Harvest Natural Resources Announces 2012 Second Quarter Results
HOUSTON, Aug. 9, 2012 /PRNewswire/ — Harvest Natural Resources, Inc. (NYSE: HNR) today announced 2012 second quarter net income and provided an operational update.
Harvest reported second quarter net income of approximately $8.2 million, or $0.20 per diluted share, compared to earnings of $89.8 million, or $2.23 per diluted share, for the same period last year. The second quarter 2012 results included exploration charges of $1.3 million, or $0.03 per diluted share, and $1.5 million, or $0.04 per diluted share, for transaction costs incurred related to the pending sale of our 32 percent interest in Petrodelta. Additionally during the second quarter, Harvest incurred $1.6 million, or $0.04 per diluted share, in discontinued operations related to the settlement of all outstanding claims with a private third-party related to the Antelope project. Excluding the exploration charges, transaction costs and settlement charges in discontinued operations, and net of the related tax benefits of $0.8 million, or $0.02 per diluted share, second quarter 2012 earnings would have been $11.8 million, or $0.29 per diluted share.
The second quarter 2011 results included the sale of our Utah properties for a net gain of $98.7 million.
Petrodelta reported net income during the second quarter of $72.0 million, as reported under International Financial Report Standards (IFRS), compared to $47.3 million for the same period in 2011. Harvest’s 32 percent share of Petrodelta’s net income for the second quarter as reported under U.S. GAAP was $18.1 million, compared to $14.6 million, for the same period one year ago.
Highlights for the second quarter of 2012 include:
Venezuela
- During the second quarter of 2012, Petrodelta drilled and completed two wells and sold approximately 3.31 million barrels of oil (MMBO) for a daily average of approximately 36,418 barrels of oil per day (BOPD), an increase of 19 percent over the same period in 2011;
- The two new wells were successfully drilled in the El Salto field with current total production from this field of approximately 16,000 BOPD;
- The ELS-45 was completed in the Lower Morichal formation producing 3,500 BOPD of 9.5 API oil, representing the highest well producing rate to date in El Salto;
- Petrodelta’s current production rate is approximately 39,000 BOPD;
- Facility expansion work at the El Salto and Temblador fields is underway;
- A third drilling rig, the new modular rig PDV-48, was assigned by PDVSA to Petrodelta and is on location in the Isleno field with the start of operations expected in September 2012;
- 2012 projected average production rate of 40,300 BOPD with capital expenditures projected at $300 million;
- On June 21, 2012, signed a Share Purchase Agreement (SPA) with PT Pertamina (Persero), the national oil company of Indonesia, to sell all of Harvest’s interests in Venezuela for $725.0 million in an all-cash transaction.
Gabon
- The Gabon government has agreed to extend the third exploration phase to four years until May 27, 2016;
- Preparing for October 2012 spud of the Tortue prospect targeting stacked pre-salt reservoirs with the Scarabeo 3 semi-submersible drilling unit;
- The Central 3-D Pre-Stack Time Migration (PSTM) was completed in July 2012.
Indonesia
- License commitments fulfilled through January 16, 2013, and planning to request a four year extension;
- Prospects and leads being matured in the Lariang and Karama Basins.
Oman
- Work commitment fulfilled through March 2013;
- Prospects and leads being matured for possible 2013 exploration well.
VENEZUELA
During the three months ended June 30, 2012, Petrodelta sold approximately 3.31 MMBO for a daily average of 36,418 BOPD, an increase of 19 percent over the same period in 2011 and 11 percent higher than the previous quarter. Petrodelta sold 0.49 billion cubic feet (BCF) of natural gas for a daily average of 5.4 million cubic feet per day (MMCFD), an increase of 12 percent over the same period in 2011, and a decrease of 22 percent from the previous quarter. Petrodelta’s current production rate is approximately 39,000 BOPD.
During the second quarter of 2012, Petrodelta drilled and completed two development wells in the El Salto field. The ELS-45 is a horizontal producer in the Lower Morichal formation, which contains the bulk of the oil in place in the El Salto field. It is currently producing 3,500 BOPD of 9.5 API oil and no water, representing the highest producing well rate to date in El Salto. Currently, Petrodelta is operating three drilling rigs and one workover rig and is continuing with infrastructure enhancement projects in the El Salto and Temblador fields.
A third drilling rig, the new modular rig PDV-48 is rigging up in the Isleno field and is expected to begin drilling operations in September 2012. The current production from the Isleno field is approximately 1,900 BOPD and is being trucked to the Uracoa field. Plans are underway to build a pipeline connection between the Isleno field and the main production facility at the Uracoa field.
Petrodelta’s production for 2012 is projected to average approximately 40,300 BOPD. The 2012 Petrodelta capital budget is expected to be approximately $300 million with a significant portion of that total related to infrastructure costs to support the further development of the Temblador and El Salto fields. Petrodelta expects to drill 22 oil wells and two water injector wells, and is anticipating finishing this year with five rigs operating with three more new rigs arriving at the end of the third quarter. The current plan is to retire one of the older rigs upon the arrival of the three new rigs so that four of the anticipated five drilling rigs will be new modular rigs that are fit-for-purpose for Petrodelta’s operations.
The average sales price for crude oil produced during the quarter was approximately $96.10 per barrel compared to $101.72 per barrel during the second quarter of 2011.
On June 21, 2012, Harvest announced that its wholly-owned subsidiary, HNR Energia B.V., had signed a definitive SPA with PT Pertamina (Persero), the national oil company of Indonesia, to sell all of Harvest’s interests in Venezuela for $725.0 million in an all-cash transaction. Net proceeds from the sale are estimated to be approximately $525.0 million after deductions for transaction related costs and taxes.
The Buyer will purchase Harvest’s 32 percent interest in Petrodelta, S.A. by purchasing HNR Energia B.V.’s 80 percent interest in Harvest-Vinccler Dutch Holding B.V. The effective date of the transaction is January 1, 2012.
The closing of the transaction is subject to, among other things, approval by the Government of the Bolivarian Republic of Venezuela, the Government of Indonesia in its capacity as the Buyer’s sole shareholder and a majority of Harvest’s stockholders. If all of the conditions to closing are not satisfied or not waived on or before March 21, 2013, either the Buyer or Harvest may terminate the SPA. The Boards of Directors of Harvest and Pertamina have each approved the transaction.
EXPLORATION AND OTHER ACTIVITIES
Dussafu Project – Gabon (“Dussafu PSC”)
On April 27, 2012, Harvest submitted notification to the Direction Generale Des Hydrocarbures (DGH) of our intent to enter the third exploration phase of the Dussafu PSC with an effective date of May 28, 2012. As stated in the Dussafu PSC, the third exploration phase of the Dussafu PSC has a $7.0 million ($4.7 million net to our 66.667 percent interest) work commitment over a two year period. The DGH has agreed to extend the third exploration phase to four years until May 27, 2016. Harvest paid a $1.0 million bonus ($0.7 million net to Harvest’s 66.667 percent interest) to enter the third exploration phase.
Operational activities during the six months ended June 30, 2012, included processing of the 545 square kilometers of seismic which was acquired in the fourth quarter of 2011. The 3-D Pre-Stack Time Migration (PSTM) was completed in July 2012. Depth processing and reprocessing of the inboard 3D commenced and is scheduled to be completed in the second quarter of 2013. Well planning is in progress to drill an exploration well in the fourth quarter of 2012 on the Tortue prospect to target stacked pre-salt Gamba and Dentale reservoirs as well as a secondary post-salt Madiela clastic reservoir. The prospect has mean unrisked prospective resources of 62 MMBO.
Harvest Dussafu B.V. has secured the use of a semi-submersible drilling unit to drill the Tortue exploration well offshore Gabon. The drilling unit, the Scarabeo 3, is owned and operated by Saipem S.p.A. and will be mobilized on location to spud the well in mid-October 2012.
Budong-Budong PSC – Indonesia
The license commitments have been fulfilled and the partners are planning to request a four year extension at the end of the initial six year term which expires on January 16, 2013. Prospects and leads are being matured for both the Lariang and Karama Basins. An exploration well is being planned for 2013.
Tately Budong-Budong N.V. is the operator of the Budong-Budong Block. Harvest owns a 64.4 percent working interest in the Budong-Budong PSC.
Oman Block 64 EPSA
All work commitments have been completed and post well studies are being conducted. A one year extension for the license has been granted until May 2013, at which time Harvest must decide whether to commit to the second phase of the license, which has a three year term and a one well commitment.
The remaining prospects and leads are being reviewed in light of the recent drilling results to mature possible drilling options in 2013.
Harvest has an 80 percent interest in Block 64 onshore Oman. Block 64 has an area of 3,874 square kilometers and was extracted from a pre-existing block (PDO’s Block 6) to accelerate exploration for gas and gas condensate by the Omani Ministry of Oil and Gas. Harvest is evaluating other opportunities in the region.
Non-GAAP Financial Measures
These measures are included due to the significant nature of Petrodelta’s earnings to Harvest. In this press release, Petrodelta’s adjusted EBITDA disclosure is not presented in accordance with accounting principles generally accepted in the United States (GAAP) and Petrodelta’s financials are not intended to be used in lieu of GAAP presentations of net income or cash flows from operating activities. Adjusted EBITDA is presented because we believe it provides additional information with respect to both the performance of our fundamental business activities as well as our ability to internally fund our future capital expenditures and working capital requirements. We also believe that financial analysts commonly use adjusted EBITDA to analyze Petrodelta’s performance.
The Company defines Adjusted EBITDA as net income (loss) before interest expense, investment earnings, current income taxes, and certain non-cash items in the Company’s statements of operations, including depreciation, depletion and amortization, accretion of asset retirement obligations, deferred income taxes, certain employee compensation charges and gains or losses from foreign exchange. Although we present selected items that we consider in evaluating our performance, you should also be aware that the items presented do not represent all items that affect comparability between the periods presented. Variations in our operating results are also caused by changes in volumes, prices, exchange rates and numerous other factors. These types of variations are not separately identified in this release, but will be discussed, as applicable, in management’s discussion and analysis of operating results in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.
A reconciliation of adjusted EBITDA to net income and cash flows from operating activities for the periods presented is included in the tables attached to this release.
Conference Call
Harvest will hold a conference call at 10:00 a.m. Central Daylight Time on Thursday, August 9, 2012, during which management will discuss Harvest’s 2012 second quarter results. The conference leader will be James A. Edmiston, President and Chief Executive Officer. To access the conference call, dial 888-256-9128 or 913-312-1472, five to ten minutes prior to the start time. The conference identification number is 4576497. A recording of the conference call will also be available for replay at 719-457-0820, passcode 4576497, through August 13, 2012.
The conference call will also be transmitted over the internet through the Company’s website at www.harvestnr.com. To listen to the live webcast, enter the web site fifteen minutes before the call to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay of the webcast will be available beginning shortly after the call and will remain on the web site for approximately 90 days.
The Company intends to file its second quarter 2012 Form 10-Q with the Securities and Exchange Commission on Thursday, August 9, 2012. A copy of the Form 10-Q will be available on the Company’s website at www.harvestnr.com.
About Harvest Natural Resources:
Harvest Natural Resources, Inc., headquartered in Houston, Texas, is an independent energy company with principal operations in Venezuela, exploration assets in Indonesia, West Africa, China and Oman and business development offices in Singapore and the United Kingdom. For more information visit the Company’s website at www.harvestnr.com.
CONTACT:
Stephen C. Haynes
Vice President, Chief Financial Officer
(281) 899-5716
This press release may contain projections and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. They include estimates and timing of expected oil and gas production, oil and gas reserve projections of future oil pricing, future expenses, planned capital expenditures, anticipated cash flow, timing and certainty of future transactions and our business strategy. All statements other than statements of historical facts may constitute forward-looking statements. Although Harvest believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Actual results may differ materially from Harvest’s expectations as a result of factors discussed in Harvest’s 2011 Annual Report on Form 10-K and other public filings.
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.
HARVEST NATURAL RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
June 30, December 31,
-------- ------------
2012 2011
---- ----
ASSETS:
-------
CURRENT ASSETS:
Cash and cash
equivalents $28,746 $58,946
Restricted cash - 1,200
Accounts and
notes
receivable, net
Dividend
receivable -
equity
affiliate 12,200 12,200
Joint
interest and
other 6,315 14,342
Notes
receivable - 3,335
Advances to
equity affiliate 2,538 2,388
Deferred income
taxes 2,628 2,628
Prepaid expenses
and other 1,692 728
Total current
assets 54,119 95,767
OTHER ASSETS 5,555 5,427
INVESTMENT IN EQUITY AFFILIATES 384,473 345,054
PROPERTY AND EQUIPMENT, net 71,226 66,799
------ ------
TOTAL ASSETS $515,373 $513,047
======== ========
LIABILITIES AND EQUITY:
-----------------------
CURRENT LIABILITIES:
Accounts payable,
trade and other $1,044 $7,381
Accounts payable
- carry
obligation - 3,596
Accrued expenses 8,896 15,247
Accrued Interest 1,008 1,372
Deferred tax
liability 4,835 4,835
Income taxes
payable 1,251 718
Current portion -
long term debt 15,551 -
Total current
liabilities 32,585 33,149
OTHER LONG-TERM LIABILITIES 956 908
LONG-TERM DEBT - 31,535
COMMITMENTS AND CONTINGENCIES - -
EQUITY:
STOCKHOLDERS' EQUITY:
Common stock and
paid-in capital 256,447 236,598
Retained earnings 200,051 193,283
Treasury stock (66,145) (66,104)
Total Harvest
stockholders'
equity 390,353 363,777
------- -------
Noncontrolling Interest 91,479 83,678
Total Equity 481,832 447,455
--------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $515,373 $513,047
------------------------------------------ ======== ========
HARVEST NATURAL RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts, unaudited)
Three months Ended
June 30,
-------------------
2012 2011
---- ----
EXPENSES:
Depreciation and
amortization $105 $119
Exploration expense 1,282 4,650
Dry hole costs 71 -
General and
administrative 6,524 7,049
7,982 11,818
----- ------
LOSS FROM OPERATIONS (7,982) (11,818)
------ -------
OTHER NON-OPERATING
INCOME (EXPENSE)
Investment earnings and
other 80 240
Interest expense (34) (1,704)
Debt conversion expense 20 -
Loss on extinguishment of
debt - (9,682)
Other non-operating
expenses (1,467) (244)
Loss on exchange rates (48) (32)
(1,449) (11,422)
------ -------
LOSS FROM CONSOLIDATED
COMPANIES CONTINUING
OPERATIONS BEFORE INCOME
TAXES
(9,431) (23,240)
Income tax expense
(benefit) (426) 260
------------------ ---- ---
LOSS FROM CONSOLIDATED
COMPANIES CONTINUING
OPERATIONS (9,005) (23,500)
Net income from
unconsolidated equity
affiliates 22,661 18,246
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS 13,656 (5,254)
DISCONTINUED OPERATIONS
Income (loss) from
discontinued operations (1,584) 65
Gain on sale of assets - 104,348
Income tax (expense)
benefit 595 (5,748)
Income (loss) from
discontinued operations (989) 98,665
---- ------
NET INCOME 12,667 93,411
Less: Net Income
Attributable to
Noncontrolling Interest 4,507 3,631
------------------------
NET INCOME ATTRIBUTABLE
TO HARVEST $8,160 $89,780
----------------------- ====== =======
Three months Ended
------------------
June 30, 2012 June 30, 2011
------------- -------------
NET INCOME (LOSS)
ATTRIBUTABLE TO HARVEST
PER COMMON SHARE: Basic Dilutive Basic Dilutive
Income (loss) from
continuing operations 9,149 9,149 (8,885) (8,885)
Discontinued operations (989) (989) 98,665 98,665
---- ---- ------ ------
Net income attributable
to Harvest 8,160 8,160 89,780 89,780
Weighted average common
shares outstanding 37,375 37,375 34,039 34,039
Effect of dilutive shares 3,424 - 6,221
----- --- -----
Weighted average common
shares including
dilutive effect 37,375 40,799 34,039 40,260
Per Share:
Income (loss) from
continuing operations $0.25 $0.22 $(0.26) $(0.22)
Discontinued operations $(0.03) $(0.02) $2.90 $2.45
------ ------ ----- -----
Net income attributable
to Harvest $0.22 $0.20 $2.64 $2.23
===== ===== ===== =====
HARVEST NATURAL
RESOURCES, INC.
CONSOLIDATED STATEMENTS
OF OPERATIONS
(in thousands except per
share amounts,
unaudited)
Six months Ended
June 30,
-----------------
2012 2011
---- ----
EXPENSES:
Depreciation and
amortization $210 $243
Exploration expense 2,725 5,839
Dry hole costs 5,617 -
General and
administrative 12,366 13,724
20,918 19,806
------ ------
LOSS FROM OPERATIONS (20,918) (19,806)
------- -------
OTHER NON-OPERATING
INCOME (EXPENSE)
Investment earnings and
other 149 385
Interest expense (428) (3,916)
Debt conversion expense (2,402) -
Loss on extinguishment of
debt - (9,682)
Other non-operating
expenses (1,723) (675)
Loss on exchange rates (70) (43)
(4,474) (13,931)
------ -------
LOSS FROM CONSOLIDATED
COMPANIES CONTINUING
OPERATIONS BEFORE INCOME
TAXES
(25,392) (33,737)
Income tax expense
(benefit) (1,646) 482
------------------- ------ ---
LOSS FROM CONSOLIDATED
COMPANIES CONTINUING
OPERATIONS (23,746) (34,219)
Net income from
unconsolidated equity
affiliates 39,419 36,740
NET INCOME FROM
CONTINUING OPERATIONS 15,673 2,521
DISCONTINUED OPERATIONS
Loss from discontinued
operations (1,699) (3,201)
Gain (Loss) on sale of
assets - 104,348
Income tax (expense)
benefit 595 (5,748)
--- ------
Income (loss) from
discontinued operations (1,104) 95,399
------ ------
NET INCOME 14,569 97,920
Less: Net Income
Attributable to
Noncontrolling Interest 7,801 7,058
------------------------ -----
NET INCOME ATTRIBUTABLE
TO HARVEST $6,768 $90,862
------------------------ ====== =======
Six Months Ended
----------------
June 30, 2012 June 30, 2011
------------- -------------
NET INCOME ATTRIBUTABLE
TO HARVEST PER COMMON
SHARE: Basic Dilutive Basic Dilutive
Income (loss) from
continuing operations 7,872 7,872 (4,537) (4,537)
Discontinued operations (1,104) (1,104) 95,399 95,399
------ ------ ------ ------
Net income attributable
to Harvest 6,768 6,768 90,862 90,862
Weighted average common
shares outstanding 36,130 36,130 33,992 33,992
Effect of dilutive shares - 1,469 - 6,035
--- ----- --- -----
Weighted average common
shares including
dilutive effect 36,130 37,599 33,992 40,027
Per Share:
Income (loss) from
continuing operations $0.22 $0.21 $(0.13) $(0.11)
Discontinued operations $(0.03) $(0.03) $2.80 $2.38
------ ------ ----- -----
Net income attributable
to Harvest $0.19 $0.18 $2.67 $2.27
===== ===== ===== =====
HARVEST NATURAL RESOURCES, INC.
-------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(in thousands, unaudited)
------------------------
Six months Ended
June 30,
-----------------
2012 2011
---- ----
Cash Flows From Operating Activities:
Net income $14,569 $97,920
Adjustments to
reconcile net
income to net
cash
used in operating
activities:
Depletion, depreciation and
amortization 210 1,053
Dry hole costs 5,617 -
Impairment of long-lived assets - 4,707
Amortization of debt financing costs 726 530
Amortization of discount on debt - 816
Gain on sale of assets - (103,933)
Debt conversion expense 1,939 -
Allowance for account and note
receivable 5,180 -
Writeoff of accounts payable, carry
obligation (3,596) -
Loss on early extinguishment of debt - 7,533
Net income from unconsolidated equity
affiliate (39,419) (36,740)
Share-based compensation-related
charges 2,124 2,673
Changes in
operating assets
and liabilities:
Accounts and notes receivable 6,182 (2,887)
Advances to equity affiliate (150) (296)
Prepaid expenses and other (950) 3,061
Accounts payable (6,337) 8,168
Accrued expenses (2,177) (2,469)
Accrued Interest (971) (418)
Other liabilities 48 (701)
Income taxes payable 533 6,061
--------------------
Net Cash Used In Operating Activities (16,472) (14,922)
------------------------------------- ------- -------
Cash Flows From Investing Activities:
Proceeds from sale
of assets - 217,833
Additions of
property and
equipment (14,205) (28,067)
Additions to
assets held for
sale - (31,742)
Proceeds from sale
of equity
affiliate - 1,385
Restricted cash 1,200 (7,323)
Investment costs (829) (62)
Net Cash Provided by (Used In)
Investing Activities (13,834) 152,024
------------------------------- ------- -------
Cash Flows From Financing Activities:
Net proceeds from
issuances of
common stock 273 416
Payments on long
term debt - (60,000)
Financing costs (167) (189)
Net Cash Provided by (Used In)
Financing Activities 106 (59,773)
------------------------------- --- -------
Net Increase (Decrease) in Cash (30,200) 77,329
Cash and Cash Equivalents at Beginning of Period 58,946 58,703
------------------------------------------------ ------ ------
Cash and Cash Equivalents at End of Period $28,746 $136,032
------------------------------------------ ======= ========
PETRODELTA, S. A.
STATEMENTS OF OPERATIONS
(in thousands except per BOE and per share amounts, unaudited)
Three months Ended Three months Ended
June 30, 2012 June 30, 2011
------------- -------------
Barrels of oil sold 3,314 2,782
MCF of gas sold 494 440
Total BOE 3,396 2,855
Total BOE -Net of 33%
Royalty 2,264 1,904
Average price/barrel $96.10 $101.72
Average price/mcf $1.54 $1.54
$ $/BOE - net $ $/BOE - net
--- ----------- --- -----------
REVENUES:
Oil sales $318,474 282,975
Gas sales 762 679
Royalties (106,097) (96,214)
213,139 94.14 187,440 98.45
------- ----- ------- -----
EXPENSES:
Operating expenses 20,063 8.86 18,684 9.81
Workovers 3,149 1.39 7,021 3.69
Depletion,
depreciation,
amortization 21,718 9.59 13,231 6.95
General and
administrative 4,944 2.19 3,782 1.99
Windfall profits tax 74,687 32.99 65,345 34.32
124,561 55.02 108,063 56.76
------- ----- ------- -----
INCOME FROM OPERATIONS 88,578 39.12 79,377 41.69
------ ----- ------ -----
Gain on exchange rate - - -
Interest earnings and
other 1 - 185 0.09
Interest expense (2,690) (1.18) (3,146) (1.65)
------ ----- ------ -----
Income before income
tax 85,889 37.94 76,416 40.13
Current income tax
expense 31,268 13.81 31,618 16.60
Deferred income tax
expense (benefit) (17,394) (7.68) (2,513) (1.32)
----- -----
NET INCOME 72,015 31.81 47,311 24.85
Adjustment to reconcile
to reported Net Income
(loss) from -
Unconsolidated Equity
Affiliate:
Deferred income tax
(benefit) expense 16,258 26
------ ---
Net income equity
affiliate 55,757 47,285
Equity interest in
unconsolidated equity
affiliate 40% 40%
---------------------- --- ---
Income before
amortization of excess
basis in equity
affiliate 22,303 18,914
Conform depletion
expense to GAAP 896 (216)
Amortization of excess
basis in equity
affiliate (538) (452)
Net income from
unconsolidated equity
affiliate $22,661 $18,246
---------------------- ------- -------
Non-GAAP Financial
Measures:
Reconcile NET INCOME as
reported under IFRS to
adjusted EBITDA:
NET INCOME $72,015 31.81 $47,311 24.85
Add back non-cash
items:
Depletion, depreciation
and amortization 21,718 9.59 13,231 6.95
Deferred income tax
expense (benefit) (17,394) (7.68) (2,513) (1.32)
CASH FROM OPERATIONS 76,339 33.72 58,029 30.48
Investment earnings and
other (1) - (185) (0.09)
Interest expense 2,690 1.18 3,146 1.65
Current income tax
expense 31,268 13.81 31,618 16.60
Adjusted EBITDA $110,296 48.71 $92,608 48.64
======== ===== ======= =====
Harvest 32% of Adjusted
EBITDA $35,295 15.59 $29,635 15.56
======= ===== ======= =====
PETRODELTA, S. A.
STATEMENTS OF OPERATIONS
(in thousands except per BOE and per share amounts, unaudited)
Six months Ended Six months Ended
June 30, 2012 June 30, 2011
------------- -------------
Barrels of oil sold 6,298 5,365
MCF of gas sold 1,124 910
Total BOE 6,485 5,517
Total BOE -Net of 33%
Royalty 4,324 3,678
Average price/barrel $102.09 $94.98
Average price/mcf $1.54 $1.54
$ $/BOE - net $ $/BOE - net
--- ----------- --- -----------
REVENUES:
Oil sales $642,971 $509,588
Gas sales 1,734 1,405
Royalty (213,436) (173,529)
431,269 99.74 337,464 91.75
------- ----- ------- -----
EXPENSES:
Operating expenses 41,644 9.63 32,966 8.96
Workovers 9,057 2.09 13,496 3.67
Depletion, depreciation
and amortization 39,640 9.17 25,718 6.99
General and
administrative 9,927 2.30 2,852 0.78
Windfall profits tax 159,425 36.87 92,471 25.14
259,693 60.06 167,503 45.54
------- ----- ------- -----
INCOME FROM OPERATIONS 171,576 39.68 169,961 46.21
------- ----- ------- -----
Investment earnings and
other 2 - 352 0.09
Interest expense (4,603) (1.06) (4,418) (1.20)
------ ----- ------ -----
Income before income
tax 166,975 38.62 165,895 45.10
Current income tax
expense 73,338 16.96 84,961 23.10
Deferred income tax
benefit (30,884) (7.14) (28,275) (7.69)
----- -----
NET INCOME 124,521 28.80 109,209 29.69
Adjustment to reconcile
to reported Net Income
from
Unconsolidated Equity
Affiliate:
Deferred income tax
expense 28,299 17,897
------ ------
Net income equity
affiliate 96,222 91,312
Equity interest in
unconsolidated equity
affiliate 40% 40%
---------------------- --- ---
Income before
amortization of excess
basis in equity
affiliate 38,489 36,525
Conform depletion
expense to GAAP 1,957 (297)
Amortization of excess
basis in equity
affiliate (1,027) (873)
Net income from
unconsolidated equity
affiliate $39,419 $35,355
---------------------- ------- -------
Non-GAAP Financial
Measures:
Reconcile NET INCOME as
reported under IFRS to
adjusted EBITDA:
NET INCOME $124,521 28.80 $109,209 29.69
Add back non-cash
items:
Depletion, depreciation
and amortization 39,640 9.17 25,718 6.99
Deferred income tax
expense (benefit) (30,884) (7.14) (28,275) (7.69)
CASH FROM OPERATIONS 133,277 30.83 106,652 28.99
Investment earnings and
other (2) - (352) (0.09)
Interest expense 4,603 1.06 4,418 1.20
Current income tax
expense 73,338 16.96 84,961 23.10
Adjusted EBITDA $211,216 48.85 $195,679 53.20
======== ===== ======== =====
Harvest 32% of Adjusted
EBITDA $67,589 15.63 $62,617 17.02
======= ===== ======= =====
SOURCE Harvest Natural Resources
