HRT announces its 4Q12 and 2012 result

RIO DE JANEIRO, March 4, 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 4^th quarter of 2012 ("4Q12") and full year of 2012. Unless as otherwise specified, the financial and operational information below are presented in consolidated basis and stated in thousands of Brazilian Reais (R$), according to the 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"), HRT America Inc. ("HRT America"), its respective subsidiaries and branches.

2012 HIGHLIGHTS

CORPORATE

• Farm-In/Farm-Out involving HRT O&G/Petra and TNK-Brasil and advance on receivables from Citibank;
  
  
• Execution of the Operational Efficiency and Cost Reduction Programs;
  
  
• Completion of the corporate reorganization and restructuring of the Investor Relations department;
  
  
• New structure of the Board of Directors, establishment of the Technical Committee, and strengthening the organization of the other Committees;
  
  
• Signing of a Term Sheet with Erickson Air Crane for the sale of the air logistics business.

SOLIMÕES BASIN

• 40% improvement in the drilling average time (m/day), in HRT-9 and HRT-10 in relation to the 4 previous wells (HRT-5, HRT-6, HRT-7 and HRT-8);
  
  
• Drilling of six wells, with gas discoveries in five of them;
  
  
• HRT-9 and HRT-10, deemed to be two of the largest gas flow rates in onshore Brazil;
  
  
• Signing of the Letter of Intent for Gas Monetization with Petrobras  and TNK-Brasil, in the Juruá field and contiguous areas;
  
  
• Granting of a 2-year extension by ANP for the 2^nd exploration period of nine blocks located in the north and central areas;
  
  
• Mobilization of QG-VIII rig to the Aruã Oil cluster in January 2013

NAMIBIA BASINS

• Completion of the Farm-Down with GALP Energia for the transfer of a 14% interest in PELs 23, 24 and 28;
  
  
• Completion of 3D seismic data processing and interpretation and release of a new report of prospective resources, prepared by DeGolyer & MacNaughton; increase of 0.5 billion BOE into HRT's portfolio;
  
  
• Extension of the exploration period to 2015, granted by Namibia's MME;
  
  
• Receipt of the Transocean Marianas semi-submersible rig, and confirmation of the start of the exploration campaign by the first quarter of 2013.

MANAGEMENT REPORT

2012 was a year of relevant achievements, when we were able to significantly move forward in exploring our assets, in controlling costs, in managing financial resources and in preparing our exploratory campaign for the offshore assets in Namibia, which is our most important project towards the future.

The Company has implemented an Operational Efficiency Program that allowed reducing the time and, consequently, the costs for drilling wells in the Solimões Basin. For that, besides the learning curve from such projects, we have relied on a team focused on cutting costs and renegotiating several contracts, which allowed: (i) reducing our headcount by more than 30%; (ii) merging the Finance Division of the Holding company and of HRT O&G; and (iii) merging several other areas, both in Rio de Janeiro and Manaus.

We have also kicked-off a Divestment Program, aiming at withdrawing HRT from businesses that are not core to the Company, in spite of being strategic for its operations, such as air logistics and drilling rigs.

The efforts of the Management Team in monitoring expenses and reducing costs have kept our daily cash burn rate consumption of resources under check and in a downtrend throughout the entire period. Along with such efforts, we did a Corporate Restructuring, rationalizing the allocation of assets and achieving higher tax efficiency in the several countries where we act.

We also would like to highlight the restructuring of the Board of Directors, increasing the number of its permanent members from 9 to 11 (out of which 8 are independent); the establishment of the Technical Committee - besides the already existing 4 others (Audit, Compliance and Risk, Compensation, and Investments); as well as the restructuring of the Investor Relations department (IR).

In the exploration campaign in the Solimões Basin, six wells were drilled during 2012 (HRT-5, HRT-6, HRT-7, HRT-8 and HRT-9, apart from HRT-10, which evaluation was completed during the first month of 2013), achieving positive results in gas and condensate in five of such wells. It is worth noting that HRT-9 and HRT-10 are among the largest onshore gas discoveries made in Brazil.

Such discoveries were important for the signing of a Letter of Intent with Petrobras and TNK-Brasil, HRT's partner company in the Solimões concessions, in order to promote studies for monetizing the natural gas from the Juruá field and contiguous areas.

Also worth of mention is the fact that ANP (Brazilian National Petroleum Agency) has granted a 2-year extension for the validity of the 2^nd exploration period of nine blocks from the Solimões Basin (BT-SOL 148, 149, 168, 169, 170, 172, 191, 194 and 195). We have also filed at that Agency a new request to extend the validity of ten other blocks in that Basin's Southern and Eastern zones.

At Namibia's offshore blocks, all actions required for the beginning of the exploration campaign were already performed as of the first quarter of 2013, for PELs 22, 23, 24 and 28, such as the leasing of the rig (Marianas, from Transocean), and the hiring of service providers and insurance companies.

One of the largest 3D seismic programs performed on West African coast, covering more than 9,000 km², was completed in 2012, allowing Degolyer & MacNaughton (D&M) to issue a new report, increasing the potential volume of risked Pmean prospective resources from 6.9 to 7.4 billion barrels of oil equivalent (BOE), of which 5.1 billion barrels of oil and condensate (bbl) and 2.3 billion BOE of gas.

Thus, HRT now has a volume of net resources of 7.8 billion BOEs in Solimões and Namibia, in addition to the 3C contingent net resources of 0.5 billion BOE in Solimões.

The Minister of Mines and Energy ("MME") of the Government of Namibia has granted the extension for initial exploration periods for all blocks, for terms ranging from June/2013 to May/2015, according to the concession.

We have executed the first Farm-Out agreement of concessions in Namibia, with the Portuguese company Galp  Energia, to transfer a 14% stake in the exploratory rights related to three licenses (PEL 23, in Walvis Basin, and PELs 24 and 28 in Orange Basin).

This entire process has prepared HRT to face the challenges, not only in 2012, but also for the upcoming years.

Marcio Rocha Mello

CEO of HRT Participações and Chairman of the Board of Directors.

4Q12 HIGHLIGHTS

CORPORATE

• Restructuring of the Investor Relations department and establishment of the Technical Committee.

SOLIMÕES BASIN

• Signature of an Amendment (including Work Plan) of the Letter of Intent for the Gas Monetization with TNK-Brasil and Petrobras, for the Juruá field and surrounding areas.

NAMIBIA BASINS

• Farm-Down Agreement with GALP Energia for the transfer of a 14% stake in the exploratory rights over PELs 24, 24 and 28;
  
  
• Completion of 3D seismic data processing and final interpretation, and release of a new report of prospective resources, prepared by D&M, , increasing HRT's portfolio by 0.5 billion BOE, reaching 7.8 billion BOEs;
  
  
• Receipt of the Transocean Marianas semi-submersible rig, and confirmation of the start of the exploration campaign by the first quarter of 2013.

HRT GROUP COMPANIES

HRT PARTICIPAÇÕES EM PETRÓLEO S.A.

HRT Participações, a publicy traded company, acts as HRT Group's holding company, headquartered in Rio de Janeiro (Brazil). It performs management and guides the execution of activities by its subsidiary companies. Its Management Team is responsible for implementing the strategic guidelines issued by the Board of Directors, which on its turn has a strong supporting structure, including five Committees, formed by three members, always including at least two sitting members from the Board of Directors.

The Board of Directors' Committees are: Audit Committee, Compensation Committee, Investments Committee, Compliance & Risk Committee, and Technical Committee, the latter has its focus on technical support for issues involving exploration activities. These Committees had their structures updated during the first Board of Directors Meeting with this new composition, held on October 17th, 2012.

According to the Company's governance rules, matters submitted to the Board of Directors for deliberation, related to a specific committee, shall be previously assessed by such committees, which will be responsible for recommending the course of action to be taken.

The participation of three of the Company's executives in the Board of Directors and its respective Committees (maximum of one per committee) strengthens the integration between the strategic guidelines issued by the Board of Directors and their implementation by the Company's Management Team. The Management Team meets officially at least on a weekly basis, and guides businesses in a direct manner and timely monitoring, implementing and valuing one of HRT's key features: efficiency in its decision-making process.

HRT OIL & GAS

HRT O&G was established to leverage on the expertise acquired in geological, geochemical and geophysical services for the oil & natural gas exploration and production activities. Currently, it holds 55% participating interest over 21 blocks within the Solimões Basin.

The Solimões Basin is located in the Brazilian Amazon region, and the blocks of the consortium between HRT O&G (55%) and TNK-Brasil (45%) cover an area of 48,507 km². According to ANP data (from August/2012), the Basin has Brazil's second largest gas reserves, and ranks third in the Brazilian oil & gas output, accounting for about 106 M BOE per day. Oil produced in the Solimões Basin has an outstanding quality, with specific density ranging from 41º to 47º API, having a strategic relevance to the Brazilian market.

Within the context of the exploration campaign during the fourth quarter of 2012, well 1-HRT-10-AM was drilled and tested, located to the south of our Solimões concessions, 30km away from the Juruá field. The discovery of gas and condensate during tests produced a stabilized flow of 520,456 m³/day of gas with a choke of 40/64'' (Absolute Open Flow - AOF - estimated in 1,600,000 m³/day). The well confirms the presence of hydrocarbons in a faulted-controlled anticlinal structure, associated with a SW-NE regional structural trend, sub-parallel to the Juruá and Tefé gas trends (Figure 1).

The drillstem test (DST) results, together with the gas findings in wells 1-HRT-5-AM and 1-HRT-9-AM, confirm the gas trend to the south and the potentials for gas in the SOL-T-191 and SOL-T-192 blocks and open a new exploratory perspective for SOL-T-214, SOL-T-215 and SOL-T-216 blocks, where the company has identified several exploratory prospects for future new wells to be drilled. The presence of a richer liquid bearing gas/condensate identified through DSTs, reinforces the geological model interpreted for the area, and consolidates the potential for gas in the region, as well as supports the gas monetization project.

New 2D seismic surveys are being carried out in areas of blocks SOL-T-194, 195, 196 and 218 in order to  further detail prospects already identified by prior seismic data reprocessing and to support the drilling of new wells in areas featuring potential for liquid hydrocarbons.

On December 17th, 2012, HRT O&G, Petrobras and TNK-Brasil signed an Amendment (including an Work Plan) to their Letter of Intent (LOI) for gas monetization in the Solimões Basin. The LOI, signed on October 15th, 2012, was amended to include the Work Plan agreed by the parties, to be developed along the next 6 months, starting in January 2013. The activities to be developed include: (1) evaluation of the natural gas resources within the study area, (2) engineering, environmental and logistics studies required to bring the natural gas to market, (3) the technical alternatives to monetize the gas, the markets for such gas and the local logistics of those markets, (4) economic evaluation of the studied alternatives and (5), the administrative aspects of the work plan.

Among the exploration activities performed, it is worth highlighting the obtaining of all environmental and operating licenses required for the seismic surveys and preparation of the drilling site of the next well to be drilled (1-HRT-11-AM), at the SOL-T-172 Block, in the Aruã cluster.

Figure 1 - Geographical location of well 1-HRT-10-AM and its relation with the discoveries of 1-HRT-5, 1-HRT-8, 1-HRT-9 and the Juruá and Urucu fields. (Click here)

HRT AFRICA

HRT operates ten exploration blocks in the Namibian coast, being eight in the Orange Basin, and two in the Walvis Basin. Additionally, HRT holds participating interest, as a non operator, in two exploration blocks in the Namibe Basin.

Namibia is located in Africa's southwest, where four offshore sedimentary basins are present: Namibe, Walvis, Lüderitz and Orange, extending over a 350 M km² area. HRT, in its 12 exploration blocks on the Namibian coast, holds a gross exploration area equivalent to 62,892 km², resulting in a net area of 51,513 km².

The figure below shows the blocks where HRT holds participating interest.

Figure 2 - Geographic location of the blocks HRT holds intrest in offshore Namibia, in the African continental margin. (Click here)

The fourth quarter of 2012 brought relevant progress in HRT's activities regarding its Namibian Project.

HRT received the new 2012 report prepared by the consulting firm DeGolyer & MacNaughton (D&M), which estimated the new volumes of prospective resources using outstanding quality 3D seismic data that HRT has gathered and processed during 2011 and 2012 in the Petroleum Exploration Licenses (PELs) 22, 23, 24 and 28, located in offshore Namibia (Table 1). Such report has elevated to approximately 7.4 billion BOE the volume of net risked Pmean prospective resources in Namibia, comprising 5.1 billion barrels of oil and condensated (bbl) and 2.3 billion BOE of associated and non-associated gas.

Table 1. Resources estimated by D&M for PELs in Namibia, considering the net risked Pmean resources. (Click here)

These volumes represent an increase of 0.5 billion BOE to HRT's portfolio, as well as an increase of 6.6% in the previously estimated volumes for HRT's exploratory licenses in Namibia. Thus, HRT now has a net risked Pmean prospective resources in Namibia and in Solimões amounting to 7.8 billion BOE, in addition to the 3C net contingent resources of 0.5 billion BOE in Solimões (Table 1).

Another relevant fact from this period was the signing of the Farm-Down Agreement with Galp Energia, to transfer a 14% participating interest in the exploratory rights over three PELs in offshore Namibia - namely PEL 23, in the Walvis Basin, and PELs 24 and 28 in the Orange Basin.

HRT shall remain as the operator of these PELs, and will start the drilling campaign during the first quarter of 2013. Galp Energia shall carry part of the operating costs, limited by a cap, related to drilling of wildcat wells. The exploration schedule foresees drilling three exploration wells on already identified and defined prospects, targeting two prospects in PEL 23 and in prospect in PEL 24.

These three PELs cover an area of 37,744 km², in water depths ranging from 180 to 2,500 meters. Both the Walvis and the Orange basins are located on a new exploration frontier, deemed as an emerging hydrocarbons province, boasting potential for significant oil and natural gas discoveries on several already identified prospects.

Combined, the main targets of these prospects hold gross recoverable resources estimated at approximately 8 billion bbl (unrisked Pmean estimate), with a Probability of Success (POS) ranging from 20 to 30%. The transfer of a 14% participating interest on the exploratory rights of the aforementioned PELs to Galp Energia has been approved by the Namibian Ministry of Mining and Energy (MME), in January 2013.

HRT has completed the whole preparation for execution and support of its drilling campaign in offshore Namibia during 4Q12. Such preparation included signing all contracts with goods and services suppliers, and also organizing and preparing the Lüderitz support base to become operational.

On January 15^th, 2013, HRT received the semi-submersible rig Transocean Marianas, from Transocean (NYSE: RIG), which shall start operating with the drilling of the first Namibian well, situated in the Wingat prospect in the Walvis Basin, at PEL-23, by the end of 1Q13. Wingat well lies in a water depth of 1,000 m, and its  drilling operation is expected to last approximately 60 days.

AIR AMAZONIA

Air Amazonia is HRT's wholly-owned subsidiary in charge of air support for execution of the exploration campaign in the Solimões Basin. By using its fleet comprised of 18 aircraft (14 helicopters and 4 airplanes), reaching a total of 2,388 hours of helicopter flight and 412 hours of airplane flight.

During 2012, 11,443 helicopter flight hours and 2,106 airplane flight hours were performed, split among logistics support to operational bases and sites of drilling; mobilization and demobilization of rigs; and transport of employees and outsourced personnel. In total, more than 20,000 tons of cargo (particularly outside cargo - "lifted") were transported, as well as 18,000 passengers.

Results achieved during 4Q12 were significant, especially regarding the increase in the average availability of the fleet (+5%) as compared to the previous quarter. Throughout 2012, Air Amazonia reached relevant progress in reducing costs and increasing productivity of the air operation. When taking into account the KPI headcount/fleet, Air Amazonia has one of the smallest ratios within the Brazilian market, equivalent to 10.33 heads per operating aircraft.

The completion of building two new hangars - one at Caruari's airport and another at the Tefe's operation base (BATE1), during the last quarter of the year, will allow a significant reduction in the number of non-operational flight hours (approximately 67%) by bringing the maintenance activities closer to the operational sites.

Air Amazonia has been working, since the beginning of its activities, permanently focusing on safety. During 4Q12, it carried on with the process of improving its Manuals of Safety Management System (SMS) and their release to all of its staff members. In parallel, by further narrowing the relationship with the Office of Accident Investigation and Prevention, it has encouraged a stronger participation of its staff members in training programs and in the development of that institution, aiming at increasing the dissemination of its philosophy of Flight Safety.

In November 6th, 2012, HRT announced the signing of a non-binding Term Sheet with the U.S. company Erickson Air-Crane Inc, for the sale of its air logistics business. The transaction involves the transference of its entire rotary-wing fleet (14 helicopters) and also envisages that the buyer will provide air services to HRT Group for a 3-year period. This agreement is subject to a Due Diligence during a period of 180-day, when its conditions should be confirmed and subsequently submitted to approval of the Board of Directors of both Companies.

HRT AMERICA

HRT America is headquartered in Houston, Texas, USA. The company relies on highly specialized and renowned professionals from the worldwide Oil & Gas industry, having more than 20 years of experience in sedimentary basins in Brazil and Africa. Its key activity is to provide exploration, drilling and production of oil and gas services to HRT Group companies, particularly to the Namibian concessions.

INTEGRATED PETROLEUM EXPERTISE CO. - IPEX

Understanding the market behavior and the key trends of the scientific area, IPEXco is a Brazilian company headquartered in Rio de Janeiro, providing integrated services and technology to support petroleum production and exploration players. IPEXco's projects are diversified and range from molecular geochemistry of oil and gas samples, to 3D basin modelling.

IPEXco has attained important certifications. According to the requirements of ISO 9001:2008, certified by BSI (British Standards Institute), the company holds a certificate of management efficiency, and is fully qualified to provide analytical services to determine hydrocarbons in Piston Core sediments and API degrees. Apart from that, it is certified by Inmetro (Brazilian Institute of Metrology, Quality and Technology) under ISO 17025:2005, which formally attests its qualification to perform tests and assessments of traces in the femtogr (10-15gr) units for organic compounds in cancer, contained in the Accreditation Scope.

As a provider of analytical services linked to the oil & gas sector, IPEXco acts in studies regarding oil spills, and also monitoring and interpreting of environmental data. The efficiency of such analysis is assured by organization and integration, as the company owns laboratories that are technologically prepared, and teams having national and international experience.

HEALTH, SAFETY, ENVIRONMENT AND SOCIAL RESPONSIBILITY

SOLIMÕES

During 2012, HRT attained a total of 38 licenses, comprising 9 authorizations for vegetation suppression, 5 for setting up support bases, 17 for right in rem of use, 2 preliminary licenses for drilling, and 5 preliminary licenses for seismic studies.

In the environmental sphere, the Company  executed the Programs for Recovery of Degraded Areas (PRAD) and the Waste and Sewage Management System, adequately disposing of residues from our operating activities.

In the social field, several activities were developed in Caruari, Ponte do Gaviao and Vila Nova, among others. The Vector Borne Disease Control and Monitoring Program (malaria, leishmaniasis, chagas disease and filariasis) is being executed as foreseen, focusing on preventive actions.

The goal of "zero accidents" remains valid through the Safety Orientation Program and "Observe, Stop and Act".

Ambulatory medical and nursery services, as well as those of emergency are still being performed at the drilling sites and support bases, also benefiting the riverside communities at the Tefé river and in the city of Caruari.

NAMIBIA

In Namibia, environmental, operational safety and health studies were executed as required for any offshore project, following industry best practices.

The environmental impact studies to obtain the drilling license for all HRT blocks in the Orange and Walvis basins in Namibia's coastline were duly performed, and all licenses required to start the drilling campaign were obtained, as well as the approval of the Contingency Plan for cases of oil spills.

HUMAN RESOURCES MANAGEMENT

The human resource management concentrated its efforts in the development and implementation of a new organizational model for HRT, which enabled a better and more accurate definition of duties involving the Holding and its subsidiaries; in managing the adequacy process of the own personnel to its actual operational needs; and in the implementation of a set of activities to value and motivate the Company`s strategic employees, such as the creation of incentive and retention plans, as well as training courses both in Brazil and abroad.

FINANCIAL RESULTS

2012 FINANCIAL RESULTS

HRT's financial results, based on the consolidated information, following the International Financial Reporting Standards (IFRS), presented a loss of R$ 277.6 million.

During 2012, HRT completed a readjustment of its structure to operate in Solimões, reducing the number of operating rigs from four to two, and decreasing its headcount by 36% against December/2011 figures.

It is worth mentioning that the exploration campaign in Solimões (seismic and drilling) and in Namibia (seismic) have only reached their full scale during the second half of 2011. With that, results for 2012 - the year of full operation - cannot be compared with those of 2011, due to the different work plans executed in these two different periods of time.

In the table below, we present the consolidated summarized results of the Company, including the results of its controlled companies HRT O&G, IPEX, HRT Netherlands, HRT America, HRT Africa, HRT Luxembourg and Air Amazonia: (Click here)

For 4Q12, EBITDA was negative R$ 159 million, an increase of 5%, less of a loss than 4Q11, explained mostly by a reduction with geology and geophysics expenses (-46%) and third-party services (-65%) due to the number of seismic studies performed during this year versus the prior financial year.

As a result, EBITDA for 2012 was negative R$ 369 million, 25% better than what was recorded during the same period of the previous year, as explained before, due to reduced expenses with geology and geophysics (-36%).

In 2011, the total number of employees accounted for an average of 585 people. The Company's focus on costs cutting resulted in a headcount reduction of 36% at the end of 2012. As a consequence, the G&A decreased more than 20%, when compared to 2011.

The increase in personnel expenses was due to the payment of a retention plan and performance bonus in the amount of R$ 60 million (cash and stock options) and to the number of terminations occurred during the fiscal year, totalling R$ 14 million.

Expenses with third-party services increased due to the charges with maintenance of aircraft belonging to controlled-companies HRT BV and Air Amazonia.

Costs previously booked as capital for well 4-HRT-7D-AM were reversed into other operating expenses, as such well was declared to have no production capacity.

The increase in depreciation and amortization charges was due to the depreciation of machinery and equipment acquired mostly from the second half of 2011 onwards, thus impacting the results of depreciation for FY 2012.

Financial income, which includes F/X fluctuations, was reduced by 40% versus FY 2011, basically due to the lower cash balance of 29% and to the reduction of the Brazilian basic interest rate (SELIC), which determines the interest earned by the company in its financial investments (average of 8.49% p.a. in 2012 against 11.62% p.a. in 2011).

Below we present, in summary form, results accumulated for 2011 and 2012, showing:

• Diminution of net income due to the reduction of services provided by IPEX to third party;
  
  
• Decrease of financial revenues due to the lower cash balance and interest rates;
  
  
• Increase of total expenses, in spite of the actions implemented for costs reduction, as the exploration campaign in the Solimões Basin was only intensified from the 2^nd half of 2011 onwards (thus having a material impact only from the 3^rd quarter of 2011 onwards) and full impact in 2012;
  
  
• Reduction of the Fiscal Year's loss compared with FY 2011, in spite of higher expenses, due the positive impacts of recording, in the 1Q12, the sale of a 45% stake in the exploratory rights over 21 blocks in the Solimões Basin to TNK-Brasil, which contributed to boost that quarter's result by R$ 186.5 million.

(Click here)

BALANCE SHEET

The table below presents the variation of the main accounts of the Balance Sheet in 2012 against 2011: (Click here)

Material variations in the Balance Sheet accounts are due to ordinary utilization of financial resources in the exploration campaigns in Solimões and Namibia, according to the details that are provided in the upcoming section, and particularly in reducing the balance of the assets held for sale and accounts payable to Petra, both of which are related to the completion of the sale transaction of a 45% stake in 21 blocks of the Solimões Basin, among Petra, HRT and TNK-Brasil.

CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES

The Company ended 4Q12 with a consolidated cash balance of R$ 1,052 billion, due to the utilization of resources in the exploration campaign in the Solimões Basin and  the progress made in the seismic campaign on the Namibian coast, according to the details provided below.

The following chart presents the liquidity curve of Company's consolidated current assets, resulting from the maturity of certain financial investment instruments and from the pledge as warranty of approximately R$ 143 million (USD 70 million) to lease the rig and related-drilling services, to be used in Namibia's exploration campaign.

In addition, we provide the breakdown by financial institution where HRT Group's funds are invested, notably internationally renowned top tier institutions. (Click here)

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 we present the breakdown for disbursements performed during 2012, by project, and grouped as recurring and non-recurring disbursements: (Click here)

Expenses incurred with exploration campaigns, amounting to R$ 693 million, refer to disbursements for activities of exploration, drilling, logistics booked as intangible, apart from expenses with our own personnel, third-party services and other expenses accrued.

Expenses with seismic, amounting to R$ 174 million, relate to exploration activities in the Solimões and Namibia basins, involving hiring services for 2D and 3D seismic surveys and data processing, arising from unpaid expenses, accrued against the results of the FY.

Expenses of G&A, amounting to R$ 62 million, refer to corporate expenses with personnel, third-party services and general and administrative expenses, apart from taxes and financial expenses of R$ 45 million that were not directly allocated to the exploration campaign, but existing for the development of the Group's exploration activities.

Non-recurring disbursements with fixed assets - amounting to R$ 75 million - basically refer to the payment for the purchase of two helicopters during the first quarter, and final payment for the purchase of four rigs and cranes.

The chart below presents the evolution of the average daily cash burn rate by project for the four quarters of FY 2012, where we can notice a decrease in the second half versus the first half of the FY, resulting from the actions to cut costs and restructuring, both at corporate level and in the Solimões project. The positive impact  during the second quarter of 2012 was due to receiving the first installment from TNK for their acquisition of a participating interest in the Solimões blocks. (Click here)

FIXED ASSETS

The two tables below provide a detailed breakdown of fixed assets and intangible assets groups. In both cases, evolution is linked to the exploration campaign in the Solimões Basin. (Click here)

DISCLAIMER

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

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 significant 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 financial results, performance or achievements of HRT to be materially different from HRT's estimated future results, performance or achievements expressed or implied by those forward-looking 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.

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SOURCE: HRT Participações em Petróleo S.A.