Petrodelta Reserves
Harvest retained an independent engineering firm to estimate its share of Petrodelta's reserves as of December 31, 2008. The proved reserve and resource potential estimates were based on a detailed study of the properties. The proved reserves conform to the definition set forth in the Securities and Exchange Commission's Regulation S-X, as clarified by subsequent Commission Staff Accounting Bulletins. The probable and possible reserves were determined based on Society of Petroleum Engineers and World Petroleum guidelines using deterministic methodology.
Based on the reserve report completed by an independent third party engineering firm, as of December 31, 2008, the six fields held by Petrodelta had gross proved reserves of 160 million barrels of oil and 254 billion cubic feet (Bcf) of natural gas, or 34 million barrels of oil and 54 Bcf of natural gas net to Harvest’s 32 percent interest after a one-third royalty. The estimated additional unrisked probable and possible reserves for the fields are 382 million barrels and 215 Bcf of natural gas, or 81 million barrels and 46 Bcf net to Harvest’s 32 percent interest after a one-third royalty. The pre-tax future net income of the proved reserves, discounted at 10 percent, is $263 million based on a realized oil price of $34.38 per barrel and a WTI price of $40.62 per barrel. The pre-tax future net income of the estimated additional unrisked probable and possible reserves, discounted at 10 percent, is $389 million based on a realized oil price of $34.38 per barrel.
