Harvest to issue stock in exchange for 8.25% convertibles; holders forgo make-whole premium

By Susanna Moon

Chicago, Aug. 20 - Harvest Natural Resources, Inc. said it agreed to issue stock in exchange for $4,651,000 principal amount of its 8.25% senior convertible notes.

The company entered into exchange agreements with some noteholders to exchange the notes for 829,951 shares, which amounts to an exchange price of $5.60, according to a press release.

The conversion price was $5.71 for the notes issued on Feb. 17, 2010.

In addition, in lieu of cash, the company agreed to issue 41,215 shares at $9.31 per share in exchange for forgoing a one-year interest make-whole of $383,707.50.

The company's stock (NYSE: HNR) closed at $9.31 on Aug. 17.

After settlement on Aug. 23, about $10.9 million principal amount of the notes will remain outstanding.

Harvest said it is also considering offering, subject to market conditions, up to $75 million of new senior notes in the near future, but it cannot assure the deal will go through.

Proceeds would be used to fund Harvest's drilling program in Gabon and for general corporate purposes.

Harvest is a Houston independent oil and gas exploration and development company.

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