January
8, 2004
Harvest to complete Venezuela´s
oil and gas field study by March-April
(BNamericas.com) - "US
oil company Harvest Natural Resources (NYSE: HNR)
plans to complete a technical study of two oil
and gas fields near its South Monagas fields in
Venezuela by March-April, Harvest CFO Steven Tholen
told BNamericas.
Harvest signed an agreement through its Venezuelan
operating company Benton-Vinccler with state oil
company PDVSA to evaluate the two fields, Temblador
and El Salto, in November 2003.
'If there's an opportunity to expand the business,
we would like to consider those opportunities
and see if we can put something together that
makes sense for both sides,' Tholen said.
Harvest's discretionary cash flow is projected
to exceed capital expenditures by some US$25mn
in 2004, the company said in a statement, some
of which could be used to develop the new fields,
Tholen said.
The purpose of the study is to "determine
how much oil and gas is recoverable, how much
drilling would have to be done, what the operating
costs might be and what processing requirements
might be," Tholen said. 'All of these are
unknowns at this point.'
Harvest has a period of six months to submit a
field development plan and negotiate a production
contract with PDVSA under the terms of the agreement.
Harvest expects its hydrocarbons production to
increase 50-75% from 2003 to 33,000-38,000 barrels
of oil equivalent a day (boe/d) in Venezuela in
2004, the statement said. The company produced
an average of 21,400boe/d in 2003.
Oil production is expected to increase to 22,000-26,000b/d
from 20,200b/d in 2003, while gas production is
expected to average 70-80 million cubic feet a
day (mcf/d). Such production estimates will yield
net income in the range of US$15mn-20mn, assuming
a WTI oil price of US$26/b for 2004, the statement
said.
Harvest delivered first gas to Venezuela's state
oil company PDVSA on November 25 from the Uracoa
and Bombal fields in the South Monagas Unit (SMU),
and is currently shipping about 70mcf/d, Tholen
said.
Harvest plans to drill 10 wells in the Uracoa
Field starting in the second quarter this year,
Harvest president and CEO Peter Hill said in the
statement. The main objective of the drilling
program will be to access oil reserves under the
gas cap, enhancing both oil and gas production
capacity.
Harvest's capital expenditures for 2004 are projected
to fall to US$30mn-35mn from US$58mn in 2003,
mainly because investment in the project to supply
gas to PVDSA has been completed. That's behind
us now at this point in time, and the capital
expenditures we have for 2004 are primarily for
the drilling of oil wells [in Urucoa],' Tholen
said".
