The independent oil and gas exploration and production outfit announced that the share purchase agreement between PT Pertamina (Persero) and its subsidiary HNR Energia B.V. for the purchase of Harvest’s interests in Venezuela for $725 million has been terminated. Harvest’s press release said that the deal’s termination is “as a result of the Government of Indonesia, in its capacity as sole shareholder of PT Pertamina (Persero), voting not to approve the transaction.” The share purchase agreement was announced back on June 21, 2012, and it also had been subject to approval of the government of the Bolivarian Republic of Venezuela and a majority of Harvest’s stockholders.
The company tried to briefly smooth this over, but that is not going to help buried shareholders this Wednesday. Harvest’s CEO James Edmiston said, “While we are disappointed that the sale of our interests in Petrodelta to Pertamina was not approved by the Government of Indonesia, Harvest remains committed to exploring all possible alternatives to unlock the potential of our assets and to maximize value for our shareholders.”
Harvest is going to have to try to really unlock value for holders now. Shares were at $9.16, and now they are down 40% at $5.49. Its 52-week range is $4.85 to $10.83, and the pre-implosion market cap was only $361 million. It is important to keep in mind that Houston-based Harvest is a pre-revenue company.
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