DeGolyer and MacNaughton

5001 Spri ng Valley Road

Sui te 800 East
Dallas, Texas 75244








This is a digital representation of a DeGolyer and MacNaughton report.

This file is intended to be a manifestation of certain data in the subject report and as such are
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DeGolyer and MacNaughton
5001 Spri ng Valley Road
Sui te 800 East
Dallas, Texas 75244

APPRAISAL REPORT
as of
DECEMBER 31, 2013
on
RESERVES
of the
POLVO FIELD
in
BRAZIL
owned by
HRT O&G EXPLORAO e PRODUO de PETRLEO LTDA.

NI 51-101
DeGolyer and MacNaughton

TABLE of CONTENTS


Page
FOREWORD ............................................................................................................ 1
Scope of Investigation ........................................................................................................ 1
Authority ............................................................................................................................... 3
Source of Information ......................................................................................................... 3
GEOLOGY ............................................................................................................... 4
CLASSIFICATION of RESERVES ...................................................................... 6
ESTIMATION of RESERVES ............................................................................... 9
VALUATION of RESERVES ............................................................................... 13
SUMMARY and CONCLUSIONS ....................................................................... 17
Professional Qualification ...............................................................................................19
CERTIFICATE of QUALIFICATION ................................................................ 21
TABLES
Table 1 Summary of Gross and Net Oil Reserves
Table 2 Reservoir Parameters, All Reservoirs
Table 3 Reservoir Parameters, Turonian East Reservoir
Table 4 Projection of Proved Developed Reserves and Future Net Revenue
Table 5 Projection of Total Proved Reserves and Future Net Revenue
Table 6 Projection of Proved-plus-Probable Reserves and Future Net Revenue
Table 7 Projection of Proved-plus-Probable-plus-Possible Reserves and
Future Net Revenue
FIGURES
Figure 1 Location Map
Figure 2 Stratigraphic Column
Figure 3 Structure Map, Top of 80 Sand Reservoir
Figure 4 Isopach Map, Proved Net Oil, 80 Sand Reservoir
Figure 5 Structure Map, Top of 100 Sand Reservoir
Figure 6 Isopach Map, Proved Net Oil, 100 Sand Reservoir
Figure 7 Structure Map, Top of 110 Sand Reservoir
Figure 8 Isopach Map, Proved Net Oil, 110 Sand Reservoir
Figure 9 Structure Map, Top of 160-170 Sand Reservoir East
Figure 10 Isopach Map, Proved Net Oil, 160-170 Sand Reservoir East
Figure 11 Structure Map, Top of 160-170 Sand Reservoir West
Figure 12 Isopach Map, Proved Net Oil, 160-170 Sand Reservoir West
Figure 13 Structure Map, Top of Quissam Reservoir
Figure 14 Isopach Map, Proved-plus-Probable-plus-Possible Net Oil, Quissam
Reservoir
Figure 15 Production History Plot


DeGolyer and MacNaughton
5001 Spri ng Valley Road
Sui te 800 East
Dallas, Texas 75244


APPRAISAL REPORT
as of
DECEMBER 31, 2013
on
RESERVES
of the
POLVO FIELD
in
BRAZIL
owned by
HRT O&G EXPLORAO e PRODUO de PETRLEO LTDA.

NI 51-101
FOREWORD
Scope of Investigation This report presents an appraisal, as of
December 31, 2013, of the extent of the
proved, probable, and possible crude oil reserves and the value of the proved, proved-
plus-probable, and proved-plus-probable-plus-possible reserves of the Polvo field,
located in the Campos Basin, Brazil. HRT O&G Explorao e Produo de Petrleo
Ltda. (HRT O&G) has represented that it owns a 60-percent working interest in the
Polvo field in license block BM-C-8 in the Campos Basin under the terms of
exploration and production licenses, and is the field operator.

Estimates of proved reserves presented in
this report have been prepared using reserves definitions established by Canadian
National Instrument 51101. These reserves definitions are discussed in detail in
the Classification of Reserves section of this report.

Reserves estimated in this report are
expressed as gross and net reserves. Gross reserves are defined as the total
estimated petroleum to be produced from the properties after December 31, 2013.

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DeGolyer and MacNaughton
Net reserves are defined as that portion of the gross reserves attributable to
interests owned by HRT O&G after deducting all interests owned by others,
including royalties paid in kind. HRT O&G has advised that its government royalty
obligation is paid in cash; therefore, net reserves have not been reduced in
consideration of this royalty obligation.

This report also presents values that were
estimated for proved, proved-plus-probable, and proved-plus-probable-plus-possible
reserves of certain fields using prices and costs based on data provided by HRT
O&G. A detailed explanation of the future price and cost assumptions is included in
the Valuation of Reserves section of this report. All values in this report are
expressed in United States dollars (U.S.$). No conversion from U.S.$ to Canadian
dollars has been prepared. This evaluation was prepared under a forecast price and
cost case, with no escalation applied to prices and costs.

Values of the net reserves in this report
are expressed in terms of estimated future gross revenue, future net revenue, and
present worth. Future gross revenue is that revenue which will accrue to HRT O&G
from the production and sale of the estimated net reserves. Future net revenue is
calculated by deducting royalties paid in cash, operating expenses, capital costs, and
the special participation fee from the future gross revenue. Operating expenses
include field operating expenses, well workover expenses, leasing costs associated
with the floating production, storage, and offloading vessel (FPSO), transportation
expenses, compression charges, and an allocation of overhead that directly relates to
production activities. Future income taxes have not been accounted for in this
evaluation. Present worth is defined as the future net revenue discounted at a
specified arbitrary discount rate compounded monthly over the expected period of
realization. In this report present worth values using a nominal discount rate of
10 percent are reported in detail and values using nominal discount rates of 8, 12,
15, and 20 percent are reported as totals. The future net revenue estimated herein,
discounted and undiscounted, should not be construed to represent fair market
value.

Estimates of oil reserves and future net
revenue, as applicable, should be regarded only as estimates that may change as
further production history and additional information become available. Not only
are such estimates based on that information which is currently available, but such
reserves and revenue estimates are also subject to the uncertainties inherent in the
application of judgmental factors in interpreting such information.

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DeGolyer and MacNaughton
Authority This report was authorized by
Dr. Nilo Chagas de Azambuja Filho, Chief
Executive Officer, HRT O&G.


Source of Information Information used in the preparation of
this report was obtained from HRT O&G.
In the preparation of this report we have relied, without independent verification,
upon information furnished by HRT O&G with respect to property interests owned,
production from such properties, current costs of operation and development,
current prices for production, agreements relating to current and future operations
and sale of production, and various other information and data that were accepted
as represented. A field examination of the properties was not considered necessary
for the purposes of this report.

4

DeGolyer and MacNaughton
GEOLOGY
The Polvo field is located in the Campos
Basin, offshore Brazil (Figure 1). The field lies about 100 kilometers east of Cabo
Frio, Rio de Janeiro State.

In the Campos Basin, regional dip is
toward the southeast, reflecting basinward dip caused by the opening of the Atlantic
Ocean during the early Cretaceous. This structural configuration is also present in
the Polvo field.

Basement rocks in the Campos Basin are
Precambrian granites (Figure 2). As the basin began to open and fill, basalts of the
Cabinas Formation flowed onto the granite basement. The earliest sediments in
the basin are lacustrine shales and carbonates of the Lagoa Feia Formation, which
is the primary hydrocarbon source formation for the basin. After the original rifting
period, a massive sequence of continental and marine sediments accumulated in the
basin. The lower part of this sequence is made up of conglomerates and carbonates,
which are subsequently covered by a thick evaporite section composed
predominantly of salt and anhydrite. Above the evaporites are mudstones and oolitic
grainstones, deposited during Albian time when a broad carbonate platform
developed in the region. In the Polvo field, the Albian carbonates are the Quissam
members of the Maca Formation. These carbonates accumulated in shallow water
on northeast-trending local structural highs atop basement or salt uplifts.

As basin subsidence continued, coastal
rivers flooded sands into the basin. These sands were deposited in environments
ranging from deep-water turbidites to shallow-water deltaic and bay-lagoon settings.
This style of sedimentation continued from the Cenomanian until the Miocene. In
the Polvo field, the sandstones were deposited in coastal plains, lagoon, and
bay-deltaic environments.

In the Polvo field, early exploration and
appraisal wells identified five oil-productive reservoir intervals located in separate
areas of the field. From deepest to shallowest, these are the Quissam carbonates,
Turonian-age sandstones (160/170 reservoir), and Maastrichtian-age sandstones (80,
100, and 110 reservoirs). Ultimately, 13 exploration and appraisal wells were drilled
to delineate the productive limits of these formations.


5

DeGolyer and MacNaughton
Early wells identified several areas of
Quissam carbonate accumulation, but after further evaluation only two of these
areas were targeted for additional development, the Dev-7 and Dev-4&5 shoal areas,
in the western part of the field. Six platform wells have been drilled and completed
as producers from the Quissam accumulation. Four wells are currently producing.

The Turonian and Maastrichtian
sandstones were found to be well developed and productive in separate
accumulations east of the Quissam wells. This part of the field was originally
known as the Guarajuba field. At present, three wells produce from the
Maastrichtian reservoir, three produce from the Turonian West reservoir, and one
produces from the Turonian East reservoir.

Productive reservoir volumes were
estimated using standard volumetric methods based on geological mapping utilizing
seismic data and well logs. Structure and isopach maps were drawn for each
reservoir. Isopach maps of the sandstone reservoirs were drawn using limits based
on stratigraphy and structural oil-water contacts. In many of the sandstone
reservoirs, the productive sands were often cut by overlying unconformities that
formed the northern, western, and eastern limits. The southern, downdip limit was
often an estimated oil-water contact. Isopach maps of the Quissam reservoirs were
bounded by faulting, stratigraphy, and oil-water contact limits. The Dev-7 and
Dev-4&5 areas are interpreted to be separated by faults and not in communication,
as evidenced by different oil/water contact depths. These maps are shown on Figures
3 through 14.

Volumetric estimates for all evaluated
reservoirs are shown in Table 2. The volumetric estimates for the Turonian East
reservoir are shown separately in Table 3.


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DeGolyer and MacNaughton
CLASSIFICATION of RESERVES
Petroleum reserves included in this report
are classified by degree of proof as proved, probable, or possible. For purposes of this
report reserves are those quantities of oil or gas anticipated to be economically
recoverable from known accumulations. The definitions of reserves shown below
serve as the basis for the estimates contained herein. The definitions are in
accordance with those prepared for the Canadian National Instrument 51-101 as
presented in the Canadian Oil and Gas Evaluation Handbook (COGEH) Second
Edition September 1, 2007, Volume 1 Reserves Definitions and Evaluation Practices
and Procedures, Section 5. The petroleum reserves are classified in accordance with
Sections 5.4.1, 5.4.2, and 5.4.3 of COGEH shown below. Section 5 of the COGEH
contains the complete and official explanation of reserves definitions utilized herein.

Reserves Categories Reserves are estimated remaining quantities of oil and natural
gas and related substances anticipated to be recoverable from known accumulations,
as of a given date, based on

analysis of drilling, geological, geophysical, and engineering data;

the use of established technology;

specified economic conditions, which are generally accepted as being
reasonable, and shall be disclosed.

Reserves are classified according to the degree of certainty associated with the
estimates.

Proved Reserves Proved reserves are those reserves that can be
estimated with a high degree of certainty to be recoverable. It is likely
that the actual remaining quantities recovered will exceed the
estimated proved reserves.

Probable Reserves Probable reserves are those additional reserves
that are less certain to be recovered than proved reserves. It is equally
likely that the actual remaining quantities recovered will be greater or
less than the sum of the estimated proved + probable reserves.

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DeGolyer and MacNaughton
Possible Reserves Possible reserves are those additional reserves
that are less certain to be recovered than probable reserves. It is
unlikely that the actual remaining quantities recovered will exceed
the sum of the estimated proved + probable + possible reserves.

Development and Production Status Each of the reserves categories (proved,
probable, and possible) may be divided into developed and undeveloped categories.

Developed Reserves Developed reserves are those reserves that are
expected to be recovered from existing wells and installed facilities or,
if facilities have not been installed, that would involve a low
expenditure (e.g., when compared to the cost of drilling a well) to put
the reserves on production. The developed category may be subdivided
into producing and non-producing.

Developed Producing Reserves Developed producing reserves
are those reserves that are expected to be recovered from
completion intervals open at the time of the estimate. These
reserves may be currently producing or, if shut in, they must
have previously been on production, and the date of resumption
of production must be known with reasonable certainty.

Developed Non-producing Reserves Developed non-producing
reserves are those reserves that either have not been on
production, or have previously been on production, but are shut
in and the date of resumption of production is unknown.

Undeveloped Reserves Undeveloped reserves are those reserves
expected to be recovered from known accumulations where a
significant expenditure (e.g., when compared to the cost of drilling a
well) is required to render them capable of production. They must fully
meet the requirements of the reserves category (proved, probable,
possible) to which they are assigned.

8

DeGolyer and MacNaughton
In multi-well pools, it may be appropriate to allocate total pool
reserves between the developed and undeveloped categories or to
subdivide the developed reserves for the pool between developed
producing and developed non-producing. This allocation should be
based on the estimators assessment as to the reserves that will be
recovered from specific wells, facilities, and completion intervals in the
pool and their respective development and production status.

Levels of Certainty for Reported Reserves The qualitative certainty levels contained
in the definitions in Section 5.4.1 [Reserves Categories above] are applicable to
individual reserves entities, which refers to the lowest level at which reserves
calculations are performed, and to reported reserves, which refers to the highest
level sum of individual entity estimates for which reserves estimates are presented.
Reported Reserves should target the following levels of certainty under a specific set
of economic conditions:

at least a 90 percent probability that the quantities actually recovered will
equal or exceed the estimated proved reserves,

at least a 50 percent probability that the quantities actually recovered will
equal or exceed the sum of the estimated proved + probable reserves,

at least a 10 percent probability that the quantities actually recovered will
equal or exceed the sum of the estimated proved + probable + possible
reserves.

A quantitative measure of the certainty
levels pertaining to estimates prepared for the various reserves categories is
desirable to provide a clearer understanding of the associated risks and
uncertainties. However, the majority of reserves estimates are prepared using
deterministic methods that do not provide a mathematically derived quantitative
measure of probability. In principle, there should be no difference between estimates
prepared using probabilistic or deterministic methods.

9

DeGolyer and MacNaughton
ESTIMATION of RESERVES
Estimates of reserves were prepared by
the use of appropriate geologic, petroleum engineering, and evaluation principles
and techniques that are in accordance with practices generally recognized by the
petroleum industry and in accordance with definitions established by the PRMS.
The method or combination of methods used in the analysis of each reservoir was
tempered by experience with similar reservoirs, stage of development, quality and
completeness of basic data, and production history.

The volumetric method was used to
estimate the original oil in place (OOIP). Structure maps were prepared to delineate
each reservoir, and isopach maps were constructed to estimate reservoir volume.
Electrical logs, radioactivity logs, core analyses, and other available data were used
to prepare these maps as well as to estimate representative values for porosity and
water saturation.

Estimates of ultimate recovery were
obtained after applying recovery factors to OOIP. These recovery factors were based
on consideration of the type of energy inherent in the reservoirs, analyses of the
petroleum, the structural positions of the properties, and the production histories.
Reservoir performance parameters such as cumulative production, producing rate,
reservoir pressure, gas-oil ratio behavior, and water production were considered in
estimating recovery efficiencies used in determining gross ultimate recovery.

For depletion-type reservoirs or other
reservoirs where performance has disclosed a reliable decline in producing-rate
trends or other diagnostic characteristics, reserves were estimated by the
application of appropriate decline curves or other performance relationships. In
analyzing decline curves, reserves were estimated to the calculated economic limits
based on a forecast price and cost case, with no escalation applied to prices and
costs.

In certain cases where the previously
named methods could not be used, reserves were estimated by analogy based upon
historical performance of wells within the same reservoir.



10

DeGolyer and MacNaughton
The reserves estimates presented herein
were performance based and considered monthly production data to December 31,
2013. Estimated cumulative production, as of December 31, 2013, was deducted from
the gross ultimate recovery to determine the estimated gross reserves.

The Polvo field was discovered in 1993 by
Petrobras with the drilling of the 1-RJS-486A well. In 2000, during the Agncia
Nacional de Petrleos (ANP) second licensing round, the BM-C-8 concession area
containing the Polvo field was awarded to Devon Energy do Brasil Ltda. (Devon) and
partners. Devon continued field delineation drilling and development. A portion of
the BM-C-8 concession area was relinquished following declaration of commerciality
and the establishment of the Polvo Development Area ring fence. The BM-C-8
concession extends 27 years following declaration of commerciality (2005). In 2011,
BP acquired Devons interest in the Polvo field, and in 2013 HRT O&G acquired
BPs interest in the field. In all reserves cases contained herein, the economic limit
was reached before license expiration.

Production commenced in the Polvo field
in August 2007. Figure 15 shows the historical field production. During December
2013, the average daily production was 11,634 barrels of oil per day and
36,470 barrels of water per day. Cumulative oil production through December 31,
2013, was 31.3 million barrels. The average gravity of the produced Polvo crude is
21 degrees API. The producing gas-oil ratio in the field is less than 100 cubic feet per
barrel and all produced gas is either used as fuel or flared.

The water depth in Polvo field ranges
from 90 to 250 meters. The field was developed with a drilling/production platform
and an FPSO, both in water depth of approximately 100 meters. A multiphase
pipeline transports the produced fluids from the platform to the FPSO. The primary
processing facilities are located on the FPSO, which has a production capacity of
150,000 barrels of fluid per day. All producing wells are horizontal/highly deviated
and are completed with electric submersible pumps (ESP). Based on pressure
measurements and historical water production data, most of the Polvo field
reservoirs produce with moderate to active aquifer support. A single water-injection
well has been completed in the Maastrichtian reservoir.

An evaluation of the OOIP in the
Turonian East reservoir was performed to assist in estimating the potential results
of additional development drilling. Three wells have penetrated the eastern area of
11

DeGolyer and MacNaughton
the Turonian reservoir: 7-POL-24HP-RJS (POL_Oy), 7-POL-23HP-RJS (POL_Ox),
and 9-POL-22D-RJS (POL_O). Of these three wells, the POL_O well was the only
well with sufficient well log data to estimate net oil pay thickness, which confirmed
the isopach map constructed for the Turonian East reservoir (Figure 10). The highly
deviated well encountered an estimated 30.9 meters of net oil pay with an apparent
dip-corrected true vertical thickness of approximately 26.6 meters. Reservoir quality
in the Turonian is excellent, with a weighted-average porosity of about 30 percent.
Two additional wells, classified as proved undeveloped and probable, are planned to
target the Turonian reservoir in the north and northeastern updip area of the
accumulation.

Proved developed reserves were estimated
by analysis of individual well oil rate versus time decline-curve analysis. Proved
undeveloped reserves were estimated for one future well location, the POL_Z well in
the Turonian East reservoir. This location is a direct offset to the POL_Oy well and
approximately 20 feet updip. The POL_Z well is expected to be drilled and to
produce during the third quarter of 2014. Additional proved undeveloped reserves
were estimated in the other reservoirs based on extension of the economic limit of
the field by approximately 1 year with the drilling of the POL_Z well. Probable
reserves were estimated for one additional location in the Turonian East reservoir
(the POL_E well). This well would be drilled in the first quarter of 2015 to the east
of the POL_Z well location. Additional probable reserves were estimated for more
favorable production behavior in all reservoirs than that considered in estimating
proved reserves. Possible reserves were also estimated for the Maastrichtian and
Turonian reservoirs considering more favorable behavior than that used to estimate
probable reserves.

No gas reserves were estimated for the
Polvo field, since there are no plans for gas sales.

Table 1 presents a summary of the gross
and net oil reserves of the Polvo field. Table 2 presents reservoir parameters and
gross oil reserves for the entire Polvo field. Table 3 presents reservoir parameters
and gross oil reserves for the Turonian East reservoir (160-170 sand). The oil
quantities shown on Table 3 are included in the field total data shown on Table 2.




12

DeGolyer and MacNaughton
The estimated gross and net proved
developed, proved undeveloped, total proved, probable, and possible oil reserves of
the Polvo field, as of December 31, 2013, are summarized as follows, expressed in
thousands of barrels (Mbbl):

Oil Reserves

Gross
(Mbbl)
Net
(Mbbl)

Proved
Developed 7,991 4,794
Undeveloped 7,035 4,221

Total Proved 15,026 9,015

Probable 9,343 5,606
Possible 6,056 3,633

Notes:
1. Probable and possible reserves are
presented as required by Canadian
National Instrument 51101 and
are not equivalent to proved
reserves.
2. Possible reserves are those
additional reserves that are less
certain to be recovered than
probable reserves. It is unlikely
that the quantities actually
recovered will equal or exceed the
sum of the proved, probable, and
possible reserves.

13

DeGolyer and MacNaughton
VALUATION of RESERVES
Revenue values in this report have been
prepared using prices and costs and future price and cost assumptions that are
compliant with Canadian National Instrument 51101. A forecast price and cost
case is presented herein using prices and costs provided by HRT O&G with no
escalation applied to prices and costs. The future net revenue estimated herein,
discounted and undiscounted, should not be construed to represent fair market
value.

Values for proved, proved-plus-probable,
and proved-plus-probable-plus-possible reserves were based on projections of
estimated future production and revenue prepared for these properties.

Estimates of future net revenue have
been made in accordance with the Government of Brazils Petroleum Law n 9,478,
the Petroleum Law of 1997. The fiscal terms outlined in the Petroleum Law of 1997
and assessable to HRT O&G as well as other economic assumptions used in this
evaluation are presented as follows:
Brazilian Fiscal Terms
The Petroleum Law of 1997 affords the Brazilian Government
three elements of government take: 1) petroleum levies
consisting of royalties, a special participation fee, and surface
rentals; 2) direct taxes, which are levied through the financial
transaction tax, the corporate income tax, and two social
contribution taxes; and 3) indirect taxes, which are levies on
equipment and services used by companies engaged in
exploration and production activities. Indirect tax levies for
which HRT O&G may be responsible have not been included in
the estimates of operating expenses and capital costs. Certain
indirect levies are eligible for reimbursement from sales of
refined products. The reimbursement of the indirect levies from
refined product sales has not been accounted for in this
evaluation.


14

DeGolyer and MacNaughton
Royalties
The federal royalty rate in Brazil varies by field between 5 and
10 percent. The Polvo fields federal royalty rate is 10 percent
as provided by HRT O&G.

Oil royalty is assessed on the market value of the oil (and
condensate), which is defined as the greater of the sales price
or the market valuation as determined by the ANP. Gas royalty
is levied on the market value of the gas production less gas
injected.
Special Participation Fee
The special participation fee (SPF) is a tax assessed at the field
level on a sliding scale basis that varies depending on the
location of the field (onshore or offshore), water depth, level of
production, and number of years on production. The tax basis
for the SPF is similar to the tax basis for corporation tax (CIT)
with some exceptions. Drilling costs are depreciated using a
units-of-production basis for SPF, but expensed for CIT. An
annual provision for abandonment costs is also deductible for
SPF, but expensed in the year incurred for CIT. In years in
which the SPF is paid there is an additional 1-percent research
and development fee assessed.
Surface Rental Fees
Rental fees are payable to the ANP and vary by field,
depending on stage of activity (exploration or development),
geological characteristics, and location of sedimentary basin.
The surface rental fees are included herein in the estimates of
field operating expenses.
Corporate Income Tax
As advised by HRT O&G, Brazilian income taxes have not been
considered in this evaluation.
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DeGolyer and MacNaughton
Social Contribution Taxes
Two social contribution taxes are levied on the market value of
oil and gas sales. The Contribution for the Workers Social
Integration Program (PIS) is assessed at a rate of 1.65 percent
and the Contribution for Social Security Funding (COFINS) is
levied at a 7.6-percent rate. These taxes have not been
considered in the future net revenues included herein.
Oil Prices
A price case compliant with provisions of Canadian National
Instrument 51-101 was used in this evaluation. HRT O&G
provided the 2013 crude oil sales data from the Polvo field. The
12-month average product price was U.S.$99.56 per barrel of
oil, which was held constant over the life of the evaluation.
Operating Expenses and Capital Costs
The Polvo field operating costs were estimated based on
information provided by HRT O&G related to the FPSO lease
costs, platform cost, and other operating expenses. Based on
these data, an algorithm of fixed and variable operating costs
was developed for the field. The estimated gross fixed annual
operating expenses were estimated to be U.S.$145 million per
year and the gross variable expenses were estimated to be
U.S.$5.50 per barrel. These cost estimates do not include any
associated indirect taxes that may be assessed on these
expenses.

Capital costs have been estimated for the drilling of one
additional proved undeveloped location and one additional
probable location. The gross drilling, completion, and hook-up
costs for each well were estimated to be U.S.$35 million based
on the most recent drilling cost data provided by HRT O&G.

Estimates of abandonment costs were based on information
provided by HRT O&G and were included as an operating cost
in the year following cessation of production. The gross
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DeGolyer and MacNaughton
abandonment costs provided by HRT O&G were
U.S.$80 million.

All operating expenses and capital costs were projected in
constant 2014 U.S. dollar terms. No general escalation that
might result from inflation has been applied.
Exchange Rate
All costs and revenues included herein are estimated in U.S.
dollars and have not been converted from other currencies.

Summaries of future net revenue for the
proved developed, total proved, proved-plus-probable, and proved-plus-probable-
plus-possible reserves are presented in Tables 4 through 7.

The estimated future net revenue and
present worth to be derived from the production and sale of HRT O&Gs proved
developed, total proved, proved-plus-probable, and proved-plus-probable-plus-
possible net reserves, as of December 31, 2013, of the properties appraised are
summarized as follows, expressed in thousands of United States dollars (M U.S.$):





Proved
Developed
(M U.S.$)
Total
Proved
(M U.S.$)
Proved plus
Probable
(M U.S.$)
Proved plus
Probable plus
Possible
(M U.S.$)

Future Gross Revenue 477,291 897,534 1,455,666 1,817,368
Other Revenue 0 0 0 0
Royalties Paid in Cash 47,847 89,969 145,934 186,988
Operating Expenses 335,369 445,582 650,418 757,402
Capital Costs 0 21,600 43,200 43,200
SPF 0 0 0 2,129
Future Net Revenue 94,075 340,383 616,114 827,649
Present Worth at 10 Percent 94,561 295,470 513,989 668,422

Notes:
1. Values for probable and possible reserves are presented as required by Canadian National
Instrument 51101 and are not equivalent to values for proved reserves.
2. Values associated with possible reserves are those additional values that are less certain to be
realized than those associated with probable reserves. It is unlikely that the quantities
actually recovered will equal or exceed the sum of the proved, probable, and possible reserves.
3. Future income tax expenses were not taken into account in the preparation of these estimates.
4. The future net revenue estimated herein, discounted and undiscounted, should not be
construed to represent fair market value.
17

DeGolyer and MacNaughton
SUMMARY and CONCLUSIONS
The estimated gross and net proved
developed, proved undeveloped, total proved, probable, and possible oil reserves of
the Polvo field, as of December 31, 2013, are summarized as follows, expressed in
thousands of barrels (Mbbl):

Oil Reserves

Gross
(Mbbl)
Net
(Mbbl)

Proved
Developed 7,991 4,794
Undeveloped 7,035 4,221

Total Proved 15,026 9,015

Probable 9,343 5,606
Possible 6,056 3,633

Notes:
1. Probable and possible reserves are
presented as required by Canadian
National Instrument 51101 and
are not equivalent to proved
reserves.
2. Possible reserves are those
additional reserves that are less
certain to be recovered than
probable reserves. It is unlikely
that the quantities actually
recovered will equal or exceed the
sum of the proved, probable, and
possible reserves.





DeGolyer and MacNaughton
5001 Spri ng valley road
Sui te 800 east
Dallas, Texas 75244


CANADIAN NATIONAL INSTRUMENT 51-101
FORM 51-101F2
REPORT ON RESERVES DATA
BY
INDEPENDENT QUALIFIED RESERVES
EVALUATOR

To the board of directors of HRT Participaces em Petrleo S.A. (the Company):


1. We have evaluated the Companys reserves data as of December 31, 2013.
The reserves data are estimates of proved reserves and probable reserves and
related future net revenue as of December 31, 2013, estimated using forecast
prices and costs.

2. The reserves data are the responsibility of the Companys management. Our
responsibility is to express an opinion on the reserves data based on our
evaluation.

3. We carried out our evaluation in accordance with standards set out in the
Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook")
prepared jointly by the Society of Petroleum Evaluation Engineers (Calgary
Chapter) and the Canadian Institute of Mining, Metallurgy & Petroleum
(Petroleum Society).

4. Those standards require that we plan and perform an evaluation to assure
that reserves estimates are free of material misstatement. An evaluation also
includes assessing whether the reserves data are in accordance with
principles and definitions presented in the COGE Handbook.

5. The following table sets forth the estimated future net revenue (before
deduction of income taxes) in thousands of United States dollars (M U.S.$)
for proved-plus-probable reserves, estimated using forecast prices and costs
and calculated using a discount rate of 10 percent included in the reserves
data of the Company evaluated by us for the year ended,

TABLE 1
SUMMARY of GROSS and NET OIL RESERVES
as of
DECEMBER 31, 2013
for the
POLVO FIELD
in
BRAZIL
owned by
HRT O&G EXPLORAO e PRODUO de PETRLEO LTDA.
NI 51-101
Gross Reserves
Proved
Field Developed Undeveloped Total Probable Possible
Reservoir (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
Polvo
Quissama 955 175 1,130 1,534 245
Maastrichtian 3,454 664 4,118 2,001 1,339
Turonian 3,582 6,196 9,778 5,808 4,472
_____________ _____________ _____________ _____________ _____________
Total 7,991 7,035 15,026 9,343 6,056
Net Reserves
Proved
Field Developed Undeveloped Total Probable Possible
Reservoir (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
Polvo
Quissama 573 105 678 920 147
Maastrichtian 2,072 398 2,470 1,201 803
Turonian 2,149 3,718 5,867 3,485 2,683
_____________ _____________ _____________ _____________ _____________
Total 4,794 4,221 9,015 5,606 3,633
Notes:
1. Probable and possible reserves are presented as required by Canadian National Instrument 51101 and are not
equivalent to proved reserves.
2. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves.
It is unlikely that the quantities actually recovered will equal or exceed the sum of the proved, probable,
and possible reserves.
TABLE 2
RESERVOIR PARAMETERS
and
GROSS OIL RESERVES
as of
DECEMBER 31, 2013
for the
POLVO FIELD
in
BRAZIL
NI 51-101
Reservoir
Quissama Maastrichtian Turonian Total
Porosity, % 18.25 24.8 29.0
Water Saturation, % 12.9 27.0 22.1
Oil Formation Volume Factor, rb/stb 1.02 1.04 1.04
Original Oil in Place, bbl/acre-ft 1,186 1,400 1,685
Proved
Area, acres 731 1,813 2,434
Reservoir Volume, acre-ft 81,305 51,983 69,573
Original Oil in Place, Mbbl 94,573 69,994 112,735
Oil Recovery Factor, % 8.2 24.9 18.8
Gross Ultimate Oil Recovery, Mbbl 7,756 17,460 21,171 46,387
Cumulative Oil Production , Mbbl 6,626 13,342 11,393 31,361
Gross Oil Reserves, Mbbl 1,130 4,118 9,778 15,026
Proved plus Probable
Area, acres 1,304 1,813 2,434
Reservoir Volume, acre-ft 195,591 51,983 69,573
Original Oil in Place, Mbbl 227,508 69,994 112,735
Oil Recovery Factor, % 4.1 27.8 23.9
Gross Ultimate Oil Recovery, Mbbl 9,290 19,461 26,979 55,730
Cumulative Oil Production , Mbbl 6,626 13,342 11,393 31,361
Gross Oil Reserves, Mbbl 2,664 6,119 15,586 24,369
Probable Oil Reserves, Mbbl 1,534 2,001 5,808 9,343
Proved plus Probable plus Possible
Area, acres 1,304 1,813 2,434
Reservoir Volume, acre-ft 195,591 51,983 69,573
Original Oil in Place, Mbbl 227,508 69,994 112,735
Oil Recovery Factor, % 4.2 29.7 27.9
Gross Ultimate Oil Recovery, Mbbl 9,535 20,800 31,451 61,786
Cumulative Oil Production , Mbbl 6,626 13,342 11,393 31,361
Gross Oil Reserves, Mbbl 2,909 7,458 20,058 30,425
Possible Oil Reserves, Mbbl 245 1,339 4,472 6,056
Notes:
1. Probable and possible reserves are presented as required by Canadian National Instrument 51101 and
are not equivalent to proved reserves.
2. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves.
It is unlikely that the quantities actually recovered will equal or exceed the sum of the proved, probable,
and possible reserves.
2. Probable reserves include incremental reserves estimated from the proved reservoir volumes
at the recovery factors associated with the probable reserves.
3. Possible reserves include incremental reserves estimated from the proved and probable
reservoir volumes at the recovery factors associated with the possible reserves.
TABLE 3
RESERVOIR PARAMETERS
and
GROSS OIL RESERVES
as of
DECEMBER 31, 2013
for the
TURONIAN EAST RESERVOIR
POLVO FIELD
in
BRAZIL
NI 51-101
Turonian East
Porosity, % 25.3
Water Saturation, % 16.0
Oil Formation Volume Factor, rb/stb 1.04
Original Oil in Place, bbl/acre-ft 1,585
Proved
Area, acres 1,198
Reservoir Volume, acre-ft 43,923
Original Oil in Place, Mbbl 69,632
Oil Recovery Factor, % 17.7
Gross Ultimate Oil Recovery, Mbbl 12,358
Cumulative Oil Production , Mbbl 4,414
Gross Oil Reserves, Mbbl 7,944
Proved plus Probable
Area, acres 1,198
Reservoir Volume, acre-ft 43,923
Original Oil in Place, Mbbl 69,632
Oil Recovery Factor, % 24.3
Gross Ultimate Oil Recovery, Mbbl 16,887
Cumulative Oil Production , Mbbl 4,414
Gross Oil Reserves, Mbbl 12,473
Probable Oil Reserves, Mbbl 4,529
Proved plus Probable plus Possible
Area, acres 1,198
Reservoir Volume, acre-ft 43,923
Original Oil in Place, Mbbl 69,632
Oil Recovery Factor, % 29.4
Gross Ultimate Oil Recovery, Mbbl 20,501
Cumulative Oil Production , Mbbl 4,414
Gross Oil Reserves, Mbbl 16,087
Possible Oil Reserves, Mbbl 3,614
Notes:
1. Probable and possible reserves are presented as required by Canadian National Instrument
51101 and are not equivalent to proved reserves.
2. Possible reserves are those additional reserves that are less certain to be recovered than
probable reserves. It is unlikely that the quantities actually recovered will equal or exceed
the sum of the proved, probable, and possible reserves.
3. Probable and possible reserves have not been risk adjusted to make them comparable to
proved reserves.
4. Probable reserves are incremental reserves estimated from the proved reservoir volumes
at the recovery factors associated with the probable reserves.
5. Possible reserves are incremental reserves estimated from the proved and probable
reservoir volumes at the recovery factors associated with the possible reserves.
6. Probable reserves include 942 Mbbl in the POL-Z well and 3,177 Mbbl in the POL-E well.
7. Possible reserves include 256 Mbbl in the POL-Z well and 3,858 Mbbl in the POL-E well.
TABLE 4
PROJECTION of PROVED DEVELOPED RESERVES and FUTURE NET REVENUE
as of
DECEMBER 31, 2013
from the
POLVO FIELD
in
BRAZIL
with interests owned by
HRT O&G EXPLORAO e PRODUO de PETRLEO LTDA.
NI 51-101
Net Future Pre-Tax Pre-Tax
Oil Oil Gross Other Operating Capital Future Net Present Worth
Production Price Revenue Revenue Royalties Expenses Costs SPF Revenue at 10 Percent
Year (Mbbl) (U.S.$/bbl) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$)
2014 2,094 99.56 208,479 0 20,905 98,519 0 0 89,055 83,715
2015 1,547 99.56 154,019 0 15,438 95,509 0 0 43,072 36,652
2016 1,153 99.56 114,793 0 11,504 93,341 0 0 9,948 7,663
2017 0 - 0 0 0 48,000 0 0 (48,000) (33,469)
2018 0 - 0 0 0 0 0 0 0 0
2019 0 - 0 0 0 0 0 0 0 0
2020 0 - 0 0 0 0 0 0 0 0
2021 0 - 0 0 0 0 0 0 0 0
2022 0 - 0 0 0 0 0 0 0 0
2023 0 - 0 0 0 0 0 0 0 0
2024 0 - 0 0 0 0 0 0 0 0
2025 0 - 0 0 0 0 0 0 0 0
2026 0 - 0 0 0 0 0 0 0 0
2027 0 - 0 0 0 0 0 0 0 0
2028 0 - 0 0 0 0 0 0 0 0
2029 0 - 0 0 0 0 0 0 0 0
2030 0 - 0 0 0 0 0 0 0 0
2031 0 - 0 0 0 0 0 0 0 0
2032 0 - 0 0 0 0 0 0 0 0
2033 0 - 0 0 0 0 0 0 0 0
2034 0 - 0 0 0 0 0 0 0 0
2035 0 - 0 0 0 0 0 0 0 0
2036 0 - 0 0 0 0 0 0 0 0
2037 0 - 0 0 0 0 0 0 0 0
Total 4,794 477,291 0 47,847 335,369 0 0 94,075 94,561
Pre-Tax
Present Worth (M U.S.$) at:
8 Percent 94,706
12 Percent 94,317
15 Percent 93,790
20 Percent 92,550
Notes:
1. Future income tax expenses were not taken into account in the preparation of these estimates.
2. The future net revenue estimated herein, discounted and undiscounted, should not be construed to represent fair market value.
3. SPF = Special Participation Fee.
4. Operating expenses and capital costs do not include the indirect taxation that may be applicable to these expenditures.
TABLE 5
PROJECTION of TOTAL PROVED RESERVES and FUTURE NET REVENUE
as of
DECEMBER 31, 2013
from the
POLVO FIELD
in
BRAZIL
with interests owned by
HRT O&G EXPLORAO e PRODUO de PETRLEO LTDA.
NI 51-101
Net Future Pre-Tax Pre-Tax
Oil Oil Gross Other Operating Capital Future Net Present Worth
Production Price Revenue Revenue Royalties Expenses Costs SPF Revenue at 10 Percent
Year (Mbbl) (U.S.$/bbl) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$)
2014 2,502 99.56 249,099 0 24,965 100,759 21,600 0 101,775 95,673
2015 2,782 99.56 276,976 0 27,768 102,302 0 0 146,906 125,008
2016 2,285 99.56 227,495 0 22,804 99,567 0 0 105,124 80,975
2017 1,446 99.56 143,964 0 14,432 94,954 0 0 34,578 24,110
2018 0 - 0 0 0 48,000 0 0 (48,000) (30,296)
2019 0 - 0 0 0 0 0 0 0 0
2020 0 - 0 0 0 0 0 0 0 0
2021 0 - 0 0 0 0 0 0 0 0
2022 0 - 0 0 0 0 0 0 0 0
2023 0 - 0 0 0 0 0 0 0 0
2024 0 - 0 0 0 0 0 0 0 0
2025 0 - 0 0 0 0 0 0 0 0
2026 0 - 0 0 0 0 0 0 0 0
2027 0 - 0 0 0 0 0 0 0 0
2028 0 - 0 0 0 0 0 0 0 0
2029 0 - 0 0 0 0 0 0 0 0
2030 0 - 0 0 0 0 0 0 0 0
2031 0 - 0 0 0 0 0 0 0 0
2032 0 - 0 0 0 0 0 0 0 0
2033 0 - 0 0 0 0 0 0 0 0
2034 0 - 0 0 0 0 0 0 0 0
2035 0 - 0 0 0 0 0 0 0 0
2036 0 - 0 0 0 0 0 0 0 0
2037 0 - 0 0 0 0 0 0 0 0
Total 9,015 897,534 0 89,969 445,582 21,600 0 340,383 295,470
Pre-Tax
Present Worth (M U.S.$) at:
8 Percent 303,934
12 Percent 287,259
15 Percent 275,411
20 Percent 256,879
Notes:
1. Future income tax expenses were not taken into account in the preparation of these estimates.
2. The future net revenue estimated herein, discounted and undiscounted, should not be construed to represent fair market value.
3. SPF = Special Participation Fee.
4. Operating expenses and capital costs do not include the indirect taxation that may be applicable to these expenditures.
TABLE 6
PROJECTION of PROVED-plus-PROBABLE RESERVES and FUTURE NET REVENUE
as of
DECEMBER 31, 2013
from the
POLVO FIELD
in
BRAZIL
with interests owned by
HRT O&G EXPLORAO e PRODUO de PETRLEO LTDA.
NI 51-101
Net Future Pre-Tax Pre-Tax
Oil Oil Gross Other Operating Capital Future Net Present Worth
Production Price Revenue Revenue Royalties Expenses Costs SPF Revenue at 10 Percent
Year (Mbbl) (U.S.$/bbl) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$)
2014 2,695 99.56 268,314 0 26,893 101,821 21,600 0 118,000 110,925
2015 4,179 99.56 416,061 0 41,714 109,987 21,600 0 242,760 206,574
2016 3,140 99.56 312,618 0 31,337 104,269 0 0 177,012 136,349
2017 2,039 99.56 203,003 0 20,354 98,216 0 0 84,433 58,872
2018 1,462 99.56 145,557 0 14,594 95,041 0 0 35,922 22,673
2019 1,106 99.56 110,113 0 11,042 93,084 0 0 5,987 3,421
2020 0 - 0 0 0 48,000 0 0 (48,000) (24,825)
2021 0 - 0 0 0 0 0 0 0 0
2022 0 - 0 0 0 0 0 0 0 0
2023 0 - 0 0 0 0 0 0 0 0
2024 0 - 0 0 0 0 0 0 0 0
2025 0 - 0 0 0 0 0 0 0 0
2026 0 - 0 0 0 0 0 0 0 0
2027 0 - 0 0 0 0 0 0 0 0
2028 0 - 0 0 0 0 0 0 0 0
2029 0 - 0 0 0 0 0 0 0 0
2030 0 - 0 0 0 0 0 0 0 0
2031 0 - 0 0 0 0 0 0 0 0
2032 0 - 0 0 0 0 0 0 0 0
2033 0 - 0 0 0 0 0 0 0 0
2034 0 - 0 0 0 0 0 0 0 0
2035 0 - 0 0 0 0 0 0 0 0
2036 0 - 0 0 0 0 0 0 0 0
2037 0 - 0 0 0 0 0 0 0 0
Total 14,621 1,455,666 0 145,934 650,418 43,200 0 616,114 513,989
Pre-Tax
Present Worth (M U.S.$) at:
8 Percent 532,848
12 Percent 495,880
15 Percent 470,081
20 Percent 430,534
Notes:
1. Probable reserves and values for probable reserves are presented as required by Canadian National Instrument 51101 and are not equivalent
to proved reserves or values for proved reserves.
2. Future income tax expenses were not taken into account in the preparation of these estimates.
3. The future net revenue estimated herein, discounted and undiscounted, should not be construed to represent fair market value.
4. SPF = Special Participation Fee.
5. Operating expenses and capital costs do not include the indirect taxation that may be applicable to these expenditures.
TABLE 7
PROJECTION of PROVED-plus-PROBABLE-plus-POSSIBLE RESERVES and FUTURE NET REVENUE
as of
DECEMBER 31, 2013
from the
POLVO FIELD
in
BRAZIL
with interests owned by
HRT O&G EXPLORAO e PRODUO de PETRLEO LTDA.
NI 51-101
Net Future Pre-Tax Pre-Tax
Oil Oil Gross Other Operating Capital Future Net Present Worth
Production Price Revenue Revenue Royalties Expenses Costs SPF Revenue at 10 Percent
Year (Mbbl) (U.S.$/bbl) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$) (M U.S.$)
2014 2,698 99.56 268,613 0 26,924 101,839 21,600 0 118,250 111,160
2015 4,809 99.56 478,784 0 52,802 113,453 21,600 2,129 288,800 245,751
2016 3,860 99.56 384,302 0 38,522 108,230 0 0 237,550 182,980
2017 2,503 99.56 249,199 0 24,983 100,767 0 0 123,449 86,077
2018 1,822 99.56 181,398 0 18,181 97,020 0 0 66,197 41,782
2019 1,415 99.56 140,877 0 14,126 94,784 0 0 31,967 18,264
2020 1,147 99.56 114,195 0 11,450 93,309 0 0 9,436 4,880
2021 0 - 0 0 0 48,000 0 0 (48,000) (22,472)
2022 0 - 0 0 0 0 0 0 0 0
2023 0 - 0 0 0 0 0 0 0 0
2024 0 - 0 0 0 0 0 0 0 0
2025 0 - 0 0 0 0 0 0 0 0
2026 0 - 0 0 0 0 0 0 0 0
2027 0 - 0 0 0 0 0 0 0 0
2028 0 - 0 0 0 0 0 0 0 0
2029 0 - 0 0 0 0 0 0 0 0
2030 0 - 0 0 0 0 0 0 0 0
2031 0 - 0 0 0 0 0 0 0 0
2032 0 - 0 0 0 0 0 0 0 0
2033 0 - 0 0 0 0 0 0 0 0
2034 0 - 0 0 0 0 0 0 0 0
2035 0 - 0 0 0 0 0 0 0 0
2036 0 - 0 0 0 0 0 0 0 0
2037 0 - 0 0 0 0 0 0 0 0
Total 18,254 1,817,368 0 186,988 757,402 43,200 2,129 827,649 668,422
Pre-Tax
Present Worth (M U.S.$) at:
8 Percent 697,163
12 Percent 641,103
15 Percent 602,645
20 Percent 544,738
Notes:
1. Probable and possible reserves and values for probable and possible reserves are presented as required by Canadian National Instrument 51101
and are not equivalent to proved reserves or values for proved reserves.
2. Values associated with possible reserves are those additional values that are less certain to be realized than those associated with probable reserves.
It is unlikely that the quantities actually recovered will equal or exceed the sum of the proved, probable, and possible reserves.
3. Future income tax expenses were not taken into account in the preparation of these estimates.
4. The future net revenue estimated herein, discounted and undiscounted, should not be construed to represent fair market value.
5. SPF = Special Participation Fee.
6. Operating expenses and capital costs do not include the indirect taxation that may be applicable to these expenditures.
FIGURE 15
PRODUCTION HISTORY
POLVO FIELD
BRAZIL
DeGolyer and MacNaughton
Texas Registered Engineering Firm F-716
December 2013
Notes:
1. Field shut down in 2011 due to FPSO tank repair.
2. Field shut down in 2012 due to production header and boiler leak repair.

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Oil Production Rate Water Production Rate