RIO DE JANEIRO, Feb. 13, 2015 /CNW/
- PetroRio1 ("PetroRio" or the
"Company"), the new brand of HRT Participações em Petróleo S.A.,
hereby announces the signing of arm's length purchase and sale
agreements dated January 20, 2015
(the "Agreements") to acquire 80% of the rights and obligations of
the concession contracts for the Bijupirá and Salema Fields with Shell Brasil Petróleo Ltda.
("Shell"), Petróleo Brasileiro S.A. – Petrobras, holds the
remaining 20%. The transaction also involves the acquisition of,
among other assets, the FPSO Fluminense, used in the production
process of both fields, with storage capacity for 1.3 million
barrels of oil. Only upon approval from Brazilian regulatory
agencies will the Company become the owner and operator of the
concession contract interests covering these producing fields.
The Bijupirá and Salema Fields,
located in water depths of 480 and 850 meters, are located in the
Pre-Salt polygon, just 80 km northeast of the Polvo Field,
PetroRio's first production asset, generating important synergy
opportunities between the operations. The two upstream concession
contracts which contain the Fields cover an area of
40,000,000 m2, and daily production therefrom currently
totals 22,000 barrels of light oil and 325,000 m3 of
associated gas. The oil extracted from the fields is light from 28°
to 31° API.
The total acquisition price under the Agreements is US$150 million, subject to adjustment, payable in
cash. 20% of the acquisition price for the fields was funded
in part with cash on hand resulting from the first issuance of the
Company's convertible debentures which was completed in
December 2014. The key attributes and
other information about the convertible debentures are set forth in
news releases dated October 24,
December 1, and December 9, 2014.
The balance of 80% of the acquisition price is payable at
closing, upon satisfaction or waiver of all closing conditions, and
may be funded through its existing standby credit facility provided
by a syndicate of lenders led by Glencore Ltd., a subsidiary of
Glencore PLC.
The completion of the purchase and sale transaction between
PetroRio and Shell is subject to certain conditions precedent,
including approval of the assignment of rights by Brazil's Council for Economic Defense (CADE)
and the National Agency of Petroleum, Natural Gas and Biofuels
(ANP). Receipt of required regulatory approvals and the subsequent
Closing may take several months, or may not occur at all.
The Company has retained an independent qualified reserves
evaluator to prepare a geological report in compliance with the
Canadian Securities Administrators' National Instrument 51-101
Standards of Disclosure for Oil and Gas Activities (the "Report"),
and the Report is expected to be received on or about March 6, 2015. The Report will be used by the
TSX-V as supporting documentation in determining whether or not to
accept the proposed transaction, and it is expected that the Report
will assist investors in assessing the proposed transaction. A
further news release will be issued by the Company when the Report
is available, providing further details on the assets proposed to
be acquired under the Agreements. Investors are cautioned that,
until the Report is prepared and disclosed,there may not be
sufficient informationabout the assets so as to enable investors to
make a reasonable investment decisionabout the transaction.
PetroRio is born of a new corporate culture focused on
increasing production through the acquisition of production assets,
the re-exploration and optimization of the Polvo, Bijupirá and
Salema Fields, increasing
operational efficiency and reducing production costs and corporate
expenses, as well as eliminating exploration risk. The Company's
main objective is to create value for its shareholders, protecting
its liquidity and increasing revenue and profits, with full respect
for safety and the environment.
1 The Company's corporate name will remain HRT
Participações em Petróleo S.A., until the modification is approved
at the Shareholders' Meeting, in accordance with proposal to be
submitted by Management. The Company's shares and GDSs will
continue to be traded under the tickers HRTP3 on the
BM&FBOVESPA and HRP on TSX-V until the new corporate name is
approved and the request to change the tickers is authorized by the
BM&FBOVESPA and the Brazilian Securities and Exchange
Commission (CVM). The Company will keep its shareholders and the
market in general informed of the progress of this process.
About PetroRio
PetroRio, through its subsidiaries, holds a 60% participating
interest and it is also the operator of the Polvo Field, which is
located in the southern portion of the Campos Basin, at 100km east
of the city of Cabo Frio, Rio de
Janeiro. PetroRio has Brazil's seventh largest daily production of
barrels of oil equivalent (boe), with 20.3º API, deriving from
three producing reservoirs. PetroRio is the owner, through its
subsidiaries, of "Polvo A" fixed platform and a 3.000HP drilling
rig, currently in operation in the field, being the platform
connected to the "Polvo FPSO" vessel, with capacity to segregate
hydrocarbons and water treatment, oil storage and offloading. Polvo
Field license covers an area of approximately 134km2,
with several prospects with potential for further explorations.
Additionally, PetroRio holds a 55% interest and is the operator of
17 exploration blocks in the Solimões Basin, and also operates ten
exploration blocks off the Namibian coast, in the Orange and Walvis
sub-basins. PetroRio is committed to minimizing any possible
environmental impacts on 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.petroriosa.com.br
Reader Advisories
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 the expected benefits of
the proposed acquisition under the Agreements, the expected source
of funding for the balance of the total acquisition price under the
Agreements, the expected time for completing closing of the
proposed acquisition under the Agreements, the proposed change of
the Company name to PetroRio 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, as well
as our ability to complete the proposed acquisition under the
Agreements and to realize the expected benefits of the proposed
acquisition: 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;
labor disputes, disruptions or declines in productivity; increases
in materials or labor costs; inability to obtain required
regulatory approvals; inability to attract sufficient labor;
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 these cautionary statements. 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.
The term "boe" may be misleading, particularly if used in
isolation. A boe conversion ratio of six thousand cubic feet to one
barrel is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead.
Sedar Profile # 00031536
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE HRT Participações em Petróleo S.A.