Harvest retained an independent engineering firm to estimate its share of Petrodelta's reserves as of December 31, 2010. 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, 2010, the six fields held by Petrodelta had gross proved reserves of 195 million barrels of oil (MMBO) and 235 billion cubic feet (Bcf) of natural gas, or 42 MMBO and 50 Bcf of natural gas net to Harvest?s 32 percent interest after a one-third royalty. The estimated unrisked 3P reserves for the fields are 957 million barrels and 459 Bcf of natural gas, or 204 million barrels and 98 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 $1,200 million based on a realized oil price of $70.43 per barrel and a net realized gas price of $1.52 per mcf. The pre-tax future net income of the estimated unrisked 3P reserves, discounted at 10 percent, is $4,428 million based on the same oil and gas prices.