Harvest Natural Resources, Inc. HNR (Harvest or the Company) today announced that the Share Purchase
Agreement (SPA) between Petroandina Resources Corporation N.V. (Petroandina),
Pluspetrol Resources Corporation B.V. (Pluspetrol), Harvest and HNR Energia
B.V., a wholly-owned subsidiary of Harvest, for the purchase of Harvest's
remaining interests in Venezuela for a purchase price of $275.0 million in
cash has been terminated as a result of the failure to obtain approval of the
transaction from the Government of the Bolivarian Republic of Venezuela by
December 31, 2014.
Representatives of the Venezuelan Government and Corporacion Venezolana del
Petroleo S.A. (CVP), a PDVSA affiliate who along with another PDVSA affiliate
owns a 60% interest in Petrodelta, informed Harvest and Petroandina that any
approval of the contemplated transaction would be conditioned on Petroandina
guaranteeing (i) an unspecified bonus payment for access to Petrodelta's
reserves and (ii) $1.52 billion of financing for Petrodelta. Neither of these
conditions exists as contractual obligations related to ownership in
Petrodelta and ultimately Petroandina and the Venezuelan Government could not
reach an agreement on those matters.
Harvest and Petroandina signed the SPA on December 16, 2013, and closing of
the transaction had been subject to, among other things, approval by the
Company's stockholders and the Government of the Bolivarian Republic of
Venezuela. On May 7, 2014, the Company's stockholders approved the sale of
the Company's remaining interests in Venezuela to Petroandina.
As a result of the termination of the SPA, Harvest will retain its 20.4%
interest in Petrodelta and Petroandina will retain its 11.6% interest in
Petrodelta, which it had purchased from Harvest for $125 million in cash on
December 16, 2013.
James A. Edmiston, President and CEO of Harvest, said: "After three years of
our best efforts, we are both disappointed and frustrated that the sale of our
interests in Petrodelta has once again been effectively denied by the
Government of Venezuela and CVP. As a result of this development, in the near
term, Harvest will focus on strengthening its balance sheet and exploring
alternatives with regard to our interests in Petrodelta and Gabon. These
actions may include efforts to monetize our Dussafu asset."
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