Harvest Energy Trust
Encyclopedia
Harvest Operations Corp. is a Canadian oil and natural gas
company based in Calgary, Alberta. Unlike many oil and gas trusts, which consist only of production fields, Harvest had both "upstream" (oil and gas wells) and "downstream" (refining and distilling) components. It operated as an open-ended investment trust
in Canada, and was one of the equities known as "Canroys" – short for "Canadian royalty trusts." In 2009 the Korea National Oil Corporation
made a buyout offer for Harvest, which was accepted, with shareholder approval. The trust was delisted from the Toronto Stock Exchange and the New York Stock Exchange in December 2009.
The former Harvest Energy Trust's oil fields are mainly in Alberta, with two in Saskatchewan; it also has assets in northern British Columbia known as the Hay River Field. Tar sand deposits and all natural gas properties were in Alberta. As of the end of 2007, Harvest claimed a production of 61,000 BOE/d (barrels or equivalent per day), and a probable lifespan of existing assets of about ten years, before depletion. It claims a total original oil in place (OOIP) amount of 2 Goilbbl, and another 1 Goilbbl in oil sands. Future plans include drilling approximately 1,000 new oil and gas wells on about 880000 acres (3,561.2 km²) of land which has previously not been developed for oil and gas production.
Harvest Energy Trust was formed in July, 2002. In 2006 it purchased the 115000 oilbbl/d North Atlantic Refinery
in Come By Chance, Newfoundland and Labrador
from Vitol Refining Group, B.V., and in so doing became the first Canadian energy trust to own its own refinery. Harvest had 924 employees and a market capitalization of US$ 3.22 billion at the end of 2007. On 22 December 2009, Harvest closed its Plan of Arrangement with the Korea National Oil Corporation, which offered C$10.00 per unit through its Canadian subsidiary, KNOC Canada Ltd. Unitholders received cash payouts in late December, with non-Canadian holders receiving payouts based on the exchange rate as of the date of closing.
The Harvest Energy Trust paid a high dividend, for example yielding an annual rate of 16.0% in early 2008; it also paid out monthly, a relative rarity for equities listed on the New York Stock Exchange. Its dividend payments were not taxed at the regular dividend rate, but rather at a 15% "Qualified Dividends" rate; this is an additional tax advantage in the United States, and applies to many royalty trusts.
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
company based in Calgary, Alberta. Unlike many oil and gas trusts, which consist only of production fields, Harvest had both "upstream" (oil and gas wells) and "downstream" (refining and distilling) components. It operated as an open-ended investment trust
Investment trust
An Investment trust is a form of collective investment found mostly in the United Kingdom. Investment trusts are closed-end funds and are constituted as public limited companies....
in Canada, and was one of the equities known as "Canroys" – short for "Canadian royalty trusts." In 2009 the Korea National Oil Corporation
Korea National Oil Corporation
Korea National Oil Corporation is the national oil and gas company of South Korea and one of the most important industrial companies in the country...
made a buyout offer for Harvest, which was accepted, with shareholder approval. The trust was delisted from the Toronto Stock Exchange and the New York Stock Exchange in December 2009.
The former Harvest Energy Trust's oil fields are mainly in Alberta, with two in Saskatchewan; it also has assets in northern British Columbia known as the Hay River Field. Tar sand deposits and all natural gas properties were in Alberta. As of the end of 2007, Harvest claimed a production of 61,000 BOE/d (barrels or equivalent per day), and a probable lifespan of existing assets of about ten years, before depletion. It claims a total original oil in place (OOIP) amount of 2 Goilbbl, and another 1 Goilbbl in oil sands. Future plans include drilling approximately 1,000 new oil and gas wells on about 880000 acres (3,561.2 km²) of land which has previously not been developed for oil and gas production.
Harvest Energy Trust was formed in July, 2002. In 2006 it purchased the 115000 oilbbl/d North Atlantic Refinery
North Atlantic Refining
North Atlantic Refining is a petroleum company based in Newfoundland and Labrador, Canada. The company operates the Come By Chance Refinery in Come By Chance that produces of oil per day....
in Come By Chance, Newfoundland and Labrador
Come By Chance, Newfoundland and Labrador
Come By Chance is a town on the Avalon Peninsula in Newfoundland and Labrador, Canada. It is in Division No. 1 on Placentia Bay.Located in this town is Newfoundland's only oil refinery, the Come By Chance Refinery operated by North Atlantic Refining Company, which has a capacity of .According to...
from Vitol Refining Group, B.V., and in so doing became the first Canadian energy trust to own its own refinery. Harvest had 924 employees and a market capitalization of US$ 3.22 billion at the end of 2007. On 22 December 2009, Harvest closed its Plan of Arrangement with the Korea National Oil Corporation, which offered C$10.00 per unit through its Canadian subsidiary, KNOC Canada Ltd. Unitholders received cash payouts in late December, with non-Canadian holders receiving payouts based on the exchange rate as of the date of closing.
The Harvest Energy Trust paid a high dividend, for example yielding an annual rate of 16.0% in early 2008; it also paid out monthly, a relative rarity for equities listed on the New York Stock Exchange. Its dividend payments were not taxed at the regular dividend rate, but rather at a 15% "Qualified Dividends" rate; this is an additional tax advantage in the United States, and applies to many royalty trusts.