KNOC buys CanadaÔÇÖs Harvest Energy

CanadaÔÇÖs Harvest Energy has been sold to the Korea National Oil Corp. for C$1.8 billion (US$1.7 billion).  Harvest is one of Canada's largest oil producers and refiners with a current capacity of 53,400 barrels of crude and gas per day.  As of January this year it had confirmed reserves of 219.9 million barrels and 950 employees, with oil fields in Alberta, Saskatchewan and British Colombia.  The company also operates a 115,000-barrel-a-day refinery in Newfoundland and Labrador, at which it had hoped to commence a C$2 billion expansion project last year. However, it was forced to abandon its plans as the credit crunch hit. HarvestÔÇÖs upstream oil and gas production is weighted approximately 70 percent to crude oil and liquids and 30 percent to natural gas.  The purchase marks the largest acquisition of a foreign oil company by a South Korean company.  Under the terms of the agreement, KNOC will buy all the issued and outstanding trust units of Calgary, Alberta-based Harvest Energy for a total cash consideration of approximately C$1.8 billion, along with C$2.3 billion of debt.  "We are extremely pleased to announce this transaction, which provides substantial value to our investors,ÔÇØ said John Zahary, president and CEO of Harvest.  ÔÇ£Harvest has a considerable portfolio of opportunities including large oil in place assets coupled with production and throughput expansion opportunities in the upstream and downstream segments respectively.  ÔÇ£Continued investment by KNOC will supplement this growth.ÔÇØ ┬á┬á┬á┬á┬á  The deal reflects South KoreaÔÇÖs intention to catch up with China in securing overseas energy via acquisitions as oil prices rise.  Last month, KNOC said it was looking at five foreign oil firms as acquisition targets as it aims to become a mid-ranking international oil firm by 2012 and raise its daily output to 300,000 barrels. KNOC made a move into Canada in 2006, when it bought an oil sands project from gold producer Newmont Mining Corp for C$270 million. Young-won Kang, president of KNOC, commented: "Korea National Oil Corporation is excited about this acquisition and believes Harvest is a perfect fit for KNOC's North American growth strategy.  ÔÇ£KNOC has ambitious plans for future growth and is committed to a long term investment strategy in Canada.ÔÇØ  The transaction, which is subject to court and regulatory approval, is expected to close in December.  *┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á *