Little Bear is a Big Bull on Venezuela

Zachary Prensky, Managing Director of Little Bear Research, has been a big believer in Venezuela, despite a political climate that has scared most investors away. Specifically, Prensky has been buying up shares in Harvest Natural Resources HNR, Little Bear's biggest holding, since he heard the company was going to sell its Venezuelan assets. That investment involved putting in a lot of man hours on the ground, investigating every aspect of the deal. This type of deal is "not for someone who puts in only a little time", said Prensky. Little Bear's investment approach is to focus on binary events to find foreign-based energy companies which trade on US exchanges. Presnky says some of these companies have assets worth much more than their share price. On Thursday, Harvest announced that its wholly-owned subsidiary, HNR Energia B.V., signed a definitive Share Purchase Agreement with PT Pertamina, the national oil company of Indonesia, to sell all of the company's interests in Venezuela for $725 million in an all-cash transaction. Despite the 100% move in Harvest's share price on Thursday, Little Bear sold only 10% of its holding. Prensky feels the share price could move as high as $13 to $15 prior to the closing of the deal. Prensky said the Harvest deal is enormous and "will change the way people will look at Venezuela going forward".