Why Harvest Natural's Shares Jumped Temporarily

Is this meaningful or just another movement?

Travis Hoium
Travis Hoium
Feb 13, 2013 at 4:45PM
Energy, Materials, and Utilities

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.

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