CNOOC Subject to territorial dispute between China and Vietnam 14

15 Harvest Natural Resources, Inc. Tested. Proven. Moving Forward US Portfolio 15

16 Bay Exploration Project Brazoria & Galveston Counties, TX Approx.12,000 acres under lease Harvest: 50% WI / 37% NRI 13 Identified Leads Undrilled Salt Feature Stacked Miocene, Frio, Vicksburg Well Cost: Approx $15 MM Offshore exploratory wells: 2 Status & 2009 Work Program Engineering and Permitting Re-processing 3-D First test well late 2009 or HNR Cost: $0.5 MM 16

17 USA-Antelope Central Area of the Uinta Basin, Utah Harvest: Operator 50% WI / 39% NRI Current Fee and Allottee Lease Position ~ 52,000 acres; 26,000 net Status & 2009 Work Program: Mesaverde e well scheduled June 2009 Permitting 8 Green River oil locations Considering Wasatch test 2009 HNR cost: $18.3 MM 17

18 USA-Antelope Two Prospective Targets Tertiary Green River & Wasatch Formations - Oil & Gas play Cretaceous Mesaverde Formation Gas play Overpressured, massive, low permeability sandstone Multi-TCF Resource Potential 18

19 USA-Antelope Current Status Exploration well anticipated to spud on June 14, 2009 The permitted depth is 18,000 feet Drilling is anticipated to require approximately 80 days followed by a 90-day production test period Targeted to explore for and develop oil and natural gas from multiple reservoir horizons A successful commercial discovery would result in an appraisal and development drilling program on the project 19

20 Schedule Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Development Drilling Petrodelta Rig 1 Rig 2 Seismic acquisition, processing and interpretation Petrodelta ta Indonesia Gabon Budong Dussafu New fields USA Oman West Bay Qarn Alam Venezuela El Salto/Isleno E & A Drilling USA USA Antelope West Bay Indonesia Budong (2) Oman Qarn Alam Gabon Dussafu 20

21 Share Price Relative to Value $40 Value Considerations Venezuela $35 What s the right Venezuela risk coefficient? $30 EXPLORATION UPSIDE $75 MM cash dividend and dividend advances $25 paid from Petrodelta in 2008 $11.70 $20 POSSIBLE Petrodelta running rigs, growing production $9.26 and reserves, reducing $15 $3.95 costs $6.82 PROBABLE $2.89 $78 MM cash $10 $4.58 $1.84 High-impact exploration $9.81 PROVEN $5.27 prospects in prolific $0.85 $7.67 $5 $5.53 areas worldwide $3.36 $2.36 $2.36 $2.36 $2.36 CASH Growing U.S. portfolio $0 Positioned for distressed Share Price NAV NAV NAV NAV market (06/10/2009) $40.62/bbl WTI $50/bbl WTI $60/bbl WTI $70/bbl WTI 21

22 Capital Structure Aligned with Strategy ASSETS: 03/31/ /31/2008 Cash $78.4 $97.2 Balance Sheet cash and cash dividends from Restricted cash Other current assets expanding Petrodelta Investment in equity affiliate operations reinvested in high-impact h i exploration PPE, net projects in U.S. and Total assets Worldwide LIABILITIES & S/H EQUITY: Current liabilities Short-term debt Long-term debt Minority interest Stockholders equity Total liabilities & S/H equity $357.5 $362.3 Zero debt, low financial risk 22

23 2009 Plan Summary Venezuela Drilling program will grow production and reserves and appraise new fields Completely funded from CFO Drill Exploration Commitments Antelope Deep Test projected to spud on June 14 th, 2009 Two back-to-back Budong wells 4 th quarter Both are multi-pay prospects with large potential; each can significantly alter the scope of the company Mature and rationalize exploration portfolio Pursue opportunistic growth in distressed market 23

24 Why Invest In Harvest? Significant Valuation Gap Current EV equates to 30% of PV10 for 1P only at $70 WTI Petrodelta CFO funding strong growth in production New fields potential being demonstrated Near and medium-term exposure to high-potential exploration prospects worldwide Strong Balance Sheet and Organization HNR is exceptionally well positioned in the current environment to capture further opportunities Commitment to Long Term Shareholder Value 24