Harvest Natural Resources Announces 2012 Third Quarter Results
HOUSTON, Nov. 9, 2012 /PRNewswire/ — Harvest Natural Resources, Inc. (NYSE: HNR) today announced 2012 third quarter net income and provided an operational update.
Harvest reported third quarter net income of approximately $5.8 million, or $0.15 per diluted share, compared to earnings of $7.7 million, or $0.20 per diluted share, for the same period last year. The third quarter 2012 results included exploration charges of $1.5 million, or $0.04 per diluted share, and $1.1 million, or $0.03 per diluted share, for transaction costs incurred related to the pending sale of our 32 percent interest in Petrodelta. Additionally, during the third quarter, Harvest incurred $1.0 million, or $0.02 per diluted share, in debt conversion expense and $0.6 million, or $0.02 per diluted share, in discontinued operations related to income taxes. Excluding the exploration charges, transaction costs, debt conversion expense, and discontinued operations charges, third quarter 2012 earnings would have been $10.0 million, or $0.26 per diluted share.
Petrodelta reported net income during the third quarter of $45.7 million, as reported under International Financial Report Standards (IFRS), compared to $57.0 million for the same period in 2011. Petrodelta’s decrease in net income for the quarter was primarily due to higher operational costs of $14.2 million resulting from a 30 percent increase in salaries and related benefits retroactive to October 2011. Harvest’s 32 percent share of Petrodelta’s net income for the third quarter as reported under U.S. GAAP was $16.2 million, compared to $14.8 million, for the same period one year ago.
Highlights for the third quarter of 2012 include:
Venezuela
- During the third quarter of 2012, Petrodelta drilled and completed four wells and sold approximately 3.5 million barrels of oil (MMBO) for a daily average of approximately 38,173 barrels of oil per day (BOPD), an increase of 16 percent over the same period in 2011;
- Of the four new wells successfully drilled, three were in the El Salto field with current total production from this field of approximately 16,500 BOPD; the fourth well was drilled in the Temblador field;
- Petrodelta’s current production rate is approximately 39,000 BOPD;
- Two new drilling rigs, the modular rig PDV-48 and the PDV-86 are expected to start operations by the end of November 2012;
- The 2012 projected average production rate is 37,000 BOPD, with capital expenditures projected at $200 million;
- Harvest and PT Pertamina (Persero) met in September 2012 to evaluate the progress toward the closing of the sale by Harvest of its interests in Venezuela. Both parties agreed to continue pursuing the various approvals required to close the transaction.
Gabon
- The semi-submersible drilling unit, the Scarabeo 3, is expected to spud the next exploration well in mid-November 2012. This well will be drilled on the Tortue prospect targeting stacked pre-salt reservoirs.
Corporate
- On October 12, 2012, Harvest sold $79.8 million aggregate principal amount of 11% senior unsecured notes due October 11, 2014;
- Harvest has extinguished all of the senior unsecured convertible notes issued on February 17, 2010.
VENEZUELA
During the three months ended September 30, 2012, Petrodelta sold approximately 3.5 MMBO for a daily average of 38,173 BOPD, an increase of 16 percent over the same period in 2011 and 5 percent higher than the previous quarter. Petrodelta sold 0.41 billion cubic feet (BCF) of natural gas for a daily average of 4.5 million cubic feet per day (MMCFD), decreasing 31 percent over the same period in 2011, and a decrease of 17 percent from the previous quarter. Petrodelta’s current production rate is approximately 39,000 BOPD.
During the third quarter of 2012, Petrodelta drilled and completed four development wells, three in the El Salto field and one in the Temblador field. Currently, Petrodelta is operating two drilling rigs and one workover rig and is continuing with infrastructure enhancement projects in the El Salto and Temblador fields.
Two new drilling rigs are rigging up, the PDV-48 in the Isleno field and the PDV-86 in El Salto field; they are expected to begin drilling operations by the end of November 2012. The current production from the Isleno field is approximately 1,960 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 37,000 BOPD. The 2012 Petrodelta capital budget is expected to be approximately $200.0 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 12 oil wells, and is anticipating finishing this year with five rigs on site with four new rigs, two already rigging up and two more arriving at the end of the fourth quarter. The current plan is to retire one of the older rigs upon the arrival of the 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 $92.43 per barrel, compared to $100.62 per barrel during the third quarter of 2011.
As previously announced, Harvest and PT Pertamina (Persero) met in September 2012 to evaluate the progress toward the closing of the sale by Harvest of its interests in Venezuela and agreed to continue pursuing the various approvals required to close the transaction.
EXPLORATION AND OTHER ACTIVITIES
Dussafu Project – Gabon (Dussafu PSC)
Operational activities during the three months ended September 30, 2012, included completion of the processing of 545 square kilometers of seismic which was acquired in the fourth quarter of 2011 and well planning for the drilling of an exploration well in the fourth quarter. The 3-D Pre-Stack Time Migration (PSTM) was completed in July 2012. A depth imaging project commenced in the third quarter with 3-D Pre-Stack Depth Migration (PSDM) of this Central 2011 survey and the 2005 M’Bya inboard survey, the project is expected to be completed in the second quarter of 2013. Well planning progressed to drill an exploration well in November of 2012 on the Tortue prospect targeting stacked pre-salt reservoirs with mean unrisked prospective resource of 62 MMBO.
The semi-submersible drilling unit, the Scarabeo 3, owned and operated by Saipem S.p.A, will be mobilized on location and is projected to spud in mid-November 2012.
Budong-Budong PSC – Indonesia
Operational activities during the three months ended September 30, 2012, included a review of geological and geophysical data obtained from the drilling of Lariang-1 (LG-1) and Karama-1 (KD-1) wells to upgrade the prospectivity of the block and to define a prospect for potential drilling in 2013. Based on the multiple oil and gas shows encountered in both LG-1 and KD-1, an exploration program targeting the Pliocene and Miocene sands encountered in the previous two wells is being matured. Operations completed remapping of both the Lariang and Karama Basins with eight prospects in the Lariang Basin and five prospects in the Karama Basin having been identified in the Pliocene, Middle-Late Miocene and Eocene sands. The Joint Venture has high graded the Madjene prospect in the Lariang Basin as the preferred prospect for 2013 drilling with stacked Pliocene and Miocene mean unrisked prospective resource of 96 MMBO.
The initial exploration term of the Budong PSC expires on January 15, 2013. In September 2012, the operator of the Budong PSC, on behalf of Harvest and the other co-venturer, submitted a request to BPMIGAS, Indonesia’s oil and gas regulatory authority, under the terms of the Budong PSC for a four year extension of the initial six year exploration term of the Budong PSC. The request for extension of the initial exploration term includes a firm exploration well in late 2013. The extension of the initial exploration term will enable the joint venture to continue exploration activities on the Budong PSC. The granting of such request for an extension of the initial exploration term may not be unreasonably withheld.
Oman Block 64 EPSA
Operational activities during the three months ended September 30, 2012, included post-well evaluation and review of geological and geophysical data obtained from the drilling of the Mafraq South-1 (“MFS-1″) and Al Ghubar North-1 (“AGN-1″) wells. Work continues on Block 64 EPSA to mature other drilling opportunities for a possible exploration well in the Second Phase of the license.
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.
CORPORATE
On October 12, 2012, subsequent to the third quarter financial statements, Harvest sold $79.8 million aggregate principal amount of 11% senior unsecured notes due October 11, 2014, and warrants to purchase up to 686,761 shares of its common stock with an exercise price of $10.00 per share. The warrants can be exercised at any time up until the three-year anniversary of the closing. If all of the warrants were exercised, the impact on dilution of the common shares outstanding would be approximately 1.8 percent.
The notes were issued at a price of 96 percent of principal amount. The purchase price of the notes was paid in cash, except for approximately $10.5 million in principal amount, which was exchanged by a single purchaser for a combination of approximately $6.0 million in face value of that purchaser’s existing 8.25% senior convertible notes issued by the Company in 2010 and the value agreed to by the Company and the noteholder, that otherwise would have been attained by the noteholder had the noteholder converted the note into 1,059,751 shares of common stock; the remaining $3.0 million in face value of that convertible note was converted into shares of common stock under the terms of the indenture governing that convertible note.
The net cash proceeds of the offering to Harvest were approximately $63.5 million after deducting the issuance discount from the face value of the notes, placement fees, and other transaction costs. Harvest intends to use the net proceeds of the offering to fund capital expenditures planned for Gabon and other potential projects, for working capital needs and general corporate purposes.
Also, as of October 12, 2012, the Company has extinguished all the senior convertible notes and accrued interest due, which was originally issued on February 17, 2012.
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 September 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. CST on Friday, November 9, 2012, during which management will discuss Harvest’s 2012 third quarter results. The conference leader will be James A. Edmiston, President and Chief Executive Officer. To access the conference call, dial 800-309-1245 or 719-325-2302, five to ten minutes prior to the start time. The conference identification number is 6817420. A recording of the conference call will also be available for replay at 719-457-0820, passcode 6817420, through November 16, 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 website 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 third quarter 2012 Form 10-Q with the Securities and Exchange Commission on Friday, November 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)
------------------------
September 30, December 31,
------------- ------------
2012 2011
---- ----
ASSETS:
-------
CURRENT ASSETS:
Cash and cash
equivalents $20,419 $58,946
Restricted cash - 1,200
Accounts and
notes
receivable, net
Dividend
receivable -
equity
affiliate - 12,200
Joint
interest and
other 3,411 14,342
Notes
receivable - 3,335
Advances to
equity affiliate 2,690 2,388
Deferred income
taxes 2,628 2,628
Prepaid expenses
and other 2,435 728
Total current
assets 31,583 95,767
OTHER ASSETS 5,730 5,427
LONG-TERM RECEIVABLE - DIVIDEND, EQUITY AFFILIATE 12,200 -
INVESTMENT IN EQUITY AFFILIATES 404,705 345,054
PROPERTY AND EQUIPMENT, net 73,064 66,799
------ ------
TOTAL ASSETS $527,282 $513,047
======== ========
LIABILITIES AND EQUITY:
-----------------------
CURRENT LIABILITIES:
Accounts payable,
trade and other $952 $7,381
Accounts payable
- carry
obligation - 3,596
Accrued expenses 9,164 15,247
Accrued Interest 679 1,372
Deferred tax
liability 4,835 4,835
Income taxes
payable 1,579 718
Current portion -
long term debt 9,000 -
Total current
liabilities 26,209 33,149
OTHER LONG-TERM LIABILITIES 1,054 908
LONG-TERM DEBT - 31,535
COMMITMENTS AND CONTINGENCIES - -
EQUITY:
STOCKHOLDERS' EQUITY:
Common stock and
paid-in capital 264,781 236,598
Retained earnings 205,868 193,283
Treasury stock (66,145) (66,104)
Total Harvest
stockholders'
equity 404,504 363,777
------- -------
Noncontrolling Interest 95,515 83,678
Total Equity 500,019 447,455
----------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $527,282 $513,047
------------------------------------------ ======== ========
HARVEST NATURAL RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts, unaudited)
Three Months Ended September
30,
-----------------------------
2012 2011
---- ----
EXPENSES:
Depreciation and
amortization $106 $111
Exploration
expense 1,475 1,575
General and
administrative 5,080 4,291
6,661 5,977
----- -----
LOSS FROM
OPERATIONS (6,661) (5,977)
------ ------
OTHER NON-
OPERATING
INCOME
(EXPENSE)
Investment
earnings and
other 82 159
Interest expense (19) (806)
Debt conversion
expense (958) -
Loss on
extinguishment
of debt - -
Other non-
operating
expenses (1,078) (316)
Loss on exchange
rates (24) (43)
(1,997) (1,006)
------ ------
LOSS FROM
CONSOLIDATED
COMPANIES
CONTINUING
OPERATIONS
BEFORE INCOME
TAXES (8,658) (6,983)
Income tax
expense 1,126 226
---------- ----- ---
LOSS FROM
CONSOLIDATED
COMPANIES
CONTINUING
OPERATIONS (9,784) (7,209)
Net income from
unconsolidated
equity
affiliates 20,232 18,476
NET INCOME FROM
CONTINUING
OPERATIONS 10,448 11,267
DISCONTINUED
OPERATIONS
Gain on sale of
assets - 36
Income tax
(expense)
benefit (595) -
Income from
discontinued
operations (595) 36
---- ---
NET INCOME 9,853 11,303
Less: Net
Income
Attributable to
Noncontrolling
Interest 4,036 3,592
----------------
NET INCOME
ATTRIBUTABLE TO
HARVEST $5,817 $7,711
---------------- ====== ======
Three Months Ended
------------------
September 30, 2012 September 30, 2011
------------------ ------------------
NET INCOME ATTRIBUTABLE
TO HARVEST PER COMMON
SHARE: Basic Dilutive Basic Dilutive
----- -------- ----- --------
Income from continuing
operations 6,412 6,412 7,675 7,675
Discontinued operations (595) (595) 36 36
---- ---- --- ---
Net income attributable
to Harvest 5,817 5,817 7,711 7,711
Weighted average common
shares outstanding 38,067 38,067 34,174 34,174
Effect of dilutive shares 713 - 4,381
--- --- -----
Weighted average common
shares including
dilutive effect 38,067 38,780 34,174 38,555
Per Share:
Income from continuing
operations $0.17 $0.17 $0.23 $0.20
Discontinued operations $(0.02) $(0.02) $ - $ -
------ ------ ---------------------- ----------------------
Net income attributable
to Harvest $0.15 $0.15 $0.23 $0.20
----- ----- ----- =====
HARVEST NATURAL
RESOURCES, INC.
CONSOLIDATED
STATEMENTS OF
OPERATIONS
(in thousands
except per share
amounts,
unaudited)
Nine Months Ended September 30,
-------------------------------
2012 2011
---- ----
EXPENSES:
Depreciation and
amortization $316 $354
Exploration expense 4,200 7,414
Dry hole costs 5,617 -
General and
administrative 17,446 18,015
27,579 25,783
------ ------
LOSS FROM
OPERATIONS (27,579) (25,783)
------- -------
OTHER NON-
OPERATING INCOME
(EXPENSE)
Investment earnings
and other 231 544
Interest expense (447) (4,722)
Debt conversion
expense (3,360) -
Loss on
extinguishment of
debt - (9,682)
Other non-
operating expenses (2,801) (991)
Loss on exchange
rates (94) (86)
(6,471) (14,937)
------ -------
LOSS FROM
CONSOLIDATED
COMPANIES
CONTINUING
OPERATIONS
BEFORE INCOME TAXES (34,050) (40,720)
Income tax expense
(benefit) (520) 708
------------------ ---- ---
LOSS FROM
CONSOLIDATED
COMPANIES
CONTINUING
OPERATIONS (33,530) (41,428)
Net income from
unconsolidated
equity affiliates 59,651 55,216
NET INCOME FROM
CONTINUING
OPERATIONS 26,121 13,788
DISCONTINUED
OPERATIONS
Loss from
discontinued
operations (1,699) (3,201)
Gain (loss) on sale
of assets - 104,384
Income tax
(expense) benefit - (5,748)
--- ------
Income (loss) from
discontinued
operations (1,699) 95,435
------ ------
NET INCOME 24,422 109,223
Less: Net Income
Attributable to
Noncontrolling
Interest 11,837 10,650
----------------- ------
NET INCOME
ATTRIBUTABLE TO
HARVEST $12,585 $98,573
---------------- ======= =======
Nine Months Ended
-----------------
September 30, 2012 September 30, 2011
------------------ ------------------
NET INCOME ATTRIBUTABLE
TO HARVEST PER COMMON
SHARE: Basic Dilutive Basic Dilutive
----- -------- ----- --------
Income from continuing
operations 14,284 14,284 3,138 3,138
Discontinued operations (1,699) (1,699) 95,435 95,435
------ ------ ------ ------
Net income attributable
to Harvest 12,585 12,585 98,573 98,573
Weighted average common
shares outstanding 36,780 36,780 34,053 34,053
Effect of dilutive shares - 234 - 5,694
--- --- --- -----
Weighted average common
shares including
dilutive effect 36,780 37,014 34,053 39,747
Per Share:
Income from continuing
operations $0.39 $0.39 $0.09 $0.08
Discontinued operations $(0.05) $(0.05) $2.80 $2.40
------ ------ ----- -----
Net income attributable
to Harvest $0.34 $0.34 $2.89 $2.48
----- ----- ----- =====
HARVEST NATURAL RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Nine Months Ended September 30,
-------------------------------
2012 2011
---- ----
Cash Flows From Operating Activities:
Net income $24,422 $109,223
Adjustments to reconcile
net income to net cash
used in operating
activities:
Depletion,
depreciation and
amortization 316 1,164
Dry hole costs 5,617 -
Impairment of
long-lived
assets - 4,707
Amortization of
debt financing
costs 898 753
Amortization of
discount on debt - 816
Gain on sale
of assets - (103,969)
Debt
conversion
expense 2,502 -
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 (59,651) (55,216)
Share-based
compensation-
related charges 2,809 3,659
Changes in operating
assets and
liabilities:
Accounts and
notes receivable 9,086 (5,971)
Advances to
equity
affiliate (302) (582)
Prepaid
expenses and
other (1,693) 2,330
Accounts
payable (6,429) 6,558
Accrued
expenses (1,562) (1,533)
Accrued Interest (1,329) (1,269)
Other liabilities 146 (877)
Income taxes
payable 861 2,834
-------------
Net Cash Used In
Operating
Activities (22,725) (29,840)
----------------- ------- -------
Cash Flows From Investing Activities:
Proceeds from
sale of assets - 217,833
Additions of property
and equipment (16,252) (58,474)
Additions to
assets held for
sale - (31,422)
Proceeds from sale of
equity affiliate - 1,385
Restricted
cash 1,200 -
Investment
costs (984) (876)
Net Cash Provided by
(Used In) Investing
Activities (16,036) 128,446
-------------------- ------- -------
Cash Flows From Financing Activities:
Net proceeds from
issuances of common
stock 700 924
Payments on long
term debt - (60,000)
Financing
costs (466) (189)
Net Cash Provided by
(Used In) Financing
Activities 234 (59,265)
-------------------- --- -------
Net Increase
(Decrease) in
Cash (38,527) 39,341
Cash and Cash Equivalents at Beginning of Period 58,946 58,703
------------------------------------------------ ------ ------
Cash and Cash Equivalents at End of Period $20,419 $98,044
------------------------------------------ ======= =======
PETRODELTA, S. A.
STATEMENTS OF OPERATIONS
(in thousands except per BOE and per share amounts, unaudited)
Three Months Ended Three Months Ended
September 30, 2012 September 30, 2011
------------------- -------------------
Barrels of oil sold 3,512 3,031
MCF of gas sold 412 594
Total BOE 3,581 3,130
Total BOE -Net of 33%
Royalty 2,387 2,087
Average price/barrel $92.43 $100.62
Average price/mcf $1.54 $1.54
$ $/BOE - net $ $/BOE - net
--- ----------- --- -----------
REVENUES:
Oil sales $324,608 304,969
Gas sales 635 917
Royalties (108,371) (98,013)
216,872 90.85 207,873 99.61
------- ----- ------- -----
EXPENSES:
Operating expenses 34,246 14.35 20,027 9.60
Workovers 2,855 1.20 4,856 2.33
Depletion, depreciation,
amortization 22,238 9.32 15,687 7.52
General and
administrative 5,418 2.26 3,310 1.59
Windfall profits tax 71,982 30.15 69,424 33.26
136,739 57.28 113,304 54.30
------- ----- ------- -----
INCOME FROM OPERATIONS 80,133 33.57 94,569 45.31
------ ----- ------ -----
Gain on exchange rate - - -
Interest earnings and
other 2 - 161 0.08
Interest expense (2,975) (1.25) (2,107) (1.01)
------ ----- ------ -----
Income before income tax 77,160 32.32 92,623 44.38
Current income tax
expense 32,678 13.69 52,319 25.07
Deferred income tax
benefit (1,237) (0.52) (16,709) (8.01)
----- -----
NET INCOME 45,719 19.15 57,013 27.32
Adjustment to reconcile
to reported Net Income
(loss) from -
Unconsolidated Equity
Affiliate:
Deferred income tax
(benefit) expense (2,501) 9,939
------ -----
Net income equity
affiliate 48,220 47,074
Equity interest in
unconsolidated equity
affiliate 40% 40%
---------------------- --- ---
Income before
amortization of excess
basis in equity
affiliate 19,288 18,830
Conform depletion
expense to GAAP 1,511 142
Amortization of excess
basis in equity
affiliate (567) (496)
Net income from
unconsolidated equity
affiliate $20,232 $18,476
---------------------- ------- -------
Non-GAAP Financial
Measures:
Reconcile NET INCOME as
reported under IFRS to
adjusted EBITDA:
NET INCOME $45,719 19.15 $57,013 27.32
Add back non-cash
items:
Depletion, depreciation
and amortization 22,238 9.32 15,687 7.52
Deferred income tax
benefit (1,237) (0.52) (16,709) (8.01)
CASH FROM OPERATIONS 66,720 27.95 55,991 26.83
Investment earnings and
other (2) - (161) (0.08)
Interest expense 2,975 1.25 2,107 1.01
Current income tax
expense 32,678 13.69 52,319 25.07
Adjusted EBITDA $102,371 42.89 $110,256 52.83
======== ===== ======== =====
Harvest 32% of Adjusted
EBITDA $32,759 13.72 $35,282 16.91
======= ===== ======= =====
PETRODELTA, S. A.
STATEMENTS OF OPERATIONS
(in thousands except per BOE and per share amounts, unaudited)
Nine Months Ended Nine Months Ended
September 30, 2012 September 30, 2011
------------------ ------------------
Barrels of oil sold 9,810 8,396
MCF of gas sold 1,536 1,504
Total BOE 10,066 8,647
Total BOE -Net of 33%
Royalty 6,711 5,765
Average price/barrel $98.63 $97.02
Average price/mcf $1.54 $1.54
$ $/BOE - net $ $/BOE - net
--- ----------- --- -----------
REVENUES:
Oil sales $967,579 $814,557
Gas sales 2,369 2,322
Royalty (321,807) (271,542)
648,141 96.58 545,337 94.59
------- ----- ------- -----
EXPENSES:
Operating expenses 75,890 11.31 52,993 9.19
Workovers 11,912 1.77 18,352 3.18
Depletion, depreciation
and amortization 61,878 9.22 41,405 7.18
General and
administrative 15,345 2.29 6,162 1.07
Windfall profits tax 231,407 34.48 161,895 28.08
396,432 59.07 280,807 48.70
------- ----- ------- -----
INCOME FROM OPERATIONS 251,709 37.51 264,530 45.89
------- ----- ------- -----
Investment earnings and
other 4 - 513 0.09
Interest expense (7,578) (1.13) (6,525) (1.14)
------ ----- ------ -----
Income before income tax 244,135 36.38 258,518 44.84
Current income tax
expense 106,016 15.80 137,280 23.81
Deferred income tax
benefit (32,121) (4.79) (44,984) (7.80)
----- -----
NET INCOME 170,240 25.37 166,222 28.83
Adjustment to reconcile
to reported Net Income
from
Unconsolidated Equity
Affiliate:
Deferred income tax
expense 25,798 27,836
------ ------
Net income equity
affiliate 144,442 138,386
Equity interest in
unconsolidated equity
affiliate 40% 40%
---------------------- --- ---
Income before
amortization of excess
basis in equity
affiliate 57,777 55,354
Conform depletion
expense to GAAP 3,468 (155)
Amortization of excess
basis in equity
affiliate (1,594) (1,369)
Net income from
unconsolidated equity
affiliate $59,651 $53,830
---------------------- ------- -------
Non-GAAP Financial
Measures:
Reconcile NET INCOME as
reported under IFRS to
adjusted EBITDA:
NET INCOME $170,240 25.37 $166,222 28.83
Add back non-cash
items:
Depletion, depreciation
and amortization 61,878 9.22 41,405 7.18
Deferred income tax
benefit (32,121) (4.79) (44,984) (7.80)
CASH FROM OPERATIONS 199,997 29.80 162,643 28.21
Investment earnings and
other (4) - (513) (0.09)
Interest expense 7,578 1.13 6,525 1.14
Current income tax
expense 106,016 15.80 137,280 23.81
Adjusted EBITDA $313,587 46.73 $305,935 53.07
======== ===== ======== =====
Harvest 32% of Adjusted
EBITDA $100,348 14.95 $97,899 16.98
======== ===== ======= =====
SOURCE Harvest Natural Resources
