Also as discussed further in Note 16 – Subsequent Events, subsequent to September 30, 2013, we obtained $3.9 million in additional capital through sales of our common stock.
Call at 10am Central Time.
I don't think my headline is correct.
The management and board are listed as related persons in filing but they aren't listed as the purchasers.
SEC Form D filed
"but Reg D just means the offering wasn't sold to the public. It was a private placement and has nothing to do with the resale of the security."
Actually, securities offered under Reg D are subject to restrictions on resale by the purchasers.
On September 30, 2013, Harvest Natural Resources, Inc. (“we” or “our”) entered into a subscription agreement under which we agreed to sell to three purchasers an aggregate of 390,000 shares of our common stock for an aggregate purchase price of $2,000,700. The transaction closed on October 1, 2013.
On October 2, 2013, we entered into subscription agreements under which we agreed to sell to three purchasers an aggregate of 400,000 shares of our common stock for an aggregate purchase price of $1,928,000. The transaction closed on October 4, 2013.
The subscription agreements included representations, warranties, and covenants customary for transactions of this type.
In each transaction, the common stock was offered to accredited investors and we relied on an exemption from registration of the sale of the shares provided by Regulation D and Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), as a transaction by an issuer not involving any public offering. None of such common stock has been registered under the Securities Act, or under state securities laws and, unless so registered, may not be offered or sold in the United States or to U.S. persons except pursuant to an exemption from, or in a transaction not subject to the registration requirements of, the Securities Act and applicable state securities laws. This current report does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Funny you should mention that seemingly fanciful trading
As it so happens, I was long today from the close last night EDG, RVLT and CRRS. Oh, also, I was short #$%$. For emphasis.
I used the numbers per the Form 4s. Missed the disclosure in the Q which includes grants to employees who don't have to file Form 4. Thanks.
Therefore, the grand total is 8,369,834 warrants, options and SARs with a weighted average exercise price of $9.33.
What is the fair market value of these items? With a 70% vol and a current stock price of $5.50:
The 1.134 million $4.80 options and SARs could be worth up to $2.67 each ($3.0 million in total).
The 2.407 million warrants could be worth up to $0.96 each ($2.3 million in total).
The remaining 4.8 million options and SARs (with an average strike of $8.73) could be worth up to $1.45 each (7.0 million in total).
So the fair market value of all outstanding warrants, options and SARs is approximately $12.3 million. All subject the assumptions used to calculate fair market value which undoubtedly will be selected to be favorable to management.
As of August 5, 2013, HNR had outstanding 39,520,611 shares of common stock.
As of year-end 2012, 4,828,834 options and SARs were outstanding with a weighted average exercise price of $8.73.
Also at year-end 2012, 2,407,000 warrants were outstanding with an weighted average exercise price of $12.68.
In July 2013, HNR granted additional shares of restricted stock, options and SARs to board members and management.
Specifically, HNR granted 153,000 shares of restricted stock, and 800,000 options and 99,000 SARs. The options and SARs had a strike price of $4.80.
So, in total, HNR now has outstanding 5,727,834 options and SARs with a weighted average exercise price of $8.11.
And if you want to blend in the warrants, the grand total is 8,134,834 options, warrants and SARs with a weighted average exercise price of $9.46.
Obviously, it would not be proper to add the total 8.135 million warrants, options and SARs to the total common shares outstanding and conclude the the proper total shares outstanding is 47.655 million.
You are correct that the warrants are out of the money. However, the warrants have provisions to protect value in the event of a "fundamental change" as defined. The contemplated transactions would appear to meet that definition. But, there are also many options and stock appreciation rights. I haven't finished work on those items so I just used an estimate which I believe is conservative.
Here is some language from 10-K on warrants:
In the occurrence of a fundamental change, we are required to repurchase the Warrants at the higher of (1) the fair market value of the warrant and (2) a valuation based on a computation of the option value of the Warrant using the Black-Scholes calculation method using the assumptions described in the Warrant Agreement.
Pluspetrol for VZ $373
Plus: Vitol for Gabon 123 (net of tax and expenses)
Gross proceeds 496
Less: Debt 79.8 with 105.5% call price 84
Value to shareholders before interim financing 412
Potential interim financing / deal expenses / severance: 40 million
Net to shareholders 372
Shares outstanding 39.52 million
We know there are more than 7 million warrants and options outstanding. But they won't convert into an equal amount of shares. So assume, 45 million total shares.
412/45 = 9.16 per share
372/45= 8.27 per share
HOUSTON, Sept. 30, 2013 /PRNewswire/ -- Harvest Natural Resources, Inc. (NYSE: HNR) (Harvest or the Company) today announced that its wholly-owned subsidiary, HNR Global Holding B.V. has entered into exclusive negotiations with Vitol S.A. (Vitol), to sell the Company's 66.667 percent interest in the Dussafu Marine Permit PSC, offshore Gabon for $137.0 million in cash. Net proceeds from the sale are estimated to be approximately $123.0 million after deductions for transaction related costs and taxes. The effective date of the transaction will be October 1, 2013, and will be subject to agreed adjustments.
Harvest has agreed to negotiate exclusively with Vitol for a specified period to reach a definitive purchase and sale agreement. There can be no assurance that these negotiations will result in the proposed transaction or any other transaction for the sale of Dussafu.
The closing of the proposed transaction would be subject to, among other things, approval by the Government of Gabon and the boards of directors of both the Company and Vitol.
James A. Edmiston, President and Chief Executive Officer of Harvest Natural Resources stated, "The execution of this agreement with Vitol combined with the previously announced transaction with Pluspetrol makes clear the path the Company has chosen to unlock the value of its portfolio for the benefit of its shareholders. While we cannot make any assurance that these transactions will close, we see both transactions as complementary and look forward to working with two outstanding counterparties toward a successful conclusion."
Listened to the Panoro earnings call from August 8, 2013.
Panoro's CEO did say farm out was going to be done in 3Q. Only a few days left.
Panoro CEO also included in his presentation a copy of HNR's slide showing the potential value of Dussafu block. The HNR slide shows $550 million for contingent resources and $950 million for the the exploration value.
Referring to the exploration values on the slide, Panoro's CEO said, "Of course this shows a little bit Harvest’s view on how much value that this license can hold. And of course these are phantom numbers. We are still early in the process. We are still early in the process to be able to say, “Yes, we believe in those numbers, too.” But at least it gives some insight into what this can mean for our company and Harvest as well."
Agree. In my opinion, this stock won't be in this price area for long. Soon, the stock will be significantly higher on an announced definitive agreement, or significantly lower if the proposed deal does not move forward.
There proposed transaction -- the sale of all of the shares of HNR -- would not create a tax payable to VZ. Do we agree?