2011-01-14-2010-12-20

To buy 377,00 net acres in AB & BC in Willesden Green, Peace River Arch & Horn River Basin areas, gaining 11,720 BOE/d, 52.9 MMBO 2P.

Harvest Operations Corp., Calgary, (Toronto: HTE), a subsidiary of Korea National Oil Corp. (KNOC), plans to acquire certain producing and undeveloped properties in Canada from Hunt Oil Co. of Canada (HOCC) Inc. and Hunt Oil Alberta Inc., subsidiaries of Dallas-based privately held Hunt Oil Co., for C$525 million.

The assets include some 377,000 net acres of undeveloped land and approximately 11, 720 barrels of oil equivalent per day (BOE/d) of production, with complementary land positions in Willesden Green, the Peace River Arch and Southern Alberta. Upside include access to resource plays in the Willesden Green area in Alberta and in the Horn River Basin in British Columbia.

Third-quarter production consisted of 1,085 barrels of light oil, 45,500 cubic feet of gas and 3,050 barrels of natural gas liquids per day. As of June 30, proved plus probable reserves stood at 52.9 million BOE, based on an independent analysis of reserves.

In combination with the acquisition, KNOC has agreed to invest C$525 million of additional capital into Harvest in exchange for equity to fund the acquisition. The definitive agreement also contains a mechanism that allows for a subsequent C$25-million payment in the event that Canadian gas prices exceed pre-determined levels over the next two years.

The deal is expected to close by January 31, 2011.

Harvest Operations, a subsidiary of Korea National Oil Corp., or KNOC, is a significant operator in Canada's energy industry offering stakeholders exposure to an integrated structure with upstream and downstream segments. The company's upstream oil and gas production is weighted approximately 70% to crude oil and liquids and 30% to natural gas.

Scotia Waterous Inc. is the exclusive financial advisor to Hunt Oil.