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The Corporate Restructuring Report-Harvest Oil & Gas Corp Emerges from Bankruptcy

On 9/20/18, Harvest Oil & Gas Corp. (OTC:HRST) started tradign on the OTC markets after having successfuly completed its restructuring plan and emerging from Chapter 11 bankruptcy on June 4, 2018. HRST, fomerly known as EV Energy Partners, had filed for bankruptcy under Chapter 11 on April 2, 2018.  In connection with the Plan, senior note holders received 95% of the reorganized stock, while existing stockholders received 5% equity in the new reorganized company.  The plan led to reduction of ~$355 million in total debt.

At emergence,  HRST has access to a total liquidity of ~$50 million. In 2Q18, HRST sold its interests in its Central  Texas and Carnes County, Texas properties to Magnolia Oil & Gas Coporation for ~$190 million. In addition, HRST  also sold certain Eagle Ford formation rights and existing production in Lee County, Texas to a third party for $3.5 million. We believe liquidity at emergence, coupled with cash from the recently announced sale of assets should provide ample room to fund growth initiatives. We view HRST as a play on the improving natural gas environment. Despite near term challenges which may keep the prices in check, long-term fundamentals for the commodity continue to be bullish. The large acreage positions across US onshore basins provide the company with multiyear inventory of development drilling opportunities. For 2018, HRST plans to incur $55 - $65 million of capital investment in drilling activities, which should support production growth. In our view, the stock is undervalued at the current levels.