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Harvest Energy Trust To Acquire Oil Property

Apr 14, 2003 - 11:03 ET

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN 
THE UNITED STATED.  ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY 
CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.  

CALGARY - (TSX: HTE.UN) - Harvest Energy Trust
("Harvest"), today announced that its wholly owned subsidiary, Harvest
Operations Corp., has entered into an agreement and closed an acquisition of
the Killarney crude oil property in Eastern Alberta for an adjusted cash-
closing amount of $13.2 million. Harvest used available lines of credit to
finance the acquisition. Debt outstanding following closing of this
acquisition is expected to be approximately $37 million, or approximately 0.9
times annualized cash flow pro forma the Killarney acquisition.

Killarney Property Highlights:
- current production of 925 BOE/day (favourable acquisition parameter of
  $14,270 per BOE/d based on cash to closing);
- established reserves at November 1st, 2002, as determined by McDaniel &
  Associates, of 2.12 million BOE. Adjusted established reserves at
  closing of 1.96 million BOE (favourable acquisition parameter of $6.73
  per BOE);
- accretive to cash flow per unit, by approximately 10%;
- situated in close proximity to Harvest's core operating area in Eastern
  Alberta, enabling operating efficiencies;
- similar reservoir characteristics to Harvest's existing properties;
  high quality, mature production from large original-oil-in-place
  (approximately 50 million barrels) supported by an active natural water
  drive;
- property enhancement from production optimization and facility
  consolidation to yield incremental production and reduced operating
  expenses;
- production from this property is medium gravity at 20 degrees API
  gravity;
- property includes two operated batteries, a natural gas compressor, and
  approximately 1,500 net acres of undeveloped land.

Jake Roorda, President of Harvest, stated that, "This property
acquisition is an excellent complement to Harvest's production base. It is a
relatively large oil reservoir, with a long history of stable production. The
Killarney property is in close proximity to our Hayter property, and has
similar attributes to our current base of producing properties. It fits well
with our "going concern" strategy in Eastern Alberta."

First Quarter Update and 2003 Guidance:
Harvest's 2003 production and property enhancement activities were
initiated during the first quarter. Production during the first quarter is
expected to be approximately 8,200 BOE/d. Current production rates, prior to
the Killarney property acquisition, are approximately 8,600 BOE/d.
Additionally, operating costs have been impacted by higher than budgeted power
costs and are expected to average approximately $9.00 per barrel. Although
power rates have abated since the peaks experienced during the winter months,
we anticipate higher power costs for the balance of 2003, when compared to the
prior year.
Combining the incremental production from the Killarney property for the
period from April 14th, 2003 to December 31st, 2003 with Harvest's existing
base of production, Harvest expects 2003 average production, average royalty
rate and unit operating expenses to be:

Total Production        9,400 BOE/d
Average Royalty Rate    14%
Operating Expenses      $8.70 per BOE

Although the Killarney acquisition is accretive to cash flow per unit,
Harvest currently forecasts that it will maintain its monthly distribution at
$0.20 per unit. Additional cash flow derived from the Killarney acquisition
will be used to fund Harvest's ongoing property enhancement program and
acquisition strategy. There will be no additional units issued to finance the
Killarney acquisition.
Harvest Energy Trust is a Calgary based oil and natural gas trust that
strives to deliver stable monthly cash distributions to its Unitholders
through its strategy of acquiring, enhancing and producing crude oil, natural
gas and natural gas liquids. Harvest's assets, comprised of high quality
medium and heavy gravity crude oil properties in East Central Alberta, and its
hands on operating strategy underpin Harvest's objective to deliver superior
economic returns to Unitholders. Harvest's strategy is to retain up to 50% of
its Cash Available for Distribution for capital reinvestment in the form of
existing property enhancement and new property acquisitions while maintaining
a high rate of cash distributions. Harvest currently operates approximately
99% of its production, enabling it to pursue additional asset growth through
property optimization and enhancement.

ADVISORY: Certain information regarding Harvest Energy Trust and Harvest
Operations Corp. including management's assessment of future plans and
operations, may constitute forward-looking statements under applicable
securities law and necessarily involve risks associated with oil and gas
exploration, production, marketing and transportation such as loss of market,
volatility of prices, currency fluctuations, imprecision of reserve estimates,
environmental risks, competition from other producers and ability to access
sufficient capital from internal and external sources; as a consequence,
actual results may differ materially from those anticipated in the forward-
looking statements.

-30-


FOR FURTHER INFORMATION PLEASE CONTACT:

Jacob Roorda,
President

or

David Fisher,
Vice President,
Finance Harvest Energy Trust,
Telephone: (403) 265-1178,
Facsimile: (403) 265-3490,
Email address: information@harvestenergy.ca