Harvest Oil & Gas Corp., a Houston-based company formerly tied to EnerVest Ltd., announced two divestitures on Feb. 14 with combined proceeds of more than $90 million earmarked to tackle outstanding debt.

The divestitures included an agreement to divest its entire San Juan Basin position as well as the sale of all the stock it holds in Magnolia Oil & Gas Corp. (NYSE: MGY).

Harvest is a successor company of EV Energy Partners LP, a former affiliate of EnerVest Ltd. that emerged from bankruptcy in June 2018.

Last year, EnerVest, which was not a part of its affiliate’s bankruptcy filing, agreed to sell all its Eagle Ford and Giddings Field/Austin Chalk assets to the special-purpose acquisition company that would go on to become Magnolia Oil & Gas.

The transaction, worth about $2.66 billion, closed in late July 2018. About a month later, Magnolia also agreed to purchase all of Harvest’s remaining South Texas assets for roughly $191 million in cash and stock.

Harvest said Feb. 14 it had sold roughly 4.2 million shares it holds in Magnolia for net proceeds of $51.7 million. The company also expects to receive $42.8 million from an undisclosed buyer of all of its interests in the San Juan Basin in New Mexico and Colorado.

Proceeds from both divestitures will be used to reduce outstanding borrowings under Harvest’s revolving credit facility, which, as of Feb. 14, stood at $55 million outstanding, according to the company release.

Harvest said in the release that its San Juan Basin production for the first nine months of 2018 averaged 23.7 million cubic feet equivalent per day. The estimated proved reserves for the interests being divested were 163.2 billion cubic feet equivalent comprised of 65% natural gas, 30% NGL and 5% crude oil.

Following its exit from the San Juan Basin, Harvest’s assets will consist primarily of producing and non-producing properties in the Barnett Shale, the Appalachian Basin including the Utica Shale, the Permian Basin, Michigan and the Monroe Field in Northern Louisiana as well as other Midcontinent areas in Oklahoma, Texas, Arkansas, Kansas and Louisiana, according to the company’s website.

Harvest expects to close the San Juan sale in April. The transaction will have an effective date of Oct. 1, 2018.

UBS Investment Bank is Harvest’s financial adviser with Kirkland & Ellis LLP acting as its legal adviser on the San Juan sale.

Emily Patsy can be reached at epatsy@hartenergy.com.

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