RIO DE JANEIRO, Brazil, March 2, 2012 /CNW/ - HRT Participações em Petróleo S.A. - "HRT" or "Company" (BM&FBovespa: HRTP3 and TSX-V: HRP.V) announces its results for the 4th quarter of 2011 ("4Q11") and 2011. The financial and operating data described below, except where otherwise stated, are presented on a consolidated basis including our direct and indirect 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"), HRT America Inc. ("HRT America"), HRT Canada Inc. ("HRT Canada"), its subsidiaries and branches.
- Drilling of four exploration wells in the Solimões Basin
- Solimões seismic campaign of 2,600 km 2D and in Namibia of 9,075 Km² 3D
- HRT became the largest IOC acreage holder in offshore Namibia
- Risked resources increased to 7.9 billion BOE through UNX and Vienna acquisition
- Signature of the Farm-in Agreement with TNK-Brasil in the Solimões Basin
Filing at ANP of the granting of exploration rights of 45% over 21 blocks in the Solimões Basin to TNK-Brasil
RECENT MATERIAL REPORTS AND NEWS RELEASE
- Result of the Drill Stem Test of the HRT-4
- Spud in of the wells HRT-5, HRT-6 and HRT-7
- Extension of the second exploratory period granted by ANP for 9 blocks
The year 2011 was marked by the beginning of HRT's exploratory campaign in the basins of Solimões and Namibia. In Brazil, activities began with the construction of infrastructure to support operations in the Amazon region, with the establishment of offices in Manaus, Coari, Tefé and Carauari and three support bases for the exploratory campaign.
Ten prospects were selected for drilling with environmental permits granted by authorities and other 30 prospects were mapped in the Solimões Basin. Some 2,600 km² of 2D seismic data were acquired, in addition to full coverage of high resolution aeromagnetic and aerogravimetric surveys conducted on the 21 exploration blocks. Over 10,000 fluvial samples were analyzed through surface geochemistry.
In an effort to lower costs and increase the efficiency of its logistical operations, the Company acquired four heli-transportable drilling rigs and created the subsidiary Air Amazônia, responsible for transporting equipment and employees.
Extensive work opened the way for the start of the exploratory campaign with the drilling of four wells in 2011, all with hydrocarbon shows, confirming the potential of the Solimões Basin.
Another key factor in the development of activities was the full acquisition of exploration rights over 21 blocks located in the Solimões Basin and subsequent farm-down of 45% participating interest with TNK-BP, Russia' third largest company in the sector. TNK-BP is a strategic partner and will contribute with its extensive experience to the exploratory campaign in the Amazon region.
Committed to the sustainable development of its activities, HRT launched the Green Barrel project. For every barrel produced in the Solimões Basin, the Company will donate R$1.00 to Fundação Amazonas Sustentável, which develops projects for biodiversity conservation and the improvement of the quality of life of local communities. The company also celebrated the adoption of the Uacari Sustainable Development Reserve in the municipality of Carauari. The investment includes the construction and maintenance of a Conservation and Sustainability Center, with a primary focus on education.
In Namibia, HRT began the largest 3D seismic campaign ever undertaken on the southwestern coast of Africa, in which 9,075 km² were surveyed. In February 2011, the acquisition of UNX through a share exchange was announced, as was, in July, the acquisition of Vienna. These actions resulted in the addition of 4.9 billion BOE in prospective resources to the Company portfolio, making HRT the largest IOC acreage holder in offshore Namibia - about 70 thousand km². In order to conduct the exploratory campaign on the West African coast, HRT counts on HRT Africa (Windhoek), which is the responsible for the operation, and HRT America (Houston) responsible for the geological and geophysical studies.
The Company plains with the conclusion of the seismic data acquisition, processing and interpretation, to open a data room for possible farm-down of its assets in Namibia. HRT understands that a partner is an option for minimizing exploration risks, adding experience and enabling investment in new opportunities.
The first year of operation was of extreme importance for the structuring and beggining of HRT activities. We have a team with technical capacity and operating efficiency to continue with the exploration campaign in 2012, through the continued acquisition of seismic data, advances in oil and natural gas monetization studies, and drilling of 8 exploratory wells in the Solimões Basin, as well as process and interpret Namibia seismic and drilling of one exploratory well in Namibia.
HRT O&G FARM-OUT TO TNK-BRASIL
On January 27, 2012, HRT O&G filled a request with ANP for the transfer of concession rights, corresponding to 45% over the 21 blocks in the Solimões Basin to TNK-Brasil. In turn, TNK-Brasil presented HRT O&G with a letter of credit in the amount of US$ 1 billion to be paid in five installments over a period of two years, in accordance with the Farm-In Agreement ("FIA") signed by the parties on October 31, 2011.
HRT O&G and TNK-Brasil have also signed a First Amendment to the FIA, pursuant which HRT O&G agreed to be solely responsible for costs incurred on the Solimoes Basin campaign during 2011 and to carry TNK-Brasil in the first US$ 175 million dollars of investment beginning January 2012. Conversely, TNK-Brasil will pay up to US$ 250 million when five milestones have been reached: (i) completion of an Extended Well Test, (ii) accumulated production of 2.5 million barrels of liquids, (iii) gas monetization of at least 500 thousand cubic meters per day by means of one or more gas off take agreements, (iv) sharing of certain infrastructure, and (v) certified 2P reserves of 500 million barrels of liquids. Payments will be made on a pro rata basis to HRT, once any of the milestones are individually attained.
BY DeGolyer and MacNaughton
(To view the Resources Estimated figure, please visit the link provided at the end of this news release.)
Net Risked Resources, mean estimate
(To view the map of the four exploratory wells drilled, please visit the link provided at the end of this news release.)
The Solimões Basin is located in Brazil`s Amazon region and has an area of approximately 49 thousand km². According to official data from the ANP, the region is the third largest in Brazil in terms of domestic production of oil and gas, totaling around 100 thousand BOE per day. The oil produced in the Solimões Basin is deemed to be of excellent quality, with specific density between 41o and 46o API, and has strategic importance for the Brazilian market.
Over 2011, four exploratory wells were drilled by the Company, the results of which are detailed as follows:
The well HRT-1 was drilled in the block SOL-T-170, in the municipality of Tefé. The drilling of the well tested the extension of a Petrobras` discovery, named Norte de São Mateus. Evidence of liquid and gaseous hydrocarbons was recorded in five intervals. In our evaluation program, we tested three intervals. Two of them presented low permeability, however, 24m net pay, and the third reservoir was located below the oil-water contact. After testing, the well was cased and may be part of a Discovery Evaluation Plan to be submitted in due course to ANP.
The well HRT-2 was drilled in the block SOL-T-169, in the municipality of Tefé. The location is situated in a contingent natural gas structure, drilled in the past by Petrobras, which is a natural gas discovery well in the Juruá Formation reservoirs. Since its approval, its main purpose was to confirm a new natural gas discovery. The drilling of this well confirmed the presence of natural gas reservoirs and identified two new intervals of interest in the Devonian sequence that may be evaluated through a Discovery Evaluation Plan.
The well HRT-3 was drilled in the block SOL-T-168, in the municipality of Carauari. This was the first well to be completed and announced as natural gas discovery well. Drilled in the same structure of a gas discovery made by Petrobras, named Gavião, it drilled about 5.2 km away from the discovery well, targeting the same structural trend for gas. After the discovery, the well was cased and may be part of a Discovery Evaluation Plan to be submitted to ANP.
The well HRT-4 was drilled in the block SOL-T-194, 5.4 km northeast of the well 1-IMA-1, which is a Petrobras` discovery, 6.5 km east of the well 1-CPR-1, which belongs to the same company. After logging, in addition to evidence of oil in cuttings and in the gas detector, the presence of significant reservoirs of oil and gas in the Juruá Formation was observed. Tests were performed between December 15th and 31st, 2011 and confirmed natural gas and condensate production capacity of approximately 65o API, in a reservoir with 8m net pay in the Juruá Formation. Test results indicate potential for production of up to 250 thousand cubic meters of natural gas and 300 barrels of condensate per day in a vertical well. The rig TUS-116 remains in the block SOL-T-194 and is currently drilling the extension well 4-HRT-7D-AM in order to better estimate the commercial potential of the prospective, which could reach up to 750 thousand cubic meters of gas and 1,000 barrels of condensate per day through the directional well.
Drilling of well HRT-5 began in late December 2011, in the Sândalo prospect. Located in the block SOL-T-192, it will test a structure located around 20 km south of the Juruá Province, a Petrobras` natural gas production cluster. Its main targets are the Juruá Formation reservoirs (Carboniferous age), expected at 2,700 meters depth, as well as the Uerê Formation reservoirs (Devonian age). The well is being drilled by the rig QG-IX, scheduled to reach the final depth of around 3,000 meters.
The spudding in of well HRT-6 was in early January 2012, in the Eucalipto prospect, block SOL-T-170, and will test a structure of 20 km² of area located around 10 km southeast of the Araracanga Field and 20 km southwest of oil-producing well 1-BRSA-769-AM (Chibata). Its main targets are the Juruá Formation reservoirs (Carboniferous age), expected at 2,950 meters and the Uerê Formation reservoirs (Devonian age). The well is being drilled by the rig Tuscany-115, expected to reach the final depth of around 3,400 meters.
NATURAL GAS - PRODUCTION, MONETIZATION AND TRANSPORTATION
The 21 blocks of the Solimões Basin operated by HRT have contingent and prospective resources of natural gas. Due to this significant potential, the Company has been conducting monetization studies. The gas transportation and commercialization alternatives depend on production capacity at consistent levels over long periods in order to enable long-term sales contracts. Moreover, they are affected by environmental and regulatory restrictions, by the costs of different natural gas transport technologies, or by the local capacity for thermoelectric generation or conversion into other products. Among the alternatives evaluated are:
- Gas by Wire - local thermoelectric power generation and transmission via power lines to the national grid in Porto Velho / Manaus;
- Thermoelectric generation in Porto Velho, or in the Madeira River region and transport of gas via gas pipelines;
- Thermoelectric generation in Manaus, transportation by gas pipeline to the Solimões River (the cities of Tefé or Coari) and inland waterborne transport of LNG or CNG up to Manaus.
Gas commercialization in the Barcarena industrial complex (Mining and Metallurgy), Pará State. Transportation by gas pipeline up to the Solimões River (cities of Tefé or Coari) and inland waterborne transport of LNG or CNG up to Manaus.
3-Conversion into Chemical Products:
- Gas to Liquid (GTL): Production in situ, inland waterborne transportation of Syncrude for mixture with oil and sale to the market;
- Methanol: Production in situ, inland waterborne/road transportation to the end market;
- Ammonia / Urea: Production of fertilizers in a defined location in accordance with the market and regional logistics.
Among the transportation possibilities evaluated are:
1-Gas Pipeline: Construction of gas pipeline to the banks of the Solimões River, due to the uncertainties of navigation of the Tefé and Juruá Rivers with volumes of over 2 million cubic meters per day. Alternative of gas pipeline to Porto Velho, Rondônia.
2-LNG / CNG: Transport by barges or boats from the banks of the Solimões River to natural gas end-use market.
Air Amazonia is the company within the HRT Group responsible for the aerial logistics support in the Solimões Basin exploratory campaign. During the first year of operation 10,000 hours of flight were logged for the transportation of 18,000 passengers and volumes exceeding 17,000 tons of equipment and supplies among its support bases and drilling sites. The use of helicopters from the fleet allowed the optimization of mobilization and demobilization operations of four drilling rigs, which were moved among the well locations.
In the last quarter of 2011, five new aircraft were incorporated into its fleet, totalling 4 planes and 14 helicopters, 7 being of large capacity, 5 of medium capacity and 2 of small capacity. HRT's decision to manage its own aerial logistics operation has proved correct, especially if considering its high strategic value for ensuring the execution of its exploratory campaign and the significant cost savings realized in the last quarter, exceeding 20% when compared to market prices.
The application of knowledge acquired after the first year of air operation in Solimões permitted Air Amazonia to set a high standard of safety and quality of its services. Thus, the Company will continue to operate in 2012 aiming for greater efficiency in logistical support and an ongoing focus on cost reduction in HRT's exploratory campaign.
In December 2011, HRT hired an investment bank to assist in the search for a strategic partner for a logistics company focused on the Oil and Gas industry.
Namibia is located in southwestern Africa and has four offshore sedimentary sub-basins: the Namibe Sub-Basin, the Walvis Sub-Basin, the Lüderitz Sub-Basin and the Orange Sub-Basin, covering an area of 350,000 km². HRT is the operator of ten of its 12 exploration blocks on the Namibia coast, covering an area of 69 thousand km². The Company holds interest in the following blocks:
An extensive seismic survey was conducted in Namibia in the Walvis and Orange Basins during 2011. Approximately 8,000 km² were completed in 2011, representing 90% of the total acquired. The remaining 10%, that cover the blocks 2713A and 2713B and where the Moosehead prospect is located, were completed in early February, 2012. It's worth mentioning that the seismic campaign in Namibia totaled 9,075 km² and it represent only 13% of Company's acreage. Seismic data acquired will be processed and interpreted until 2Q12 and a data room for potential farm-down will be opened in 2Q12. The Company intends to spud its first well in Namibia in 4Q12. (Which will be subject to the availability of hiring the rig).
2012 INVESTMENT PLAN NAMIBIA AND SOLIMÕES PROJECTS
(To view the figure for the Solimões and Namibia projects, please visit the link provided at the end of this news release.)
The 2012 budget for the Solimões and Namibia projects has been updated to include recent changes in the exploratory strategy for both projects. For the Solimões Basin, up to four rigs will be used to drill 8 exploration wells over the course of the year. Some 2,200 km of 2D seismic will be surveyed in the Solimões.
In the Namibia blocks, 1,700 km² of 3D seismic will be surveyed in a new seismic campaign, in addition to the processing of some existing data. The drilling of an exploratory well in the fourth quarter 2012 is forecast, also the construction of a support base to provide support to drilling locations in Lüderitz.
HRT revised its work program and budget, adapting its investment in exploration campaigns in Solimões and Namibia in a way that estimated capex for 2012 and 2013 will be fully covered by its strong cash position. The Company believes that by doing this it will be capable of maximize the value of its assets and the return for its shareholders.
SAFETY, ENVIRONMENT, HEALTH AND SOCIAL RESPONSIBILITY
Sustainable growth, respect for the environment and society are HRT`s permanent focus of attention and supervision.
In the environment sphere, HRT continued with its Program for Germplasm Recovery and Restoration of Degraded Areas. Our researchers remain in the field performing floristic inventories in order to characterize the work areas.
In 4Q11, environmental licences were granted by the Environmental Protection Institute of the Amazonas State (IPAAM) for the launch of seismic data acquisition activities in the Block SOL-T-151, located in Coari. Establishment permits were also obtained for the Support Base for seismic activities in the Block SOL-T-174, for the Support Base for Extended Well Test (located in the Tefé River) and for the Extended Well Test flexible line.
In the Safety sphere, the Safety Orientation Program - PROSA and the Observe, Stop and Act Program- OPA are still active in the support bases. On December 30, 2011, HRT O&G achieved 365 days without work-related accident leave.
The Social Communication Program was implemented in the municipalities of Carauari and Coari. In Tefé and Carauari, HRT made a public presentation to inform citizens on the role and impact of the Company's activities in the region.
With the support of HRT, the Sustainable Amazon Foundation began the construction of two development centers in the Uacari Sustainable Development Reserve (RDS Uacari), which will have the following objectives: (i) improving the lives of the community with the intelligent use of forest resources, (ii) making the RDS Uacari a training space for all teachers in the municipality, (iii) creating a space for health professionals, and (iv) supporting the preservation of endangered species of fauna.
In Manaus, Tefé and Carauari, the "Volunteer Christmas" campaign was held, which mobilized most of our employees. The delivery of charitable donations took place between December 19 and 23 in communities where HRT operates.
Outpatient medical care and emergency care are continue to be provided to riverside communities around HRT´s facilities in the Tefé River, as well as the activities of monitoring and control of vector-borne diseases (malaria, leishmaniasis, Chagas disease and filariasis).
Management Discussion and Analysis
Financial Statements 12/31/2011
Consolidated financial statements have been compiled and are presented in accordance with accounting practices adopted in Brazil, which include the provisions of the Corporation Law and accounting standards and procedures issued by the Securities and Exchange Commission (CVM) and the Brazilian Accounting Pronouncements Committee (CPC), which are in accordance with international accounting standards issued by the International Accounting Standards Board (IASB).
ECONOMIC- FINANCIAL RESULTS
The Company's consolidated result includes the results of its subsidiaries HRT O&G, IPEX, HRT Netherlands, HRT America, HRT Africa, HRT Canada and Air Amazonia.
(To view the figure that presents the values for the main income and expense accounts of the periods, please visit the link provided at the end of this news release.)
It is worthwhile to mention that the comparison with previous periods is impaired and results should not be analyzed as a trend, since only from the first quarter of 2011, after the inflow of funds obtained through the Initial Public Offering, which occurred in the last quarter of 2010, the Company increased its exploration activities for oil and gas both in the Solimões and Namibia basins.
Net revenue was recorded by the subsidiary IPEX, which earned income through the geological and geophysical survey services rendered to third parties in the amount of R$ 1.6 million in the 4Q11 (R$ 6.2 million in the 4Q11 of 2010).
The Company earned interest income in the 4Q11 of R$ 46.6 million (R$ 47.4 million in the 4Q11of 2010) relating to the performance from funds in fixed income investments in addition to the positive results of derivative transactions.
FISCAL YEAR 2011
Cumulative net revenue was recorded by the subsidiary IPEX that had revenues from geological and geophysical survey services rendered to third parties in the amount of R$ 9.9 million in 2011 (R$ 15.6 million in 2010).
The Company earned interest income in 2011 of R$ 246.5 million (R$ 67.5 million in 2010) relating to the interest from investments of its cash and cash equivalents in fixed-income investments in addition to income from derivative transactions.
4Q11 AND FISCAL YEAR 2011
The cost of services in the amount of R$ 2.5 million and R$ 9.4 million, respectively, in the 4Q11 of 2011 and cumulative for 2011, refers to costs related to geophysical and geological survey services rendered to third parties by the subsidiary IPEX.
Total expenses for the quarter reached R$ 167 million, 54% above that recorded in the same quarter last year. This increase was mainly due to the implementation of the Company's Investment Program, which featured an acceleration in the exploration expenses (geology and geophysics) in the period, from R$ 12 million in the 4Q11 of 2010 to R$ 76 million in 4Q11 of 2011, primarily as seismic surveying activities both in the Solimões and in Namibia basins.
Growth in the headcount was consistent with the increase in exploratory campaigns in the Solimões Basin and the commencement of exploration activities in the coast of Namibia, including the start of operations in 2011 of offices in the United States, Canada and Africa, in addition to the start of activities of the aerial logistics company - Air Amazonia with headquarters in Manaus.
Personnel expenses, in turn, in the amount of R $ 69.1 million, were 17% below those recorded in the same quarter last year, a fact due to the duly approved Bonus in 2010, which did not recur in 2011.
FISCAL YEAR 2011
Total expenses reached R$ 491.1 million, 157% above that recorded in 2010 of R$ 190.8 million. This variation was consequence of the implementation of the Company's Investment Program, which featured the acceleration in the exploration expenses (geology and geophysics) in the period, from R$ 19.5 million in 2010 to R$ 228.6 million in 2011.
Personnel expenses of R$ 145.4 million were 13% above those recorded in 2010 as a result of an increase in our headcount, and the annual salary increase granted in proportion, approximately 7% from the third quarter of 2011. Of the total cost of personnel, those associated with the Solimões Project accounted for 72% of the total (34% in 2010), the Namibia Project 13% (2% in 2010) and Corporate 15% (64% in 2010).
Expenses on third-party services of R$ 49.9 million and general and administrative expenses of R$ 54.5 million increased 114% and 246% respectively. This increase is associated with the advance of exploration activities both in the Solimões Basin and in Namibia which involved, among others, the hiring of consultants, contractors, attorneys, headcount growth and establishment of new offices.
The depreciation and amortization expenses of R$ 17.5 million in 2011, greater than the expense of R$ 1.9 million in 2010, stems from the increase in the value of consolidated fixed assets which varied from R$ 38.4 million in 2010 to R$ 323.6 million in 2011.
Financing expenses of R$ 20.4 million in 2011 versus R$ 15 million in 2010 was due primarily to expenses recorded on derivative transactions within the Company's strategy to protect the cash against exchange exposure by its subsidiary HRT O&G.
Expenses on income tax and social security contributions of R$ 23.2 million in 2011 greater than expenses of R$ 3.4 million recorded in 2010 result from interest income growth recorded by the holding company HRT Participações.
The table below present the variation of the balances of the main equity accounts in the four quarters of 2011 compared to the balances as of December 31, 2010 and balances at the end of the last three years.
(To view the Balance Sheet table, please visit the link provided at the end of this news release.)
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES
The Company ended the fiscal year with a consolidated cash of R$ 1,491million, a decrease of 38.5% over the balance at the end of the previous fiscal year, incurred as a result of the acceleration of the exploratory campaign in the Solimões Basin and the start of the seismic campaign on the Coast of Namibia.
The graph below presents the evolution of the cash balance with the statement of cash inflows and outflows, especially disbursements, inflow from financial income and capital inflows through the exercise of warrants.
The table below presents the disbursements breakdown recorded in the fiscal year of 2011, consolidating them between recurring and non-recurring disbursements.
(To view the Cash Flow and Breakdown tables, please visit the link provided at the end of this news release.)
Exploratory campaign expenses in the amount of R$ 488 million refer to disbursements for exploration activity, drilling, aerial, fluvial and land logistics activities allocated under intangible assets, in addition to the costs of the own personnel and third-party services allocated as expenses.
Disbursements with seismic in the amount of R$ 229 million are related to the Solimões and Namibia basins exploratory activities and include the hiring of 2D and 3D seismic survey and interpretation.
G&A expenses in the amount of R$ 49 million refer to personnel expenses, third-party services, general and administrative expenses and taxes not allocated directly to the exploratory campaign, though incurred to serve the development of the HRT Group's exploration activities.
Non-recurring disbursement with fixed asset in the amount of R$ 301 million refer to the purchase of airplanes, helicopters, rigs, vessels, heavy vehicles and equipment for the opening-up of locations, improvement in real state as well as inventory and spare parts to be used in drilling activities (wells), all aimed at the exploratory campaign in the Solimões Basin, allocated as fixed assets.
The acquisition of subscription bonus refer to disbursements for the purchase of assets of Vienna and UNX (participating interest in blocks on the coast of Namibia) and payment to PETRA regarding the transfer of 4% participating interest in 21 blocks in the Solimões Basin and the 1st installment, from a total of five, of the value payable for the purchase of the remaining 45% interest (assets held for sale).
The Company and its subsidiaries have no bank indebtedness.
In addition to the accounts that impacted results for the year 2011, there were significant variations in some asset and liability accounts, in particular:
Assets held for sale and Petra accounts payable
On December 7, 2011, the subsidiary HRT O&G concluded negotiations with its then partner in the Solimões Basin, PETRA Energia S.A., in order to establish the final acquisition value of a 45% participating interest in 21 blocks in the Solimões Basin in the amount of R$ 1,288.7 million and payment terms of 5 semi-annual installments. Also, in December 2011, after approval of the transfer by the Brazilian National Petroleum Agency (ANP), payment of 1st installment in the amount of R$ 257.7 million was made and the 4 remaining installments were accrued in the financial statements of December 31, 2011, with two installments totaling R$ 515.5 million due in 2012 and classified as current liabilities and 2 installments of the same value of R$ 515.5 million, classified as non-current liabilities.
This transaction refers to the acquisition of 45% exploration rights in 21 blocks in the Solimões Basin and is therefore classified as an asset held for sale, considering the agreement between HRT O&G and TNK-BP through its subsidiary in Brazil, for the transfer of this participating interest for US$ 1 billion to be paid in 5 semi-annual installments. This farm in transaction is supported by a Letter of Credit issued on January 26, 2012 by TNK in favor of HRT O&G.
(To view the Cash and Financial Revenues Evolution table, please visit the link provided at the end of this news release.)
- Helicopters and airplanes - Payments until December 31, 2011 relating to purchases of aircraft that are already in operation in the logistics of the Solimões Basin exploratory campaign. Facilities, improvements, furniture and fixtures refer to investments in real estate where HRT Group offices are established in Rio de Janeiro and Manaus (Brazil), Houston (USA), Calgary (Canada) and Windhoek (Namibia).
- Advance payment for the acquisition of heli-transportable rigs from Sichuan Honghua Petroleum Equipment Ltd., through its representative Andrews Technologies, Inc.
- Vehicles refer to equipment acquired for the operation and are primarily comprised of tractors, forklifts, excavators, among others.
- Vessels refer to specialized boats purchased for operations to control hydrocarbon spills in rivers.
- Machines and equipment refer to drill-pipes, casings, flexible lines for extended well tests, chemicals used as drilling fluid, parts and components used in drilling activity and that will represent expenses when used.
(To view the Intangible Assets table, please visit the link provided at the end of this news release.)
- Subscription Bonus - Solimões - represent the amounts paid for the participating interest in 21 blocks in the Solimões Basin corresponding to a 55% interest.
- Subscription Bonus - Namibia - acquisition of shareholding stakes in companies holding rights over blocks on the coast of Namibia, through the acquisition in cash and stock swap.
- Exploration Expenses incurred in the Solimões Basin exploratory campaign (drilling of wells, logistics and infrastructure);
The evolution of the share capital of the Company is presented below, with two important milestones, the first being the Initial Public Offering of Shares (IPO) held in October 2010 and the issuance of shares in April 2011, regarding the exchange of shares with UNX with respect to the acquisition of participating interest in blocks on the coast of Namibia.
Additionally, we had capital increases in 2011 by the exercise of rights by shareholders who participated in two private placements in 2009, through warrants in the amount of R$ 193.2 million and stock options of R$ 1.1 million.
(To view the Capital table, please visit the link provided at the end of this news release.)
FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS
Financial investments are, mainly, constituted by Certificate of Deposits (CDBs) issued by first-tier banks. Financial revenues are accrued based on the variation of the Interbank Certificate of Deposit - CDI.
On December 31, 2011, the Company held R$ 1,030.9 million in deposits with financial institutions to guarantees issued by them maturing on 5/31/2012, equivalent to four installments, from a total of five, relating to the purchase of the remaining 45% of exploration rights of 21 blocks of the Solimoes basin from Petra Energia S.A..
Additionally, the Company, through its subsidiary HRT O&G, holds derivative operations (Non Delivery Forward -NDF's) with the specific aim of protecting its cash flow from exchange rate exposure of its payment flow over the next 12 months. On December 31, 2011, the company held U.S. dollar purchase contracts with monthly maturities consistent with the cash requirements over the course of 2012 totaling USD 118.00 million.
To view the Figures and Tables referenced, please visit: http://files.newswire.ca/736/HRT_4Q11_Figures.pdf
For further information:
Francisco Lourenço Bastos-Tigre - CFO and Investor Relations Officer
+55 21 2105-9700
Fábio Bueno - IR Manager
+55 21 2105-9745