Harvest has completed the previously announced sale of substantially all of its interests in the Barnett Shale for $63.5 million
Image: Harvest Oil & Gas completes divestitures of Barnett Shale and mid-continent assets. Photo: courtesy of drpepperscott230 from Pixabay.
Harvest Oil & Gas Corp. (OTCQX: HRST) (“Harvest” or the “Company”) today announced that it has completed the previously announced sales of Barnett Shale assets and certain Mid-Continent area assets located in the Anadarko Basin and SCOOP/STACK. In addition, the Company plans to enter into a new credit facility and is initiating a strategic review process.
Barnett Shale and Mid-Continent Area Divestitures
Harvest has completed the previously announced sale of substantially all of its interests in the Barnett Shale for $63.5 million, net of preliminary purchase price adjustments. The preliminary purchase price adjustments include a $6.4 million reduction in the purchase price paid at closing related to certain of the Company’s interests that are not included in the initial closing but that are expected to be included in a subsequent closing in 2019. The Company also completed the previously announced sale of certain oil and gas properties in the Mid-Continent area located in the Anadarko Basin and SCOOP/STACK for $5.4 million, net of preliminary purchase price adjustments. UBS Investment Bank acted as financial advisor and Kirkland & Ellis LLP acted as legal advisor to Harvest on these transactions.
Harvest is currently considering alternatives to return net proceeds from these asset sales to shareholders, which could include dividends, distributions or share repurchases.
Planned New Credit Facility
Harvest has signed a commitment letter with Regions Bank to put in place a new revolving credit facility (“Credit Facility”), subject to certain funding conditions, that will provide the Company with reduced borrowing costs and increased flexibility to return capital to shareholders through dividends, distributions or share repurchases. The new Credit Facility will allow the Company to repurchase shares, which is prohibited under the terms of the current credit facility. The new Credit Facility is expected to close in the third quarter of 2019.
Initiation of Strategic Review Process
Harvest is undertaking a review of strategic alternatives and has engaged Intrepid Partners, LLC to assist the Company in this process. This comprehensive review will include, but not be limited to, the potential divestiture of additional assets or all of the Company’s remaining assets as well as a potential sale or merger of the Company. Harvest will also be reviewing options to reduce its overall cost structure to more closely align with the pro forma asset base after the Barnett and Mid-Continent divestitures. Assisted by its legal and financial advisors, Harvest will consider all strategic alternatives, with the primary focus on maximizing shareholder value.
There can be no assurance that such evaluation will result in one or more transactions or other strategic change or outcome. The Company has not set a timetable for the conclusion of its evaluation of strategic alternatives, and it does not intend to comment further unless and until the Board has approved a specific course of action or the Company has otherwise determined that further disclosure is appropriate or required by law.
Source: Company Press Release