Houston, Texas-based Harvest has about $100 million in outstanding debt.
<a href=reuters.com>Reuters
NEW YORK, April 24 - Standard & Poor's Ratings Services said today that it affirmed its 'CCC+' corporate credit rating on Harvest Natural Resources Inc. and revised its outlook on the company to stable from negative.
"The outlook revision follows a similar change to our outlook for the foreign currency rating on the Bolivarian Republic of Venezuela (CCC+/Stable/C) and Harvest's resumption of production and sales to Petroleos de Venezuela S.A. (PDVSA; CCC+/Stable/--), Venezuela's national oil company. As a result, we believe there is less uncertainty surrounding future production sales--hence, cash flow--from Harvest's Venezuela operations," said Standard & Poor's credit analyst Daniel Volpi.
Harvest's production sales to PDVSA were interrupted from Dec. 14, 2002 to Feb. 6, 2003 due to political turmoil in Venezuela. Harvest estimates that it lost roughly 1.6 million barrels of sales to 1.9 million barrels of sales over the fourth quarter of 2002 and the first quarter of 2003. With a resumption of more normalized production levels, currently about 25,000 barrels per day(bpd), 2003 production is estimated to average about 22,000 bpd to 25,000 bpd, compared with 26,000 bpd in 2002.
Harvest relies on its operations in Venezuela and its service agreement with PDVSA for essentially all of its operating cash flow. The ratings on the company are constrained by the political risk attendant to its Venezuela operations.
The stable outlook reflects Standard & Poor's expectations that Harvest will maintain normal production sales to PDVSA. Until the company becomes less reliant on its Venezuela operations, its ratings will track those of PDVSA and Venezuela. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Fixed Income in the left navigation bar, select Credit Ratings Actions.