Asset A&D

Harvest Oil & Gas Divests Appalachian Assets

By Kunal Raj
July 09, 2020
a minute read
Grey Pipe on Green Grass

OTCQX-listed Harvest Oil & Gas Corp. has agreed to sell substantially all of its Appalachian assets to an unaffiliated third party for US$20.5 million, subject to customary purchase price adjustments. The buyer of the assets has not been named.

The total consideration includes US$14.5 million of cash and an additional consideration of US$6 million payable through a note. The holders of a majority of the common stock of the company have approved the transaction.

In 2018, the company emerged as the successor to EV Energy Partners LP as part of a pre-packaged Chapter 11 plan, and has been engaged in operations in the Appalachian basin. During 2019, Harvest divested its assets in the San Juan basin for approximately US$43 million, followed by the sale of its Barnett Shale assets in North Texas for US$72 million.

The company holds 713,401 net acres in the Appalachian basin located across Ohio, Pennsylvania, New York, West Virginia, and Virginia, of which more than 90% is operated. As of December 31st, 2019, the company held interests in 9,787 gross wells and had reported Proved (1P) reserves of 99.6 billion cubic feet equivalent (Bcfe), 63% of which is gas. Average daily production stood at 29.3 million cubic feet equivalent per day (MMcfe/d) during 2019.

“The company intends to evaluate the process of winding-up and of returning capital to its shareholders in the event this sale and other contemplated asset divestitures are completed. This evaluation will be dependent upon an analysis of the net cash available for distribution to its stockholders and the amount of net cash that must be retained to satisfy the company’s ongoing liabilities during the winding-up process,” the company said in a statement.

The completion of the transaction remains subject to customary closing conditions, and is expected in August.

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