Any decision to sell its 32 percent stake in the joint venture with Petroleos de Venezuela SA will be economic and strategic, Edmiston said on a conference call today. The company can’t provide more information about the potential buyer or time frame due to a confidentiality agreement, he said.
“There will be no fire sale,” said Edmiston. “Current negotiations are at an early stage.”
Harvest climbed the most in four years on March 6 after announcing it was in talks to sell the Venezuelan assets. The company has had trouble getting regular payments from PDVSA, as its Caracas-based venture partner is known, and its assets in the South American country are undervalued because of political risk, John Malone, a senior analyst at Global Hunter Securities LLC in New York, said on March 6.
“The bond market seem to have a fairly bullish view of the Venezuelan environment given the recent run they’ve had, there seems to be a bit of disconnect there to me,” said Edmiston.
Venezuelan bonds have rallied this year with increasing investor appetite for high-yield assets and higher probability of political change before October presidential elections. President Hugo Chavez faces a unified opposition candidate as he battles cancer.
PDVSA has a 60 percent stake in Petrodelta and Vinccler CA is the other owner. The venture produced 32,548 barrels a day in the fourth quarter of 2011, a 24 percent increase from a year earlier, Edmiston said.
“Currently Petrodelta is producing about 33,000 barrels of oil per day or about 6 percent above the 2011 average,” he said.
Harvest rose 3.1 percent to $7.99 at the close in New York. The shares have gained 8.3 percent this year.
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