HARVEST NATURAL RESOURCES, INC. (NYSE:HNR) Files An 8-K Entry into a Material Definitive Agreement

Item1.01

Sale and Purchase Agreement

On December21, 2016, Harvest Natural Resources, Inc., a Delaware
corporation (the Company), and its wholly owned
subsidiary, HNR Energia BV, a Curacao company (HNR
Energia), entered into a sale and purchase agreement (the
Sale and Purchase Agreement) with BW Energy Gabon Pte.
Ltd, a private Singapore company (the Purchaser). Under
the Sale and Purchase Agreement, HNR Energia agreed to sell to
the Purchaser all of HNR Energias 50% ownership interest in
Harvest Dussafu B.V., a Netherlands private limited liability
company (Harvest Dussafu) (the Transaction).
Harvest Dussafu owns a 66.67% interest in the Dussafu production
sharing contract covering a 210,000 acre area located offshore
Gabon. All of the Companys oil and gas interests in Gabon will be
sold under the Sale and Purchase Agreement.

Total Transaction consideration is $32million. At the closing of
the Transaction (the Closing), the Purchaser will pay
$29.5million to HNR Energia, subject to certain pre- and
post-Closing adjustments. The remaining $2.5million of
Transaction consideration was deposited into an escrow account
upon the execution of the Sale and Purchase Agreement and will be
held for up to six months after the Closing to fund termination
fees and satisfy indemnification claims under the Sale and
Purchase Agreement. Net proceeds of the Transaction are expected
to be approximately $29.7million, taking into account taxes and
Transaction costs, but disregarding any purchase price
adjustments and payments from escrow.

BW Offshore Singapore Pte. Ltd, an affiliate of the Purchaser and
BW Offshore Limited, a global provider of floating production
services to the oil and gas industry, has guaranteed the
obligations of the Purchaser under the Sale and Purchase
Agreement.

The board of directors of the Company (the Board)
unanimously determined that the Transaction is in the best
interest of the Companys stockholders and approved the
Transaction, subject to approval by the Companys stockholders.

Closing Conditions

The Closing of the Transaction is subject to the following
conditions, in addition to customary closing conditions:

The Purchasers ability to secure financing is not a condition to
the Closing of the Transaction.

No Shop and Fiduciary Out

The Sale and Purchase Agreement prohibits the Company and HNR
Energia from soliciting an alternative Acquisition Proposal (as
defined in the Sale and Purchase Agreement) to acquire the
Companys interests in Gabon and prohibits the Board from
withdrawing or modifying, in a manner adverse to the Purchaser,
its recommendation that the Companys stockholders approve the
Transaction. However, if prior to receipt of the Stockholder
Approval the Company has received an unsolicited, bona fide
written Acquisition Proposal and the Board determines in good
faith that the Acquisition Proposal constitutes or is reasonably
expected to result in a Superior Proposal (as defined in the Sale
and Purchase Agreement), the Company may participate in
discussions or negotiations regarding the Acquisition Proposal.
The Company may terminate the Sale and Purchase Agreement and
enter into an agreement with respect to a Superior Proposal, but
only after satisfying certain conditions under the Sale and
Purchase Agreement, including engaging in good faith negotiations
with the Purchaser to amend the Sale and Purchase Agreement such
that the alternative acquisition agreement no longer constitutes
a Superior Proposal.

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Outside the context of a Superior Proposal, the Board may change
its recommendation that the Companys stockholders approve the
Transaction only if there occurs a change, event or development
which (i)is material, (ii)does not relate to any alternative
Acquisition Proposal and (iii)was not known to the Board upon the
execution date of the Sale and Purchase Agreement, and the Board
determines in good faith that the failure to change its
recommendation to stockholders would constitute a breach of its
fiduciary duties under applicable law. Prior to changing its
recommendation, the Board also must take certain steps to engage
in good faith negotiations with the Purchaser to amend the Sale
and Purchase Agreement in a manner that eliminates the Boards
need to change its recommendation. A change in recommendation
alone would not relieve the Company from its obligation to file a
proxy statement and convene a stockholder meeting to vote on the
proposed Transaction, as required under the Sale and Purchase
Agreement.

Termination Matters

The Sale and Purchase Agreement contains the following
termination provisions, among other termination provisions:

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Other Material Terms

The Transaction will have an effective date of October1, 2016 for
accounting purposes.

The Sale and Purchase Agreement also contains customary
representations, warranties and covenants. These representations,
warranties and covenants were made only for purposes of the Sale
and Purchase Agreement and as of specific dates, are solely for
the benefit of the parties to the Sale and Purchase Agreement,
may be subject to limitations agreed upon by the parties,
including being qualified by confidential disclosures made for
the purposes of allocating contractual risk between the parties
to the Sale and Purchase Agreement instead of establishing these
matters as facts, and may be subject to standards of materiality
applicable to the parties that differ from those applicable to
investors. Investors should not rely on the representations,
warranties or covenants or any description thereof as
characterizations of the actual state of facts or condition of
the Company, the Purchaser or any of their respective
subsidiaries or affiliates. Moreover, information concerning the
subject matter of the representations, warranties and covenants
may change after the date of the Sale and Purchase Agreement,
which subsequent information may or may not be fully reflected in
public disclosures by the Company, the Purchaser or their
subsidiaries or affiliates.

The descriptions of the Sale and Purchase Agreement and guarantee
of BW Offshore Singapore Pte. Ltd in this Form 8-K are summaries
and are qualified by reference to the complete documents, which
are attached to this Form 8-K as Exhibits 2.1 and 10.1,
respectively, and which are incorporated by reference
herein.