Wednesday, September 11, 2013

Harvest Natural To Sell Company - Spin Off Assets To Shareholders

HOUSTONSept. 11, 2013 /PRNewswire/ -- Harvest Natural Resources, Inc. (NYSE: HNR) today announced it has entered into exclusive negotiations with Pluspetrol Venezuela S.A., an entity belonging to one of the leading exploration and production companies in Latin America, to sell the outstanding shares of Harvest.  Under the proposed transaction, at closing Pluspetrol would retain Harvest's 32% interest in Petrodelta S.A., while Harvest's non-Venezuelan assets would be contributed to a new company (SpinCo) that would be spun off to Harvest's shareholders.  SpinCo will be managed by Harvest's current management team. 
The total consideration for the proposed transaction with Pluspetrol is approximately $373 million.  This consideration for the proposed transaction includes the assumption of the Company's long-term debt and certain other obligations of the Company.  The proposed transaction would be subject to customary working capital adjustments upon closing. 
The remaining assets to be spun-off will include Harvest's interest in GabonIndonesiaColombia, and China, as Harvest continues its current process to maximize the value of these assets for its shareholders. 
Harvest has agreed to negotiate exclusively with Pluspetrol for a specified period to reach a definitive merger agreement.  There can be no assurance that these negotiations will result in the proposed transaction or any other transaction for the sale of Harvest or any of its assets. 
The closing of the proposed transaction would be subject to, among other things, approval by the Government of the Bolivarian Republic of Venezuela and the shareholders of Harvest, as well as any applicable consents necessary to effect the proposed transaction and the spin-off of any remaining assets.
While negotiations of the proposed transaction with Pluspetrol move forward, Harvest will continue to explore interim capital raising opportunities to obtain sufficient financing to fund its current projects and other corporate expenses.
James A. 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 UtahGabon and Indonesia, our uncompetitive cost of capital has placed our future growth possibilities at a distinct disadvantage.  This proposed sale and spin-off affords the Company and its shareholders the ability to reap the benefits of our exceptional portfolio in the near term."

IEA Economist Fatih Birol On The Current Oil Market

There Is Very Little Spare Capacity In The Oil Market Today

Friday, September 6, 2013

Viking Producers Wary Of New Chinese Rival

“Over the back half of 2014 and into 2015, I think you’re going to see one or two dominant large players consolidate up the majority of this play,” said Neil Roszell, president and chief executive of Calgary junior Raging River Exploration Inc., one of the top five explorers in the Dodsland Viking.

Thursday, September 5, 2013

Novus Energy Sale - Why Are Assets Being Let Go For 35% Less Than Recent Transactions?

A few facts on this Novus Energy sale to Yanchang:

1) Novus was my largest position by a considerable margin

2) My gain on my average cost base is 50%

3) Despite that gain I feel a little like I'm chewing on a lemon

I knew the sale price was considerably below market value for those assets.  I had no idea why.

Then I read an article in the Calgary Herald that may shed some light on things.  I've put together some thoughts here:

The article first explains that the sale is 35% below the average of the last 7 Viking transactions.  Then it jumps to comments from the Novus CEO who is bragging about how the new company that he will be working for is going to become a "major player" making big time acquisitions.

So shareholders like me get to sell out at a discount price to the very large company that will now be employing the Novus CEO and Chairman.  He gets to run a much bigger operation and get a fat pay cheque.  The rest of us just get a disappointing price.

Maybe another bidder will step up and pay something close to a fair price.

Tuesday, September 3, 2013

Novus Energy Officially Sold - Sale Price $1.18 Per Share

A nice gain, but certainly very disappointing after the Asian news report.

TriOil Strategic Process Extended

CALGARY , Sept. 3, 2013 /CNW/ - (TOL.VTriOil Resources Ltd. ("TriOil" or the "Company") announces that it has extended the period of exclusive negotiations between itself and another party in relation to its strategic alternatives process.  The exclusive negotiation period has been extended from the end of August to the second half of September 2013 by mutual agreement of the parties. At the present time, there can be no assurances or guarantees that these negotiations will result in an acceptable transaction. Further updates in respect of the Company's strategic alternative process will be made in due course.