Harvest provides update on Venezuelan operations

Harvest Natural Resources Inc. provided an update on operations of its 32% owned Venezuelan affiliate, Petrodelta SA.

By OGJ editors
HOUSTON, Mar. 7 -- Harvest Natural Resources Inc. provided an update on operations of its 32% owned Venezuelan affiliate, Petrodelta SA.

During 2008, Petrodelta drilled and completed eight development wells and produced about 5.5 million bbl of oil, an increase of 1.9% over the previous year. Petrodelta also sold 10.7 bcf of natural gas, a decrease of 20% from 2007 due to reservoir management of gas production. On a barrel of oil equivalent basis, Petrodelta sold and produced 7.3 MMboe in 2008, compared with 7.6 MMboe in 2007.

In January 2005, drilling operations were suspended as Harvest's Venezuelan operations began the process of converting into a mixed company. During the conversion process, production fell to about 12,200 bo/d. Drilling operations recommenced in April 2008 and 10 new wells were drilled. Production rates have increased 56% to 19,000 bo/d during this period.

Drilling and production operations are presently focused in Uracoa and Temblador fields. Currently, Petrodelta is operating two rigs in Uracoa field and one rig in Temblador field. Petrodelta has completed two oil development wells thus far in 2009.

In Temblador, drilling operations are targeted to develop previously unaccessed portions of the field, and the first new development well was completed in February 2009 with initial production exceeding 1,800 bo/d. Temblador operations were transferred to Petrodelta in February 2008, and production has been increased to 4,900 bo/d from 1,200 bo/d by drilling one new well and four workovers and the opening of two idle wells.

For 2009, the initial drilling program includes plans for drilling development and appraisal wells for maintaining production capacity and appraising the substantial resource bases in the presently nonproducing Isleno and El Salto fields.

At yearend 2008, Harvest's 32% interest in Petrodelta's proved reserves was 43.3 MMboe, consisting of 34.2 million bbl of oil and 54.2 bcf of gas, in accordance with Security and Exchange Commission rules. About 79% of the company's proved reserves were oil and had a present value discounted at 10% of $111.4 million, providing nearly 19 years of projected production.

Harvest's probable and possible reserves, under Society of Petroleum Engineers and World Petroleum Congress reserve definitions, were independently estimated at 33.5 MMboe and 77.9 MMboe, respectively, representing a large multiyear inventory of drilling locations. The company does not expect to incur any impairment charges related to changes in 2008 proved reserves from the previous year.

More in General Interest