Harvest Natural Resources Announces Agreement to Exchange Common Stock for Outstanding 8.25% Senior Convertible Notes

Harvest Natural Resources, Inc.

announced today that it has entered into an exchange agreement with a certain existing holder of its 8.25% senior convertible notes pursuant to which such noteholder agreed to exchange $1,900,000 principal amount of the notes for 339,047 shares of common stock, resulting in an effective exchange price of $5.60.  The conversion price of the notes issued on February 17, 2010 was $5.71.  In addition, in lieu of cash, HNR agreed to issue to the noteholder 17,955 shares of common stock at $8.73 per share in exchange for foregoing a one year interest make-whole of $156,750.  After giving effect to the exchange, approximately $9,000,000 principal amount of the notes remain outstanding.  The exchange is expected to close on August 27, 2012. The material terms of the exchange agreements are described in more detail in the Company's Current Report on Form 8-K, to be filed today with the Securities and Exchange Commission. The common stock will be issued under Regulation D of the Securities Act of 1933, as amended. The common stock to be issued has not been registered under the Securities Act of 1933, as amended, or state