HRT agrees to farm out Namibia oil blocks to Galp Energia

Mon Nov 26, 2012 6:11pm EST

* Galp to take 14 pct stake in three offshore leases

* Deal calls for Galp to drill three exploratory wells

SAO PAULO Nov 26 (Reuters) - Brazil's HRT Participações em Petroleo SA said on Monday that it has agreed to a farm-out deal with Portugal's Galp Energia SGPS, offering a 14 percent stake in three offshore Namibian oil leases.

Under the deal, which is pending regulatory approval in Namibia, Galp would assume the cost of two exploratory wells in the Walvis Basin and one exploratory well in the Orange Basin in waters as deep as 2,500 meters (8,200 feet).

Last week HRT raised its estimate for oil and equivalent natural gas in its Namibian concessions to 7.391 billion barrels of oil equivalent of "potential prospective resources," based on three-dimensional seismic data.

HRT plans to start drilling in Namibia in the first quarter of 2013 after the delivery of a Transocean Ltd oil rig.

None of the oil and gas in Namibia has been proven, and if it exists it will require significant exploration work before the company could consider declaring any oil or gas discoveries commercially viable reserves.

The company's chief executive, Marcio Mello, said last week that HRT is studying a possible farm-out option in 2013 for its Solimoes assets in Brazil's Amazon. HRT's Amazon assets are part owned by Anglo-Russian oil company TNK-BP.

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