As expected, thankfully, Harvest Natural Resources (HNR, NYSE) announced this morning that it has sold all of its Venezuelan Oil interests.
Time to lock in profits!
As I outlined for BMR subscribers September 1 (“Sell the News“), the buyer, billionaire Oswaldo Cisneros, made all the difference in this deal.
Here’s an excerpt from the news release:
“At the closing, Harvest received $80 million in cash, a $12 million 6-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.
“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.”
HNR has traded as high as $1.04 this morning. Its cash position represents $1.27 per share.
Meanwhile, another one of our top Oil picks, Africa Energy (AOI, TSX), has enjoyed a great week with Crude prices pushing slightly above $50 a barrel. As of 7:20 am Pacific, AOI is up 8 cents at $2.31 in its 8th consecutive “up” day. John will have an updated chart on AOI in today’s Morning Musings.
About the writer: Daniel T. Cook, the newest member of the BMR team, is from the great state of Texas. Daniel has a strong passion for the junior resource sector and has followed the Venture and broader markets with great interest since he bought his first stock 18 years ago at the age of 12. He’s also a licensed investment professional who was a Bright Future’s Scholar at the University of Central Florida, graduating in 2010 with a major in Finance. We know our readers will enjoy his material and benefit from his wisdom and insight. We welcome him aboard!
