Harvest Natural Resources Inc (HNR:US). climbed the most since January after Venezuela’s oil minister Rafael Ramirez said that the South American country was still analyzing a proposed asset sale.
Harvest Natural rose 3 percent to $9.33 at the close in New York, the biggest increase since Jan. 4. The company agreed last year to sell its 32 percent stake in Petrodelta SA, a joint venture with state-owned Petroleos de Venezuela SA, to Indonesia’s Pertamina Persero PT for $725 million.
The sale has been delayed as Harvest included reserves that belong to the Venezuelan state in the proposal to the government, Ramirez told reporters today in Caracas. Both the buyer and seller know what they need to do in order to obtain government approval, he said.
“I spoke with both of them,” Ramirez said. “The issue is that there were reserve barrels included in the negotiation that shouldn’t be there. They would need to pay a bonus to the Venezuelan state if they include any barrels not already approved by the National Assembly.”
Harvest shares gained as much as 10.8 percent in intraday trading after Ramirez’s comments. Stephen Haynes, the company’s Chief Financial Officer, did not immediately return a telephone message left today seeking comment on Ramirez’s statements.
“We’re satisfied with the negotiations. We like the company that wants to buy this stake,” Ramirez said. “We’ll approve the sale once this is resolved. We have all the patience in the world.”
The deal needs approval from shareholders as well as the Venezuelan and Indonesian governments, Harvest said in June, adding that net proceeds from the sale are estimated to be about $525 million after “deductions for transaction related costs and taxes.”
Harvest Chief Executive Officer James Edmiston said in January that Venezuelan President Hugo Chavez’s battle with cancer won’t hurt its chances of getting approval for the deal.
Chavez, 58, hasn’t been seen or heard in public since he arrived in Cuba for a fourth cancer surgery on Dec. 11.
“We do not have any deadline for closing the deal because we need to consider the political situation there,” Muhamad Husen, Pertamina’s upstream director, said on Feb. 6 after a meeting with Indonesia’s parliament in Jakarta.
Pertamina still needs to agree to final terms with Harvest before requesting approval from the Indonesian government, Husen said.
Petrodelta’s six fields hold gross proved reserves of 221 million barrels of proved, probable and possible oil and gas reserves, according to Harvest Natural’s website.
Eulogio Del Pino, vice president of exploration and production at state oil company Petroleos de Venezuela SA, said last year that the deal looks “positive” because of Pertamina’s investment capabilities.
“I think these comments from Ramirez today are a clear positive for Harvest as it shows that Venezuela is supportive of the deal and we seem to be getting closer to Venezuelan approval,” Patrick Goff, a senior analyst at First Capital Alliance LLC in Chicago, said today in an e-mailed response to questions.
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