Independent oil & gas company Harvest Natural Resources Inc. (NYSE: HNR) today announced the sale of its Venezuelan assets to Pertamina, the national oil company of Indonesia, for $725 million in cash. The company expects to realize $525 million after transaction costs and taxes.
Harvest’s stake in Petrodelta, the company’s jointly owned Venezuelan operation, totals 32% and included 43.3 million barrels of oil equivalent of proved reserves and 60.5 million barrels of oil equivalent of probable reserves. The company also owns exploration leases in Indonesia, Gabon, Oman, and China.
The company’s CEO said:
The signing of the SPA represents a significant step forward in the strategic alternatives initiative we began in 2010 and clearly validates the potential of Petrodelta’s business and Harvest’s twenty year partnership with PDVSA in Venezuela.
This transaction will not only provide Harvest and its shareholders with numerous options for the future, but will also provide Petrodelta and PDVSA with a strong, well-financed international partner capable of contributing to Petrodelta’s future growth.
None of Harvest’s leases produces anything yet. The company drilled a dry hole in Indonesia and has exploration plans for other wells.
But no production. The $525 million will definitely help the company expand its exploration, but revenue is likely to be a long ways off.
That hasn’t slowed down investors though. Shares are up 83% this morning, at $9.00, in a 52-week range of $4.85-$14.21.
Paul Ausick
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