2009-08-11-2007-07-01-2007-09-01

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Harvest Grand Inc., a subsidiary of Harvest Energy Trust, Calgary, (Toronto: HTE-UN; NYSE: HTE) has acquired 94.6% of Grand Petroleum Inc., Calgary, (CDNX: GPP) for approximately C$103.8 million in cash. Harvest will commence a compulsory acquisition of the remaining shares at C$3.84 each. The total deal is valued at approximately C$110 million, and Harvest will assume C$35 million after closing. The assets are valued at approximately C$42,500 per flowing barrel of oil equivalent and C$24 per proved and probable barrel equivalent, according to Grand's first-quarter production and the Dec. 31 reserves report. Harvest funded the deal from its credit facilities. Grand's assets include property in southeastern Saskatchewan, the Sylvan Lake/Markerville area in Alberta and eastern Alberta. The assets are adjacent to Harvest operations with complementary drilling opportunities. Grand also has 65,000 acres (46,000 net) of undeveloped land with supporting seismic data. Production is approximately 2,322 barrels of oil and 6.5 million cubic feet of gas for a total 3,409 barrels of oil equivalent per day. Proved reserves are 2.3 million barrels of oil and gas liquids and 6.4 billion cubic feet of gas for a total 3.4 million barrels equivalent. Proved and probable reserves total 4.2 million barrels oil and gas liquids and 11 billion cubic feet for a total 6 million barrels equivalent. Haywood Securities Inc. is financial advisor to Grand. Standard & Poor's Ratings Services has affirmed Harvest's B credit rating and stable outlook. Grand's assets are analogous with the trust's portfolio, and its properties include a high component of probable reserves and undeveloped acreage, which S&P expects will provide development opportunities in line with Harvest's operations. The weakening of the trust's financial-risk profile mitigates any enhancement to its business-risk profile, S&P reports. Although debt will increase following the assumption of Grand's debt, the recently completed C$218-million equity offering will offset this, and leverage metrics will remain in line for the B-rating category.