RIO DE JANEIRO, May 14, 2013 /CNW/ - HRT Participações em Petróleo S.A.
- "HRT", "HRTP" or "Company" (BM&FBovespa: HRTP3 and TSX-V: HRP.V)
announces its results for the first quarter of 2013 ("1Q13"). Unless
otherwise specified, the financial and operational information below is
presented on a consolidated basis and stated in thousands of Brazilian
Reais (R$) according to International Financial Reporting Standards
(IFRS), including our direct subsidiaries: HRT O&G Exploração e
Produção de Petróleo Ltda. ("HRT O&G"), Integrated Petroleum Expertise
Company - Serviços em Petróleo Ltda. ("IPEX"), HRT Africa Petróleo S.A.
("HRT Africa"), HRT Netherlands B.V. ("Netherlands"), Air Amazonia
Serviços Aéreos Ltda. ("Air Amazonia"), and HRT America Inc. ("HRT
America"), its respective subsidiaries and branches.
Completion of the Annual Shareholders' Meeting for the election of new
Board Members through a cumulative voting procedure, increasing the
number of independent members to nine, and election of a Fiscal
Signing of a binding Term Sheet for the sale of Air Amazonia;
Qualification as an "A" Operator granted by ANP (Brazilian National
Agency of Petroleum, Natural Gas and Biofuels).
Conclusion of 1-HRT-10-AM well drill stem test;
Four-year extension of the second period of the exploration phase for 10
blocks, granted by ANP;
Spud of well 1-HRT-11-AM.
Signing of a PSA with BP Energy do Brasil to acquire 60% participating
interest in the Polvo Field.
MME approval for the transfer of a 14% participating interest in PELs
23, 24 and 28 to Galp Energia;
Spud of the first offshore well on the Wingat-1.
In the First Quarter of 2013, HRT has experienced one of the most
important achievements since the IPO: the negotiation for the
acquisition of a 60% participating interest in the Polvo Field in the
Campos Basin, in the State of Rio de Janeiro. HRT and HRT Oil & Gas
have entered into a Purchase and Sale Agreement (PSA) with BP to
acquire a 60% stake in the Polvo Field, besides the "Polvo A" fixed
platform and a 3,000 HP drilling rig for a total sum of US$ 135
Polvo's transaction and the recent confirmation of our Class "A"
Operator qualification by ANP are key milestones in the implementation
of our strategy to diversify our portfolio beyond exploration assets.
Polvo is a great fit for HRT, due to its potential and the previous
experience our staff had with the asset. Our team of upstream
professionals includes geologists and engineers who discovered and
operated Polvo prior to BP's acquisition of the asset from Devon in
2011. We know the field well and see untapped potential for further
exploration and future production within the larger license area.
It is worth noting that the completion of this transaction is subject to
certain conditions, including final ANP`s approval. But most of all, I
would like to highlight that, in less than three years since its start
up, HRT, upon conclusion of the deal, will be the 4th largest oil
producer in Brazil. We are confident that this step will keep driving
the company towards a sustainable future.
As we have mentioned last quarter, the year started with the need of
undertaking corporate initiatives, which included a review of the
organizational structure, the cash flow preservation, and the planning
of the exploratory campaigns in Namibia and in Solimões basins.
It has been a year of hard work, and we have made a lot of progress. We
have increased the operational efficiency of the drilling rigs in the
Solimões, following a steep learning curve that allowed us to
considerably reduce the drilling time and cost in the Solimões Basin.
We have concluded the drilling of the HRT-11 well in less than 60 days
and now is being evaluated.
In line with the strategy to concentrate efforts on the company´s core
business, HRT signed a binding Term Sheet with Erickson Air-Crane
regarding the sale of Air Amazonia. The transaction involves the sale
of the Company's rotary-wing fleet (14 helicopters) for US$65 million,
with the understanding that Erickson Air-Crane will provide aerial
services to the Company`s operations in the Solimões Basin for a
three-year period. This will provide flexibility and productivity to
HRT O&G work program, and the increase in efficiency will bring cost
savings to our operations in the Solimões Basin.
Talking about achievements, it is important to mention that ANP has
granted a four-year extension of the second period for 10 blocks
located in the southern and eastern parts of the Solimões Basin. This
extension confirms the commitment that HRT made to further evaluate its
frontier blocks. The gas findings in wells 1-HRT-5-AM, 1-HRT-9-AM and
1-HRT-10-AM indicate that the extension to the southern structural
trends have potential for new hydrocarbon discoveries. This new
four-year period is aligned with the strategy to expand the exploratory
campaign to the southern and eastern blocks, where seismic data have
been acquired and rigs prepared to drill.
In addition, HRT was granted an extension of concessions by the
Government of the Republic of Namibia in respect of the first
exploration rights over the ten blocks that we operate, until 2016.
Namibia is the only country in West Africa that has not made any oil
discoveries so far. HRT is confident that the combination of assets
with outstanding potential and its world-class team will allow the
company to become a leader in oil and gas.
In the first quarter, HRT announced the spud-in of the Wingat-1, at
PEL-23, the first offshore well in its three back-to-back drilling
foreseen at its exploratory campaign this year. This well had a target
to encounter the reservoirs of an Albian carbonate platform, which were
hit at 4,050 m depth below the sea-level. HRT forecasts that the
current activities in the Wingat-1 well will be concluded next week.
HRT today has a volume of net risked Pmean prospective resources, in
Namibia and Solimões, of approximately 7.8 billion BOEs, in addition to
the 3C contingent resources of 0.5 billion BOEs in the Solimões.
To conclude the quarter, we have elected a Chairman and Vice Chairman to
the Board of Directors of HRT. John Anderson Willott, former Vice
President of Exploration for North and South America and Vice President
of Worldwide Production Geoscience for Exxon Mobil, was elected as the
Chairman of the Board. Oscar Alfredo Prieto, current CEO of Pan
American Energy, was elected as Vice Chairman. The Board now has two
other new members Mr. François Moreau and Stefan Alexander. On behalf
of HRT´s management, I would like to welcome the 11 members elected and
to emphasize our commitment to keep focusing on the areas of corporate
governance and compliance to ensure that, as we grow, we continue to
reflect the international best business practices.
Milton Romeu Franke
CEO of HRT
On April 29, HRT held its Annual Shareholder's Meeting to elect its new
Board of Directors. The voting procedure resulted in the election of
additional three independent members. John Anderson Willott was elected
as the Chairman and Oscar Prieto as the Vice Chairman of the Company's
Board of Directors.
The Board was completed, with a mandate of two years, by: Marcio Rocha
Mello, Wagner Elias Peres, Elias Ndevanjema Shikongo, François Moreau,
Joseph P. Ash, Peter L. O'Brien, Stefan Alexander, Thomas W. Ebbern and
Charles Laganá Putz.
The Annual Shareholder's Meeting also elected the Company's Fiscal
Council, composed of three full members, appointed by majority of
votes: Jaime Luiz Kalsing, Marcelo Joaquim Pacheco and Edmundo Falcão
Koblitz, and three alternate members: Arnaldo José Vollet, Murici dos
Santos and Fábio Gameleira.
HRT GROUP COMPANIES - 1Q13 HIGHLIGHTS
HRT OIL & GAS
In January 2013, HRT O&G concluded the drill stem test of a cased hole
in the HRT-10 well located in the Tucumã prospect (1-HRT-192/02-AM),
block SOL-T-192, approximately 30 km to the south of the Juruá Field in
the Solimões Basin.
The tests, performed in two intervals, aimed to identify the presence of
hydrocarbons in a faulted anticlinal structure in a regional SW-NE
oriented structural lineament sub parallel to the Juruá and Tefé gas
The drill stem test results for HRT-10, together with the gas findings
in wells HRT-5 and HRT-9, confirm the gas trend potentials to the south
and south-west in the SOL-T-191 and SOL-T-192 Blocks, and open a new
exploratory play fairway for SOL-T-214, SOL-T-215 and SOL-T-216 Blocks,
for future new wells to be drilled.
The presence of a richer liquid bearing gas/condensate reinforces the
geological model interpreted for the area, consolidates the potential
for gas in the region and supports the relevance of the gas
monetization project, that is being conducted in partnership with
TNK-Brasil and Petrobras.
Figure 1 - Geographical location of well 1-HRT-10-AM (Click Here)
In March, the ANP granted an additional four-year extension to the
second period of the exploration phase for 10 blocks located in the
south and east of the Solimões Basin (SOL-T-151, SOL-T-174, SOL-T-196,
SOL-T-197, SOL-T-192, SOL-T-214, SOL-T-215, SOL-T-216, SOL-T-217 and
This concession of this extension gives HRT and TNK-Brasil, its partner
in the mentioned blocks, the opportunity to develop the exploratory
campaign up to March 2017 and to further evaluate these frontier blocks
in the Solimões Basin. This is a large and unexplored region that
covers over 27,000 km2, with potential to identify new hydrocarbon
In the second half of March, the Company spudded the well HRT-11, on the
Cajazeira prospect, at SOL-T-172 Block, located approximately 60 km to
the northeast of the Leste do Urucu Field.
The main target of this well was to identify the presence of
hydrocarbons in Carboniferous reservoirs of the Juruá Formation,
encountered at 2,230 meters depth, and the secondary target was to
identify the Devonian reservoirs of the Uerê Formation reached at 2,300
meters depth, with hydrocarbon accumulations. This well was drilled by
the QG-VIII, with a total depth of 2,400 meters and is now being
Figure 2 - 1-HRT-11-AM well on block SOL-T-172. (Click Here)
Subsequent to quarter end, in early April, HRT O&G was technically
qualified by ANP as an "A" Operator, being able to operate exploration
blocks located in onshore, shallow water, deep and ultra-deep waters.
At the end of the same month, HRT O&G filed with ANP the required
guarantees to allow its participation in the 11th Bid Round. With this
qualification as an "A" operator, HRT is able to participate, with no
restrictions, in the 11th Bid Round.
At the beginning of May, a Purchase and Sale Agreement (PSA) was signed
with BP Energy do Brasil Ltda ("BP") for the acquisition of a 60% stake
in the Polvo Field and 100% membership interest in BP Energy America
LLC, owner of the "Polvo A" fixed platform, and a drilling rig, which
amounted to US$ 135 million.
The Polvo Field, located in the southern part of the Campos Basin and
100 km east of the city of Cabo Frio, in the State of Rio de Janeiro,
currently produces approximately 13,000 barrels per day of 20.3° API
oil from three producing reservoirs. The license covers over 134 km2
of acreage with numerous attractive prospects for further exploration.
The "Polvo A" platform is connected to the "FPSO Polvo" with facilities
for hydrocarbon separation and water treatment, oil storage and
To conclude the deal, HRT (as guarantor) and its wholly-owned subsidiary
HRT O&G have entered into a Loan Agreement with Credit Suisse, through
a financial instrument called Cédula de Crédito Bancário (CCB), for the
amount of up to US$75 million. The loan has a two-year term and will be
partially repaid (US$40 million) in 180 days with the remaining amount
payable in five quarterly installments, after a 12-month grace period.
The amount of US$ 60 million that was not financed will be adjusted with
the results obtained in the exploration of the Polvo Field, up to the
closing date, once all the precedent conditions have been fulfilled,
including ANP's approval. Once concluded, the deal will have an
effective date of January 1, 2013 and HRT O&G will become the operator
of Polvo Field.
The acquisition of 60% of Polvo takes part of the Company`s strategy to
diversify its portfolio beyond exploration assets. Polvo is a great fit
for HRT. HRT has a significant knowledge of the field - acquired
through the experience of several upstream professionals who discovered
and operated Polvo prior to BP's acquisition of the asset from the
previous operator - and sees untapped potential for further exploration
and future production within the larger license area.
Figure 3 - Polvo Field location in Campos Basin (Click Here)
Figure 4 - Polvo A Rig and Polvo FPSO (Click Here)
In January 2013, the Namibia's Ministry of Mines and Energy ("MME")
approved the transfer to Galp Energia of a 14% participating interest
in the exploratory rights of Petroleum Exploration License 23 (PEL 23),
located in the Walvis Basin, and PELs 24 and 28, located in the Orange
Basin, offshore the Republic of Namibia. HRT has retained operatorship
of these PELs.
In March, HRT Africa spudded the Wingat-1 (2212/07-1) wildcat well, the
first offshore well in our 3-well back-to-back exploratory drilling
campaign. The Wingat Prospect is located in PEL 23, approximately 200
km northwest of Walvis Bay, in 1,034 meters of water depth.
The main objective of the well was to test the resource potential of the
Albian (Cretaceous) carbonate platform that has a well-defined seismic
amplitude anomaly in the PSDM-3D data set.
HRT forecasts that the current activities in the Wingat-1 well will be
concluded next week.
Figure 5 - Wingat-1 well location in Walvis Basin (Click Here)
At the beginning of March, HRT signed a binding Term Sheet with the
American company Erickson Air- Crane Inc. for the transfer of its air
logistics business, Air Amazonia.
The agreed-upon total amount for the transaction was set between US$65
million and US$75 million, and includes the sale of the Company's
rotary-wing fleet (14 helicopters), with the understanding that the
Buyer will provide aerial services to HRT's operations in the Solimões
Basin for a three-year period. The deal is contingent upon meeting
certain contractual terms.
The transaction will bring cost savings to our operations in the
FINANCIAL RESULTS - 1Q13
In the table below are the Company's summarized consolidated results,
including the results of its subsidiaries HRT O&G, IPEX, HRT
Netherlands, HRT America, HRT Africa, HRT Luxembourg and Air Amazonia. (Click Here)
The EBITDA result for the first quarter of 2013 was negative R$98
million, 266% lower than the same period in 2012. The reduction is
primarily driven by a positive result obtained, in the first quarter of
2012, through the sale of a 45% interest in the Solimões Consortium to
TNK Brasil Ltda.
Excluding the aforementioned positive effect caused by the sale to TNK,
the EBITDA would be negative R$108 million, in the first quarter of
2012, compared with negative R$98 million for this quarter, which shows
an improvement of 10%, mostly due to a 75% decrease in Geology and
It is important to highlight that, in this quarter, the share-based
compensation distributed to the employees in January 2013, was
recognized in the amount of R$ 20 million. According to international
accounting standards, it shall be considered, on the granting date, the
difference between the acquisition price and the market value, even
though only 3% of shares have been exercised.
When combined, third-party services and general and administrative items
did not change materially when compared with the prior quarter. The
headcount reduction in 2012, and the consequent decrease of the demand
for general and administrative services, explains the reduction in the
General and Administrative line item, when compared with the first
quarter of 2012.
In this quarter, costs previously booked as capital for 4-HRT-7D-AM well
were allocated under other operating expenses, since the well was
declared as having no production capacity.
Financial revenues, which include foreign exchange fluctuations, were
reduced by 58% when compared with the same period in 2012, primarily
due to a 21% decrease in the cash balance, a transfer of resources to
be invested abroad having LIBOR as reference rate, and a decrease of
the Brazilian basic interest tax rate (SELIC), which determines the
interest earned by the Company in Brazil.
The main highlights of the Income Statement in the first quarter of
2013, compared with the same quarter of the previous year, were:
Decrease of net revenues due to the reduction of services provided by
the subsidiary IPEX to third parties;
Decrease of financial revenues due to a lower cash balance and interest
Decrease of total expenses, relating to the improvement in cost control
and a headcount reduction in FY 2012; and
Reduction of the loss in the first quarter of 2013, compared with the
same period in 2012, excluding the positive impacts from the sale of a
45% interest to TNK-Brasil, concerning the exploratory rights over the
21 blocks in the Solimões Basin, which contributed R$166 million (net
of taxes) to that quarter's result.
The table below presents the variation of the main accounts of the
Balance Sheet in 2013 against 2012. (Click Here)
The Company ended the first quarter with a consolidated cash balance of
R$829 million, a decrease of 21% over the balance of the 4Q12, due to
disbursements for the exploratory campaign in the Solimões and Namibia
The decrease of R$110 million on Property, Plants and equipment refers
to the transfer of the value of the helicopters involved in the sale
transaction of Air Amazonia to the item "Assets Held for Sale" in the
The chart below presents the evolution in cash balance, showing inflows
and outflows, highlighting disbursements, inflow from revenues and
receivables due to the exercise of warrants and loans. (Click Here)
Below, it is presented the breakdown for disbursements performed in
2013, by project, and grouped as recurring and non-recurring
disbursements: (Click Here)
In the first quarter of 2013, the Company disbursed R$233 million in
recurring expenses which were:
R$ 174 million for the exploratory campaign for activities including
exploration, drilling, air, fluvial and ground logistics, for both
Solimões and Namibia.
R$34 million for seismic, related to exploration activities in the
Solimões and Namibia basins, involving hiring services of seismic
survey and seismic data processing; and
R$25 million for G&A, taxes and financial expenses, referring to
corporate expenses with personnel, administrative expenses and
corporate insurance, which were not directly allocated to the
exploratory campaign, though existing for the development of the
Group's exploration activities.
The chart below presents the variation of the average daily cash burn
rate in the 1Q13, where a slight decrease in the first quarter versus
the previous quarter is noticeable. It is important to highlight that
the positive impact (net inflow) in the second quarter of 2012 was
driven by receiving the first installment from TNK for their
acquisition of an interest in the Solimões blocks. (Click Here)
HRT Participações holds one of the largest independent oil and gas
exploration and production companies in Brazil. The HRT Group comprises
eight main subsidiaries: HRT O&G Exploração e Produção de Petróleo
Ltda., Integrated Petroleum Expertise Company - Serviços em Petróleo
Ltda., HRT Africa Petróleo S.A., HRT Netherlands B.V., Air Amazonia
Serviços Aéreos Ltda., HRT America Inc., HRT Canada Inc.. 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,
safety and quality of life. For more information, please visit the
Company's website: www.hrt.com.br/ir
Certain information contained in this document, including any
information as to our strategy, projects, plans or future financial or
operating performance and other statements that express management's
expectations or estimates of future performance constitute
"forward-looking statements". All statements, other than statements
of historical fact, are forward-looking statements. The words
"believe", "expect", "will", "anticipate", "contemplate", "target",
"plan", "continue", "budget", "may", "intend", "estimate" and similar
expressions identify forward-looking statements. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by management, are
inherently subject to signifi cant business, economic and competitive
uncertainties and contingencies. HRT cautions the reader that such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual fi nancial
results, performance or achievements of HRT to be materially different
from HRT's estimated future results, performance or achievements
expressed or implied by those forwardlooking statements and the
forward-looking statements are not guarantees of future performance.
HRT disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise, except as required by applicable law.
PDF available at: http://stream1.newswire.ca/media/2013/05/15/20130515_C7104_DOC_EN_26748.pdf
SOURCE: HRT Participações em Petróleo S.A.
For further information:
Investor Relations Contacts
+55 21 2105-9700
Carlos Tersandro Adeodato
CFO and IRO
Priscila Sarandy Domingues
IR Senior Analyst