Harvest Natural In Talks With Pluspetrol Venezuela For Proposed Sale

(RTTNews) - Harvest Natural Resources Inc. (HNR) Wednesday announced that it has entered into exclusive negotiations with Pluspetrol Venezuela S.A., an entity belonging to an exploration and production company,to sell its outstanding shares. The total consideration for the proposed transaction with Pluspetrol is approximately $373 million.

Under the closing of the proposed deal, Pluspetrol would retain Harvest's 32 percent interest in Petrodelta S.A., while Harvest's non-Venezuelan assets would be contributed to a new company that would be spun off to Harvest's shareholders. The new company, SpinCo, will be managed by Harvest's current management team.

The company said the remaining assets to be spun-off will include its interest in Gabon, Indonesia, Colombia, and China. The company noted that the consideration for the proposed deal includes the assumption of its long-term debt and certain other obligations.

The closing of the transaction would be subject to, among other things, approval by the Government of the Bolivarian Republic of Venezuela and the shareholders of Harvest.

The company added that along with the negotiations, it will continue to explore interim capital raising opportunities to obtain sufficient financing to fund its current projects and other corporate expenses.

James Edmiston, President and CEO of Harvest, said, "In spite of the consistent, profitable growth of Petrodelta, Harvest has not received the corresponding dividends from free cash flow required to fund our diversification strategy. So, 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."