Shares of Harvest Natural Resources, Inc. (NYSE:HNR) Advance Following Announcement of Sale Of Venezuelan Interests

Independent energy company, Harvest Natural Resources, Inc. (NYSE:HNR), has announced the sale of all of its Venezuelan interests.

HOUSTON, Oct. 7, 2016 /PRNewswire/ — Harvest Natural Resources, Inc. (Harvest or the Company) (HNR) has sold all of its Venezuelan interests in a closing that became effective this morning.  The closing occurred in accordance with Harvest’s previously announced share purchase agreement dated June 29, 2016 among Harvest, its subsidiary HNR Energia B.V. and CT Energy Holding SRL.  Delta Petroleum N.V., as a permitted assignee, fulfilled CT Energy’s obligations under the share purchase agreement.  Harvest’s stockholders approved the transaction on September 15, 2016.

At the closing, Harvest received $80 million in cash, a $12 million six-month 11% note payable to Harvest by the purchaser, and cancellation of $30 million in debt owed by Harvest to CT Energy.  Harvest used part of this cash consideration to pay the remaining debt it owed to CT Energy and for other expenses and adjustments associated with the transaction.  Net cash proceeds received after paying the above closing adjustments and other expenses was $69.4 million.  Also at the closing, CT Energy relinquished its 8,667,597 shares of Harvest common stock, which will be held as treasury shares, and agreed to terminate the warrant, issued in June 2015, to purchase up to an additional 34,070,820 shares of Harvest common stock.  With the return of the shares held by CT Energy, Harvest now has 44,318,567 outstanding shares. 

After receiving payment of the purchaser’s note payable of $12.0 million less taxes, funding a reserve for potential change of control payments and working capital, the estimated cash remaining is expected to be $62 million.  Upon the potential exercise of vested options held by employees, the estimated outstanding shares of Harvest common stock is expected to be 48,693,768 shares.

As a result of the transaction, Harvest has ceased to have a presence in Venezuela, two of the directors appointed by CT Energy to Harvest’s board resigned, Harvest owes no debt to CT Energy, and the relationship between Harvest and CT Energy has terminated.

Going forward, Harvest’s primary tangible asset is its oil and gas interests in Gabon.  Harvest has received two proposals for the purchase of its Gabon interests and is in discussions with both potential buyers; however, there can be no assurances that these discussions or either proposal may lead to a definitive transaction.  Harvest is currently evaluating the possible sale of its Gabon interests, distributions of cash to its stockholders, and possible dissolution of the Company.

Concurrently with the closing of Harvest’s sale of its Venezuelan interests (through the sale of its 51% equity interest in Harvest-Vinccler Dutch Holding B.V.), Petroandina Resources Corporation N.V. sold its 29% equity interest in Harvest-Vinccler to the same purchaser.  As a result, the parties terminated the December 2013 shareholders’ agreement regarding their holdings in Harvest-Vinccler, Petroandina released Harvest from all claims in connection with the shareholders’ agreement, and Petroandina’s lawsuit against Harvest and HNR Energia is expected to be dismissed by the Delaware Court of Chancery next week, in accordance with Harvest’s settlement agreement with Petroandina.

About Harvest Natural Resources

Harvest Natural Resources, Inc., headquartered in Houston, Texas, is an independent energy company with exploration and exploitation assets in Gabon.  For more information visit Harvest’s website at 


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Harvest Natural Resources Inc (NYSE:HNR) shares are trading +7.06% on the news and in the range of $0.87 – 1.05 during the current trading session.  When taking a look at which direction the stock might be headed, investors often look to brokerage analysts who cover the stock.  Sell-side research firms on Wall Street currently have a consensus one-year price target of $2.00 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.

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Sell-side analysts are projecting earnings per share of $0.00 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $-0.17 per share according to First Call.

In looking at where the stock is trading on a technical level, the stock is trading +26.79% away from its 50 day moving average of $0.72.  Based on the most recent available data, the equity is -39.74% off of its 52-week high of $1.51 and +203.33% away from its 52-week low which is $0.30.

Today, the stock opened at $1.02 and the last bid at the time of writing stood at $0.91.  During the session thus far, the equity dipped down to $0.87 and touched $1.05 as the high point.  Harvest Natural Resources, Inc. (NYSE:HNR) has a market cap of $46.77M and has seen an average daily volume of 458163 over the past three months.

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Disclaimer: Nothing contained in this publication is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.


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