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Reserves Information

Harvest retained qualified, Independent Reserves Evaluators to evaluate and prepare reports on 100% of Harvest's crude oil and natural gas reserves as of December 31, 2012. Harvest's reserves were evaluated by McDaniel (who evaluated approximately 15% of Harvest's total proved plus probable reserves) and GLJ (who evaluated approximately 85% of Harvest's total proved plus probable reserves). All of Harvest's reserves were evaluated using the price and cost assumptions of McDaniel as at January 1, 2013.

The Statement summarizes the crude oil, natural gas liquids and natural gas reserves of Harvest and the Operating Subsidiaries and the net present values of future net revenue for these reserves using forecast prices and costs. The Reserve Report has been prepared by the Independent Reserve Evaluators in accordance with other requirements contained in NI 51-101. Additional information not required by NI 51-101 has been presented to provide continuity and additional information which Harvest believes is important to the readers of this information. Harvest engaged the Independent Reserves Evaluators to provide an evaluation of proved and proved plus probable reserves and no attempt was made to evaluate possible reserves.

All of Harvest and the Operating Subsidiaries' reserves are in Canada and, specifically, in the provinces of Alberta, British Columbia and Saskatchewan.

It should not be assumed that the estimates of future net revenues presented in the tables below represent the fair market value of the reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variance could be material. The recovery and reserve estimates of Harvest and the Operating Subsidiaries' crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquid reserves may be greater than or less than the estiamtes provided herein.

The following tables summarize certain information contained in Harvest’s reserves report.

Harvest Reserves Summary as at December 31, 2012 – Forecast Prices and Costs

 

Gross(1)

 

 

Reserves Category

Light & Medium Crude Oil

 (MMbbls)

Heavy Oil

 (MMbbls)

Bitumen

 (MMbbls)

Natural Gas(3)

(Bcf)

Natural Gas Liquids

(MMbbls)

Total Oil Equivalent 2012

 (MMboe)

Total Oil Equivalent

2011

(MMboe)

Proved


 


 


 

 


 


 


 

Developed Producing

34.8

42.0

-

220.2

10.6

124.0

138.3

Developed Non-Producing

1.9

1.3

-

13.3

0.4

5.9

7.5

Undeveloped

3.4

7.2

94.1

82.6

4.0

122.4

118.8

Total Proved

40.1

50.5

94.1

316.1

15.0

252.3

264.6

Probable

18.7

22.8

165.1

153.9

9.3

241.5

240.4

Total Proved Plus Probable

58.8

73.2

259.2

470.0

24.3

493.8

505.0

 

Net(2)

 

Reserves Category

Light & Medium Crude Oil

 

(MMbbls)

Heavy

Oil

 

(MMbbls)

Bitumen

 

(MMbbls)

Natural Gas(3) 

 

(Bcf)

Natural Gas Liquids

 

(MMbbls)

Total Oil Equivalent

2012

 

(MMboe)

Total Oil Equivalent 2011

 

 (MMboe)

Proved


 


 


 

 


 

 


 

Developed Producing

30.6

37.6

-

197.8

7.7

108.9

121.4

Developed NonProducing

1.7

1.1

-

11.9

0.3

5.0

6.4

Undeveloped

3.0

5.8

79.3

74.4

3.3

103.8

98.9

Total Proved

35.3

44.5

79.3

284.2

11.3

217.8

226.7

Probable

16.1

19.3

129.0

136.3

6.9

194.0

194.7

Total Proved Plus Probable

51.4

63.8

208.3

420.5

18.3 

411.8

421.4

Notes:

  1. "Gross" reserves means the total working interest share of Harvest's remaining recoverable reserves before deductions of royalties payable to others.
  2. "Net" reserves means Harvest's gross reserves less all royalties payable to others.
  3. Coal bed methane of 1.5 Bcf proved and 2.2 Bcf proved plus probable have been included with natural gas. 

 

Harvest Net Present Values of Future Net Revenue as at December 31, 2012 –
Forecast Prices and Costs

 

Before Income Taxes - Discounted at %/Year ($millions)

Reserves Category

0%
 

5%
 

10%
 

15%
 

20%
 

NPV

10%/boe

 ($/boe)(1)

Proved


 


 


 


 


 

 

Developed Producing

3,764

2,918

2,396

2,043

1,789

21.99

Developed Non-Producing

204

116

80

60

47

15.86

Undeveloped

2,659

1,276

653

325

132

6.29

Total Proved

6,627

4,310

3,128

2,428

1,968

14.37

Probable

7,234

3,407

1,841

1,090

684

9.49

Total Proved Plus Probable

13,861

7,717

4,969

3,518

2,652

12.07

Note:

  1. Unit values are based upon net reserves volumes.

McDaniel & Associates Consultants Ltd. January 1, 2013 Price Forecast

The forecast costs and prices assume increases in wellhead selling prices and take into account inflation with respect to future operating and capital costs. Crude oil and natural gas benchmark reference pricing, inflation and exchange rates utilized in the Reserves Report, is based on the McDaniel January 1, 2013 price forecast. A complete listing of the forecast is available on McDaniel's website at: http://www.mcdan.com/pdf/20130101.pdf.

 

Harvest 2012 Reconciliation Table – Forecast Prices and Costs


 

TOTAL BARREL OF OIL EQUIVALENT (boe)

FACTORS

Gross Proved
(MMboe)

Gross Proved Plus Probable
(MMboe)

December 31, 2011(1)

265.2

505.7

Extensions/Improved Recovery

9.1

19.4

Technical Revisions

3.8


(4.3)

Discoveries              

 -

 - 

Acquisitions

 -

 -

Dispositions

(3.1)

(4.4)

Production(2)

(22.7)

(22.8)

December 31, 2012

252.3

493.8

  1. The closing balance from 2011 does not match the opening balance in 2012. In preparing the 2011 reserves tables, the actual production was different than that estimated by the Independent Qualified Reserves Evaluators', since their reports were preared before the 2011 actual production was available. An update for this variance was accounted for by adjusting the 2011 production.
  2. The stated 2012 production of 22.7 and 22.8 MMboe in this table does not line up with the actual recorded production of 21.7 MMboe for Harvest in 2012. This is for the same reason as discussed above - Independent Qualified Reserves Evaluators' reports were prepared before 2012 actual production was available and therefore their reports reflects estimates for 2012 production.