Important Links

News Releases

Press Release Navigation
<<< Previous Headlines Next >>>
Harvest Energy Announces Year End 2009 Reserves

Mar 8, 2010 - 09:15 ET

 CALGARY, ALBERTA--(Marketwire - March 8, 2010) - Harvest Energy ("Harvest") (TSX:HTE.DB.B), (TSX:HTE.DB.D), (TSX:HTE.DB.E), (TSX:HTE.DB.F) and (TSX:HTE.DB.G) today announces a summary of its 2009 year end reserves information. Unless otherwise indicated, all reserves stated herein are gross reserves (before royalty burdens and without including royalty interests), based on forecast prices and costs, except where indicated.

HIGHLIGHTS OF HARVEST'S RESERVES:

- Through successful drilling, optimization and acquisition activities, Proved plus Probable ("P+P") reserves declined to year end reserves of 199.5 million barrels of oil equivalent ("mmboe") (2008 - 219.9 mmboe), as a result of a very modest capital investment program and asset divestments;

- Proved Developed Producing reserves continue to represent a high percentage (approximately 83%) of Total Proved reserves. Total Proved reserves represent approximately 70% of total P+P reserves;

- Effectively maintained a Reserve Life Index of approximately 10.6 years (P+P) based on average 2009 production of 51,647 boe/d; and

- The net present value (NPV) (before taxes, discounted at 10%) of Harvest's P+P reserves were unchanged at $3,826.6 million (2008 - $3,893.8 million), while the NPV of total Proved reserves was also unchanged at $2,905.2 million (2008 - $2,941.8 million).

HARVEST RESERVES SUMMARY

Harvest's reserves for the year ended December 31, 2009 were evaluated in accordance with National Instrument 51-101 ("NI 51-101") by the independent reserve evaluators McDaniel & Associates Consultants Ltd. ("McDaniel") who evaluated approximately 40% and GLJ Petroleum Consultants Ltd. ("GLJ") who evaluated approximately 60%. The complete reserves disclosure as required under NI 51-101, will be contained in Harvest's 2009 Renewal Annual Information Form, to be filed on SEDAR on or before March 30, 2010.



The following tables summarize certain information contained in Harvest's
reserves report.

HARVEST RESERVES SUMMARY AS AT DECEMBER 31, 2009 - FORECAST PRICES AND COSTS

Gross(1)
----------------------------------------------------------------------------
Light & Associated Total Oil Total Oil
Medium & Natural Equivalent Equivalent
Crude Heavy Non- Gas (3) (3)
Reserves Oil(5) Crude Oil Associated Liquids 2009 2008
Category (mmbbl) (mmbbl) Gas (Bcf) (mmbbl) (mmboe) (mmboe)
Proved
Developed
Producing 52.3 30.6 163.7 5.8 116.0 128.2
Developed
Non-Producing 0.9 2.0 13.6 0.4 5.6 6.8
Undeveloped 8.7 4.5 29.2 0.6 18.7 19.3
Total Proved 61.9 37.2 206.5 6.8 140.3 154.3
Probable 25.2 17.9 79.6 2.8 59.2 65.7
----------------------------------------------------------------------------
Total Proved Plus
Probable(4) 87.0 55.1 286.1 9.6 199.5 219.9
----------------------------------------------------------------------------


Net(2)
----------------------------------------------------------------------------
Light & Associated Total Oil Total Oil
Medium & Natural Equivalent Equivalent
Crude Heavy Non- Gas (3) (3)
Reserves Oil(5) Crude Oil Associated Liquids 2009 2008
Category (mmbbl) (mmbbl) Gas (Bcf) (mmbbl) (mmboe) (mmboe)
Proved
Developed
Producing 47.1 27.1 143.9 4.3 102.5 111.3
Developed
Non-Producing 0.7 1.6 11.9 0.2 4.6 5.5
Undeveloped 7.4 3.7 23.8 0.5 15.5 15.8
Total Proved 55.3 32.4 179.5 5.0 122.5 132.5
Probable 22.1 14.9 67.5 2.0 50.3 54.7
----------------------------------------------------------------------------
Total Proved Plus
Probable(4) 77.4 47.3 247.0 7.0 172.9 187.2
----------------------------------------------------------------------------
Notes:
(1) "Gross" reserves means the total working interest share of Harvest's
remaining recoverable reserves before deductions of royalties payable to
others.
(2) "Net" reserves means Harvest's gross reserves less all royalties payable
to others.
(3) Oil equivalent amounts have been calculated using a conversion rate of
six thousand cubic feet of natural gas to one barrel of oil. Boes may be
misleading, particularly if used in isolation. This conversion ratio is
based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the
wellhead.
(4) Columns may not add due to rounding.
(5) The reserves attributable to Harvest's Hay River property, which is an
area that produces medium gravity crude oil (average 24 degrees API),
are subject to a heavy oil royalty regime in British Columbia and would
be required, under NI 51-101, to be classified as heavy oil for that
reason. We have presented Hay River reserves as medium gravity crude in
the following reserve tables as they would otherwise be classified in
this fashion were it not for the lower rate royalty regime applied in
British Columbia. If the Hay River reserves were included in the heavy
crude oil category, it would increase the gross heavy oil reserves and
reduce the light/medium oil reserves by the following amounts: PDP: 11.9
mmboe, Proved Undeveloped: 5.2 mmboe, Total Proved: 17.1 mmboe,
Probable: 5.5 mmboe and P+P: 22.6 mmboe, and would increase the net
heavy oil reserves and reduce the light/medium oil reserves by the
following amounts: PDP: 10.5 mmboe, Proved Undeveloped: 4.3 mmboe, Total
Proved: 14.8 mmboe, Probable: 4.9 mmboe, and P+P: 19.7 mmboe.

 


HARVEST NET PRESENT VALUE OF FUTURE NET REVENUE OF RESERVES AS AT DECEMBER 31, 2009:

FORECAST PRICES AND COSTS

Harvest's crude oil, natural gas and natural gas liquids reserves were evaluated using McDaniel's product price forecasts effective January 1, 2010 prior to provision for income taxes, interest, debt service charges and general and administrative expenses. Note that this presentation is on a before tax basis, and when the tax measures announced on October 31, 2006 and passed into law in 2007 become enacted in 2011 then the after tax values could be different than the pre-tax number presented herein. It should not be assumed that estimates of the discounted future net production revenue represent the fair market value of Harvest's reserves.



----------------------------------------------------------------------------
Reserves 0% Disc. 5% Disc. 10% Disc. 15% Disc. 20% Disc.
Category ($millions) ($millions) ($millions) ($millions) ($millions)
Proved
Developed
Producing $4,374.4 $ 3,215.8 $ 2,573.0 $ 2,160.8 $1,873.1
Developed
Non-Producing $161.2 $120.0 $92.9 $74.6 $61.5
Undeveloped $519.3 $343.5 $239.3 $172.5 $127.2
Total Proved $5,054.9 $ 3,679.3 $ 2,905.2 $ 2,407.8 $2,061.9
Probable $2,540.4 $ 1,419.8 $921.4 $653.5 $491.2
----------------------------------------------------------------------------
Total Proved Plus
Probable(1) $7,595.4 $ 5,099.1 $ 3,826.6 $ 3,061.4 $2,553.1
----------------------------------------------------------------------------
Note:
(1) Columns may not add due to rounding.

 


MCDANIEL & ASSOCIATES CONSULTANTS LTD. JANUARY 1, 2010 PRICE FORECAST

A summary of the McDaniel price forecast as at January 1, 2010 that was used in the Harvest reserves evaluation is listed below. A complete listing of the price forecast is available on the McDaniel's website at the following link http://www.mcdan.com/pricing_forecasts.html.



----------------------------------------------------------------------------
Alberta Bow Alberta
Edmonton River Alberta AECO
Light Hardisty Heavy Spot US/CAN
WTI Crude Oil Crude Oil Crude Oil Crude Oil Price Exchange Rate
Year $US/bbl(1) $C/bbl(2) $C/bbl(3) $C/bbl(4) $C/GJ $US/$CAN
----------------------------------------------------------------------------
2010 80.0 83.2 72.3 68.1 6.05 0.95
2011 83.6 87.0 73.8 67.6 6.75 0.95
2012 87.4 91.0 74.4 68.0 7.15 0.95
2013 91.3 95.0 75.8 68.1 7.45 0.95
2014 95.3 99.2 79.2 71.1 7.80 0.95
2015 99.4 103.5 82.6 74.2 8.15 0.95
2016 101.4 105.6 84.3 75.7 8.40 0.95
2017 103.4 107.7 85.9 77.2 8.55 0.95
2018 105.4 109.8 87.6 78.7 8.70 0.95
2019 107.6 112.1 89.4 80.4 8.90 0.95
2020 109.7 114.3 91.2 81.9 9.05 0.95
2021 111.9 116.5 93.0 83.6 9.25 0.95
2022 114.1 118.8 94.8 85.2 9.45 0.95
2023 116.4 121.2 96.7 86.9 9.65 0.95
2024 118.8 123.7 98.7 88.7 9.85 0.95

Thereafter +2%/yr +2%/yr +2%/yr +2%/yr +2%/yr 0.95
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
(1) West Texas Intermediate at Cushing Oklahoma 40 degrees API/0.5% sulphur
(2) Edmonton Light Sweet 40 degrees API, 0.3% sulphur
(3) Bow River at Hardisty Alberta (Heavy stream)
(4) Heavy crude oil 12 degrees API at Hardisty Alberta (after deduction of
blending costs to reach pipeline quality)

HARVEST 2009 RECONCILIATION TABLE - FORECAST PRICES AND COSTS

----------------------------------------------------------------------------
TOTAL BARREL OF OIL EQUIVALENT (boe)
Gross Proved Gross Proved Plus Probable
FACTORS (mmboe) (mmboe)
December 31, 2008 154.3 219.9
Technical Revisions 4.1 (3.7)
Drilling Extensions 1.2 2.1
Infill Drilling 0.5 1.0
Improved Recovery 0.2 0.3
Acquisitions/Divestitures (1.1) (1.2)
Production (18.9) (18.9)
December 31, 2009(1) 140.3 199.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Note:
(1) Columns may not add due to rounding.

 


Corporate Profile

Harvest, a wholly-owned subsidiary of KNOC, is a significant operator in Canada's energy industry offering unitholders exposure to an integrated structure with upstream (exploration, development and production of crude oil and natural gas) and downstream (refining and marketing of distillate, gasoline and fuel oil) segments. Our upstream oil and gas production is weighted approximately 70% to crude oil and liquids and 30% to natural gas, and is complemented by our long-life refining and marketing business. Harvest's outstanding debentures are traded on the TSX under the symbols "HTE.DB.B", "HTE.DB.D", "HTE.DB.E", "HTE.DB.F" and "HTE.DB.G".

KNOC is a state owned oil and gas company engaged in the exploration and production of oil and gas along with storing petroleum resources. KNOC will fully establish itself as a global government-run petroleum company by applying ethical, sustainable, and environment-friendly management and by taking corporate social responsibility seriously at all times. For more information on KNOC, please visit their website at www.knoc.co.kr/ENG/main.jsp.

Advisory

Certain information in this press release, including management's assessment of future plans and operations, contains forward-looking information that involves risk and uncertainty. Such risks and uncertainties include, but are not limited to, risks associated with: imprecision of reserve estimates; conventional oil and natural gas operations; the volatility in commodity prices and currency exchange rates; risks associated with realizing the value of acquisitions; general economic, market and business conditions; changes in environmental legislation and regulations; the availability of sufficient capital from internal and external sources; and, such other risks and uncertainties described from time to time in Harvest's regulatory reports and filings made with securities regulators.

Forward-looking statements in this press release may include, but are not limited to, production volumes, operating costs, commodity prices, capital spending, access to credit facilities, and regulatory changes. For this purpose, any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expects" and similar expressions.

Readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Harvest assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.      

FOR FURTHER INFORMATION PLEASE CONTACT:

 Harvest Energy
John Zahary
President & CEO
(403) 265-1178 or Toll Free: 1-866-666-1178

or

Harvest Energy
Kari Sawatzky
Investor Relations Associate
(403) 265-1178 or Toll Free: 1-866-666-1178

or

Harvest Energy
2100, 330 - 5th Avenue S.W.
Calgary, AB Canada T2P 0L4
(403) 265-1178 or Toll Free: 1-866-666-1178
information@harvestenergy.ca
www.harvestenergy.ca