IPAA 2004 OIL & GAS INVESTMENT SYMPOSIUM

April 19-21, 2004NYSE: HNRwww.harvestnr.com

Certain statements in this presentation are forward-looking and are based upon the Company’s current belief as to the outcome and timing of future events. All statements other than statements of historical facts included in the presentation regarding budgeted capital expenditures, increases in oil and gas production, the Company’s outlook on oil and gas prices, oil and gas reserves estimate, business strategy and other plans, estimates, projections, and objectives for future operations, are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include the timing and extend of changes in commodity prices for oil and gas, operating risks and other risk factors as described in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company’s actual results and plans could differ materially from those expressed in the forward-looking statements.

3

Share Price Performance

35 million shares outstanding

Significantly outperformed market

How was this achieved? How will we continue to grow value in the future?

0%

100%

200%

300%

400%

500%

600%

700%

800%

Au

g-00

Oct

-00

De

c-00

Fe

b-01

Ap

r-0

1

Jun-

01

Au

g-01

Oct

-01

De

c-01

Fe

b-02

Ap

r-0

2Ju

n-0

2

Au

g-02

Oct

-02

De

c-02

Fe

b-03

Ap

r-0

3

Jun-

03

Au

g-03

Oct

-03

De

c-03

Fe

b-04

HNR

S&P 500

4

Key Events

Aug - Dec 2000 New CEO, Board and Executive appointed

Create strategy, set key deliverables February 2002 Announce Arctic Gas sale for $220 million September 2002 Announce Venezuelan Gas contract for 198 Bcf December 2002 Venezuela national civil work stoppage February 2003 Restart Venezuelan oil production September 2003 Announce Geoilbent sale for $75 million October 2003 Temblador and El Salto Evaluation December 2003 Announce Venezuelan Gas sales of 70 MMcfpd January 2004 Announce 2004 guidance

5

Achievements

Strengthened the balance sheet

Reduced the cost structure

Delivered Venezuelan gas sales

• Diversified our revenue stream

$138 million cash to fund future value growth

Stabilized the CompanyDid what we said we would do

6

Characteristics

Oil and gas production in Venezuela Focused on development Low below-the-ground risk Substantial oil and gas production upside Low cost producer Growth opportunities in Russia and Venezuela Strong balance sheet

Small, financially stable, international niche player

positioned for value growth

7

To identify, access, integrate and exploit large known resources of hydrocarbons

Three guiding principles:• Enable• Risk manage

• Value harvest

Two stages to value growth• Venezuela is the “cash cow” for next 5 years

• Develop significant new opportunities

– Venezuela

– Russia

Strategy

8

Venezuela

Most oil reserves in the Western Hemisphere

4th largest oil exporter to U.S.

Faja is one of world’s largest oil fields at 270 BBO

Proved oil reserves of 78 BBO

Oil provides 75% of government export revenue

Proved natural gas reserves of 148 TCF

State Oil Company PDVSA owns CITGO

9

Venezuela - Political Situation

Key events: National civil work stoppage December to February, 2003

Referendum petition

PDVSA organization changed

Rebuilding production

Outcomes: Political and economic uncertainty remains

Referendum?

Seeking new foreign investment

Streamlined decision making in PDVSA/Ministry of Mines

10

Orinoco – South Monagas UnitOrinoco – South Monagas Unit

11

South Monagas Assets

3 Fields

158,000 Acres

20-Year Operating Service Agreement – 1992

Equity Structure HNR 80%

Vinccler 20%

Ryder Scott Reserves (80%)

• Oil – 70 MMbbl

• Natural gas – 156 Bcf

Pre-tax SEC PV 10 value at 12/31/03 is $545 million net to HNR

El Salto

Temblador

12

South Monagas Unit

13

Natural Gas Contract

Deliver up to 198 Bcf through July 2012• $1.03 per Mcf

• Added 26 MMBoe net to Harvest

• First sales on November 25, 2003

Adds $12 to $16 million cash flow in 2004

Drilling and infrastructure costs of $51 million

• $27 MM in 2003

Incremental oil production

14

Uracoa Producing Formation

Before natural gas sales to PDVSA• Drill horizontal wells in

middle of the oil column• Water drive from bottom• Avoid gas to extent

possible

After natural gas sales to PDVSA

• Drill horizontal wells just below the gas cap

• Produce oil between gas cap and middle of oil column

• 4.5 MMBo priced at $7.00

15

$15 $20 $25 $31.21

$35

$2.50 193 299 406 560 626

$2.80 179 284 391 545 612

$3.00 160 266 373 527 593

$3.50 127 233 340 494 560

$4.00 94 200 307 460 527

Operating cost per barrel

WTI Pricingper barrel

South Monagas Pre-tax SEC PV10 Sensitivity at December 31, 2003

($ MM net to HNR’s 80% interest)Assumes 2003 yearend proved reserves of 96 MMBOE

16

South Monagas Playground

World class hydrocarbon province(8 BBO proven in 168 fields)

Low cost producer

Isleno Fields potential

Exclusive agreement to build field development plan for Temblador and El Salto Fields

Facilities still have capacity post gas contract

Harvest has experience and skills to grow in this region

17

ISLENO FIELD

Submitted offer letter to tie field into SMU Requires SMU physical processing infrastructure

$10M work commitment Drill 3 wells Seismic Infrastructure

“Working with PDVSA to progress to agreement”

Growth in East Venezuela

18

TEMBLADOR AND EL SALTO FIELDS

Signed MOU on October 17th 2003 with PDVSA

• 6 month exclusive period of evaluation and negotiation

Large, under-developed fields, next to SMU

• Temblador – discovered in 1930’s, produced 115MMBo & 60Bcf

– partially closed down in 2002

• El Salto – discovered in 1980’s, never developed

Plan to develop fields under new Organic Hydrocarbon Law

Fields are similar to SMU

“Growth by doing what we know best”

Growth in Eastern Venezuela

19

European Exports from Russia

20

Russia

Energy is 40% of Russia’s exports

Proved oil reserves of 49 BBO

Produces 9.0 million Bopd

Exports 5.5 million Bopd, world’s second largest

Holds nearly one-third of world’s natural gas reserves

Over 1,700 Tcf of proved gas reserves

World’s largest natural gas exporter, 6.7 Tcf annually

21

Russian Acquisition Characteristics

Low risk development

Operating and financial control

Significant reserve, production and cash flow potential

Oil with expanded access to export markets

Natural gas and condensates near infrastructure

Financing capability

Partners

“WE WILL ACQUIRE AND DEVELOP QUALITY RUSSIAN ASSETS”

22

Growth Opportunities in Russia

Partner of choice• 10 years experience

• $300 million returned to shareholders from asset sales

• HNR is not a threat

• Local respect… enquiries to repeat model

Opportunities are available

• Large, underdeveloped fields

Cash and financing capacity

Clear objectives, learned lessons

23

Corporate Financial Overview

Guidance

2001 2002 2003 2004

Average price ($/Bbl) . . . . . . 12.52 13.08 14.07 ±12.00

Average price ($/Boe) . . . . . . ± 10.00

Production (MMBOE) . . . . . . 9.8 9.7 7.8 12-14

Lifting costs ($/Boe) . . . . . . . 4.37 3.50 3.97 2.50-2.75

Cash operating costs . . . . . . 6.97 5.62 6.56 4.25-4.75

Net income ($MM) . . . . . . . . . 43 100 27 15-20

Net cash provided by Operating Activities . . . . . . . . 37 43 39 65-75

Capital Expenditures . . . . . . . 43 43 61 30-35

24

typicalHNR

Exploration risk □ □

Reinvestment risk □ □

Balance sheet risk □ □

Net income risk □ □

Political / Country risk □ □

Enterprise Risk

25

Harvest Valuation

Proved reserves net to HNR 96 MMBoe

Reserves to production ratio 9 years

Pre-tax SEC PV10 net to HNR $545 million

Shares outstanding 36 million

Barrels equivalent per share 2.7

Cash balance $138 million

Long-term debt at Dec. 31, 2003 $ 97 million

26

HARVEST AIMS

Transform company

• Grow reserves significantly… 5X is the goal

Use $138 million for seed-corn investments

• Apply project finance when appropriate

• Prudent, paced development

Manage balance sheet

27

How we will grow in the future

50% to 75% production growth in 2004

Operating expense per Boe down 30% to 35%

50% to 70% cash flow increase in 2004

Grow through acquisition

Committed Management and Board – Delivered on Promises Made

WE HAVE AN EXCITING FUTURE

0%

100%

200%

300%

400%

500%

600%

700%

800%

Aug

-00

Oct

-00

Dec

-00

Feb

-01

Apr

-01

Jun-

01

Aug

-01

Oct

-01

Dec

-01

Feb

-02

Apr

-02

Jun-

02

Aug

-02

Oct

-02

Dec

-02

Feb

-03

Apr

-03

Jun-

03

Aug

-03

Oct

-03

Dec

-03

Feb

-04

HNR

S&P 500