Why Harvest Natural's Shares Jumped Temporarily

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Harvest Natural Resources (NYSE: HNR  ) jumped 10% briefly today on news that an asset sale is likely to go through. The pop didn't last long, but shares did end the day up 3%.

So what: The oil minister of Venezuela said the country will approve a $725 million sale of assets to Pertamina Persero PT once some reserve issues are resolved. Venezuela says it owns some of the assets included in the sale and would need to be compensated for these reserves.  

Now what: This brings the deal one step closer to reality, a big positive for Harvest Natural. The company could certainly use the boost to a balance sheet that's slowly running out of cash. If approvals aren't reached by March 22, the deal could still fall through, but it looks very likely today. I think this will move shares higher long term, but it clearly wasn't the big bump some investors thought it was today.

Interested in more info on Harvest Natural Resources? Add it to your watchlist by clicking here.


Read/Post Comments (5) | Recommend This Article (3)

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  • Report this Comment On February 13, 2013, at 5:08 PM, EllenBrandtPhD wrote:

    *** Deal dates were extended to May, so March comment out of date.

    *** Fact that neither HNR nor Pertamina will comment now - after several months of Pertamina making positive comments every few days - demonstrates this is a true blackout period with heavy negotiations.

    *** Most believe that Petrodelta deal is now at the top of the queue for international deals at Pertamina, especially after the horrendous attack in Algeria, which makes that deal slower.

    *** On the "clue" trail, note that Institutional Buys in the stock, versus Institutional Sells, are now at a scorching hot 2-to-1 pace, i.e. two shares bought for every share sold, over the past 4-6 weeks.

    *** Just Friday night, Blackrock announced it now owns about 6 percent of HNR, almost doubling its previous share. Blackrock does not make this kind of investment casually.

    *** Stock was printed at 14.50 - or where most believe it will trade when the two country approvals are in - all day Saturday, as a humongous Uber-hint.

    More in next post.

  • Report this Comment On February 13, 2013, at 5:13 PM, EllenBrandtPhD wrote:

    *** Deal dates were extended to May, so March comment out of date.

    *** Fact that neither HNR nor Pertamina will comment now - after several months of Pertamina making positive comments every few days - demonstrates this is a true blackout period with heavy negotiations.

    *** Most believe that Petrodelta deal is now at the top of the queue for international deals at Pertamina, especially after the horrendous attack in Algeria, which makes that deal slower.

    *** On the "clue" trail, note that Institutional Buys in the stock, versus Institutional Sells, are now at a scorching hot 2-to-1 pace, i.e. two shares bought for every share sold, over the past 4-6 weeks.

    *** Just Friday night, Blackrock announced it now owns about 6 percent of HNR, almost doubling its previous share. Blackrock does not make this kind of investment casually.

    *** Stock was printed at 14.50 - or where most believe it will trade when the two country approvals are in - all day Saturday, as a humongous Uber-hint.

    More in next post.

  • Report this Comment On February 13, 2013, at 5:15 PM, EllenBrandtPhD wrote:

    Sorry for repeat. First one did not post! Then they both did.

  • Report this Comment On February 13, 2013, at 5:25 PM, EllenBrandtPhD wrote:

    As another interesting possible "Signaler," here is a link to a letter I wrote to the Jakarta Post, Indonesia's premier business media outlet:

    http://www.thejakartapost.com/news/2013/01/25/your-letters-p...

    This was edited by the publication, and they inserted a grammatical mistake not mine!, plus I am from New York, not Jakarta.

    But the very fact that this letter was made their featured letter of the week and now has made it to the top or near-top on all Search engine searches for Harvest, Petrodelta, Pertamina, Venezuela Oil, and even Gabon is pretty astonishing.

    That NEVER happens - and it happened in mere hours after the letter was posted - showing that Somebody or Other, possibly Pertamina itself, wants the contents of this letter - and this possible scenario for Harvest and Pertamina - getting into worldwide investor consciousness.

    So let us see what we will see.

  • Report this Comment On February 17, 2013, at 2:13 PM, EllenBrandtPhD wrote:

    Once again, the Shorter Distorters at Yahoo and elsewhere are NOT THINKING!

    Pertamina's feeling out the acceptable valuation for Maurel and Prom is very Bullish for HNR, because it may well mean they - and others? - are considering taking out ALL of HNR now.

    As my letter to the Jakarta Post said, with Gabon the hottest of hot spots in African Oil, Pertamina - and MANY others? - have to be thinking about assembling Grand Drilling Coalitions there. So think HNR and Vaalco and Maurel and Prom and various others, including local companies which need to be included.

    Note also that Pertamina has become further involved in exploration of the South China Sea and that HNR's big prospective block there, abutting Talisman's, is STILL valued on HNR's balance sheet at close to zero.

    From a trading perspective, note that miraculously, as some of us pointed out while it was happening, HNR's Institutional Holdings have now officially jumped from the 75 percent range to the 85 percent range - and still, one believes, growing.

    Don't we wish some of the other stocks in our portfolios were experiencing that kind of Institutional support? (Yes, we all do.)

    Among other things to think about: Several big African Oil conferences dead ahead, with a major one IN Gabon at the end of March.

    And official word today that while Oil exports from Saudi Arabia and Iraq are down the past several weeks, Venezuela's are WAY up. While the neverending criticism from the UK and US continues, a new Venezuelan Oil Boom is just beginning.

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