Distribution to Stockholders
On November 28, 2018,
the board of directors of Harvest Natural Resources, Inc. (the “Company”) approved a cash liquidating distribution of $0.52 per share of common stock of the Company to all stockholders of record as of the close of business on
November 28, 2018. The company expects that the distribution will be paid to record holders approximately two weeks from the date of approval. The approval of the distribution follows the November 21, 2018, order of the Court of
Chancery of the State of Delaware authorizing the Company to make distributions after reserving sufficient funds to pay costs and expenses during the Company’s continued statutory winding up period, which will end on May 4, 2020. The
court’s order marks the completion of the Company’s compliance with Delaware’s safe-harbor dissolution procedures described in the Company’s definitive proxy statement filed with the Securities and Exchange Commission (the
“SEC”) on January 24, 2017. The Company currently anticipates that it will pay one or two additional distributions before May 4, 2020, when the Company’s existence is expected to terminate, to the extent funds are
available.
Newfield Litigation
In its Current
Report on Form
8-K
filed with the SEC on April 26, 2018, the Company reported on the status of the lawsuit by the Company, its subsidiary Harvest (US) Holdings, Inc., Branta LLC, and Branta
Exploration & Production Company against Newfield Production Company (“Newfield”) in the United States District Court of Colorado. On September 25, 2018, the Company and the other plaintiffs in the litigation
entered into a settlement agreement with Newfield under which the parties released each other from all claims, including any claim by Newfield for collection of Newfield’s costs in connection with the litigation and including the
plaintiffs’ right to pursue any appeal. On October 26, 2018, the court entered the final order of dismissal, under which the litigation was terminated.
Venezuelan Litigation
In its Current Report on Form
8-K
filed with the SEC on March 2, 2018, the Company reported on the institution of its lawsuit against 11 defendants in the United States District Court of Texas, Houston Division. In April 2018, the
Company dismissed two of the 11 defendants from the lawsuit. On November 13, 2018, the court granted the Company’s Notice of Voluntary Dismissal of the lawsuit, without prejudice, as to all but one of the remaining nine
defendants. The lawsuit against Rafael Dario Ramirez Carreno remains in place.
Financial Information
Attached to this Current Report on Form
8-K
as Exhibit 99.1 is the Company’s unaudited
estimated Consolidated Condensed Statement of Net Assets as of November 21, 2018 (the date of the court’s order described in “Distribution to Stockholders” above). This unaudited estimated financial statement is
presented on the liquidation basis of accounting, under which assets are stated at their net realizable values, liabilities are stated at contractual amounts, and estimated liabilities are stated at their estimated settlement amounts, including
those estimated costs associated with implementing the Company’s plan of dissolution. Estimates will be periodically reviewed and adjusted. There can be no assurance that these estimated values will be realized. These amounts
should not be taken as an indication of the timing or amount of any future distributions or the value of the assets and costs associated with carrying out the Company’s plan of dissolution. The actual value and costs associated with
carrying out the plan of dissolution are expected to differ from amounts reflected in the attached financial statement because of the plan’s inherent uncertainty. These differences could be material. It is not possible to predict
with certainty the timing or aggregate amount that may ultimately be distributed to stockholders, and no assurance can be given that possible future distributions will reflect the estimates presented. Claims, liabilities and future expenses for
operations will continue to be incurred with the execution of the Company’s plan of dissolution. These costs will reduce the amount of net assets available for ultimate distribution to stockholders. This financial statement does not
take into account the distribution to stockholders approved by the Company’s board of directors on November 28, 2018.