HOUSTON, Aug. 20, 2012 /PRNewswire/ -- Harvest Natural Resources, Inc. (NYSE: HNR) announced today that it has entered into exchange agreements with certain existing noteholders of its 8.25% senior convertible notes pursuant to which such noteholders agreed to exchange $4,651,000 principal amount of the notes for 829,951 shares of common stock, resulting in an effective exchange price of $5.60. The conversion price of the notes issued on February 17, 2010 was $5.71. In addition, in lieu of cash, HNR agreed to issue to the noteholders 41,215 shares of common stock at $9.31 per share in exchange for foregoing a one year interest make-whole of $383,707.50. After giving effect to the exchange, approximately $10,900,000 principal amount of the notes remain outstanding. The exchange is expected to close on August 23, 2012.
Harvest also announced that it is considering offering, subject to market conditions, up to $75 million in new unsecured senior notes in the near future. There can be no assurance that the offering will be consummated. The use of proceeds from the potential debt offering would be used to fund Harvest's drilling program in Gabon and for general corporate purposes. This statement is being issued pursuant to Rule 135c of the Securities Act of 1933 (the "Securities Act") and does not constitute an offer to sell, or the solicitation of an offer to buy, any of the securities described herein in any state in which the offer, solicitation or sale is unlawful before registration or qualification under applicable securities laws. The securities intended to be offered will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of the Securities Act and applicable state securities laws.
The material terms of the exchange agreements are described in more detail in the Company's Current Report on Form 8-K, to be filed today with the Securities and Exchange Commission.