Sept 11 Oil and gas producer Harvest Natural
Resources Inc said it was in exclusive talks to sell
itself to Argentina's Pluspetrol in a deal valued at about $373
million including debt after struggling to fund its exploration
Shares of Harvest, which had a market value of $164 million
as of Tuesday close, jumped 40 percent in premarket trading.
Pluspetrol plans to retain Harvest's 32 percent interest in
Petrodelta SA, a joint venture between Harvest and Venezuela's
state-owned Petroleos de Venezuela SA, and spin off the
company's other assets to Harvest's shareholders.
Harvest's non-Venezuelan assets, which include interests in
Gabon, Indonesia, Colombia and China, would be managed by its
current management under a newly created company.
"While our exploration programs have yielded significant
success in Utah, Gabon and Indonesia, our uncompetitive cost of
capital has placed our future growth possibilities at a distinct
disadvantage," Chief Executive James Edmiston said in a
statement on Wednesday.
The company warned in March that there were doubts about its
ability to continue as a going concern.
As of June 30, Harvest had $9.8 million in cash and cash
equivalents and long-term debt of $76.1 million, according to
Thomson Reuters data.
"I think the deal value is great given the struggles the
company faced in the last year or so trying to move the asset,"
Wunderlich Securities analyst Jason Wangler said in an email.
The deal value was "incremental" given that it was about 1.5
times the current enterprise value of the company, he said.
A previous attempt by Harvest to sell its 32 percent stake
in Petrodelta to Indonesia's state oil company PT Pertamina
for $725 million was scuttled by the Indonesian
government in February.
The company said there was no guarantee that the
negotiations with Pluspetrol would result in a sale of the
company or any of its assets.
Harvest said any deal would be subject to approval by
The company, whose shares have dropped about 25 percent
since that deal fell through, has been looking to exit Venezuela
since 2007, when the country nationalized most of its
Harvest shares were trading at $5.74 before the bell after
closing at $4.15 on Tuesday.