MATERIAL FACT - HRT signs Farm-In with TNK-Brasil for Solimões Blocks

RIO DE JANEIRO, Oct. 31, 2011 /CNW/ - HRT Participações em Petróleo S.A. (the "Company" or "HRT") (BM&FBOVESPA: HRTP3, TSX-V: HRP), announces that its subsidiary HRT O&G Exploração e Produção de Petróleo Ltda. ("HRT O&G") and a Brazilian subsidiary of TNK- BP, TNK-Brasil Exploração e Produção de Óleo e Gás Natural Ltda. ("TNK-Brasil"), have signed a Farm-In Agreement relating to the transfer of a 45% interest in concession rights over 21 blocks located in the Sedimentary Basin of Solimões covering an area of approximately 48,500 square kilometers (the "Transfer").

According to the terms agreed to by the parties, once the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis - ANP) ("ANP") approves the assignment of the concession rights from Petra Energia S.A. to HRT O&G (for which the call option was exercised on May 25, 2011), HRT O&G will effect the Transfer and will receive US$ 1 billion from TNK-Brasil over a two year period. HRT O&G will remain as operator of the blocks that are subject to the Transfer.

HRT O&G will also have the right to additional payments by TNK-Brasil which comprise reimbursement of past costs and earn-out, US$ 0.73/bbl for every barrel above 500 million BOE of total 2P reserves, which may reach up to US$ 5 billion, for a ten year period after approval of the Transfer by ANP.

TNK Brasil will have an option (exercisable 30 months after approval of the Transfer by ANP) to acquire additional 10% of HRT O&G´s concession rights in the Solimões blocks ("call"), which should be priced based on resources and reserves. Should the call not be exercised, HRT O&G will have the right to sell the same 10% to TNK-Brasil ("put"), on similar terms.

In order to carry out the transaction, besides using its own staff, HRT O&G was advised by Vinson & Elkins LLP and Goldman Sachs.

For further information, contact HRT's Investor Relations Department.

Estimates of the prospective resources have been prepared by D&M, an independent international petroleum consulting firm registered in the State of Texas.  The report has been prepared in accordance with Sections 5.9 of NI 51-101, and is based upon D&M's review of technical data including geology, geophysics and reservoir parameters.

HRT recommends that readers refer to the prospective resources report in its entirety as it details the process for determining the prospective resources estimates, the assumptions underpinning the modeling, and defines all of the technical terms used. The prospective resources estimates described in the report and in this release are "undiscovered resources" as defined in the Canadian Oil and Gas Evaluation ("COGE") Handbook.  Undiscovered resources are defined as those quantities of oil and gas estimates on a given date to be contained in accumulations yet to be discovered. The estimate of the potentially recoverable portions of undiscovered resources are classified as prospective resources. Prospective resources are defined as those quantities of oil and gas estimated on a given date to be potentially recoverable from undiscovered accumulations.

In accordance with Section 5.9 of NI 51-101, the Company declares that there is no certainty that any portion of these resources will be discovered.  If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

Other Information

About BOE

BOE's may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl  is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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About HRT
HRT Participações holds one of the largest independent oil and gas exploration and production companies in Brazil. The HRT Group comprises eight main subsidiaries: IPEX (Integrated Petroleum Expertise Company Serviços em Petróleo Ltda.), HRT O&G Exploração e Produção de Petróleo Ltda., HRT Netherlands B.V., HRT África Petróleo S.A., HRT América Inc., BN47 Serviços Aéreos Ltda., Ranger Participações Ltda. and UNX Energy Corp. The Company retains a 55% interest in 21 exploratory blocks in the Solimões Basin. HRT also operates ten exploratory blocks off the Namibian coast: eight blocks in the Orange Sub-basin and two blocks in the Walvis Sub-basin. HRT's team includes PHDs and masters in geochemistry, geophysics, biology and engineering, most of them former employees of Petrobras and ANP (Brazil petroleum agency). HRT is committed to minimizing any possible environmental impacts in the sites where it acts. Our commitment to the local communities is towards health conditions, security and quality of life. For more information, please visit the Company's website: www.hrt.com.br/ir

Disclaimer
This news release contains forward-looking statements. All statements other than statements of historical fact contained in this news release are forward-looking statements, including, without limitation, statements regarding our drilling and seismic plans, operating costs, acquisitions of equipment, expectations of finding oil, the quality of oil we expect to produce and our other plans and objectives. Readers can identify many of these statements by looking for words such as "expects", "believe", "hope" and "will" and similar words or the negative thereof. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. By their nature, forward-looking statements require us to make assumptions and, accordingly, forward-looking statements are subject to inherent risks and uncertainties. We caution readers of this news release not to place undue reliance on our forward-looking statements because a number of factors may cause actual future circumstances, results, conditions, actions or events to differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements and the assumptions underlying the forward-looking statements.

The following risk factors could affect our operations: the contingent resource and prospective resource evaluation reports involving a significant degree of uncertainty and being based on projections that may not prove to be accurate; inherent risks to the exploration and production of oil and natural gas; limited operating history as an oil and natural gas exploration and production company; drilling and other operational hazards; breakdown or failure of equipment or processes; contractor or operator errors; non-performance by third party contractors; labour disputes, disruptions or declines in productivity; increases in materials or labour costs; inability to attract sufficient labour; requirements for significant capital investment and maintenance expenses which HRT may not be able to finance; cost overruns and delays; exposure to fluctuations in currency and commodity prices; political and economic conditions in Namibia and Brazil; complex laws that can affect the cost, manner or feasibility of doing business; environmental, safety and health regulation which may become stricter in the future and lead to an increase in liabilities and capital expenditures, including indemnity and penalties for environmental damage; early termination, non-renewal and other similar provisions in concession contracts; and competition. We caution that this list of factors is not exhaustive and that, when relying on forward-looking statements to make decisions, investors and others should also carefully consider other uncertainties and potential events. The forward-looking statements herein are made based on the assumption that our plans and operations will not be affected by such risks, but that, if our plans and operations are affected by such risks, the forward-looking statements may become inaccurate.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date of this news release. Except as required by applicable securities laws, we do not undertake to update such forward-looking statements.

For further information:

Marcio Rocha Mello - CEO and Investor Relations Officer
[phone]
[e-mail]

Eliana Rodriques - IR Manager
[phone]
[e-mail]