UPDATE: Brazil Oil Startup HRT Plans To Sell 1.63 Million Shares In IPO

Brazilian oil startup HRT Participacoes em Petroleo SA plans to sell 1.63 million shares in an initial public offering later this month, according to a prospectus released Thursday.

HRT, which was created by local oilfield consultants group HRT Petroleum in 2009, plans to sell 1.62 million in new shares and 10,236 shares from current shareholders in the offer, the company said. Additional and supplemental lots of 567,000 shares could also be sold.

If all the shares are sold, the sale could raise up to 2.97 billion Brazilian reals ($1.76 billion) for HRT, which received initial funding of $275 million in a private placement when founded in 2009. HRT pegged price guidance at between BRL1,050.00 and BRL1,350.00 per share, HRT said. The shares will be priced Oct. 21, with trading expected to start Oct. 25 on the Sao Paulo Stock Exchange, or Bovespa, under the ticker symbol HRTP3.

The share sale is the latest in a string of opportunities for investors to jump into Brazil's booming oil sector, which has generated global interest since massive oilfields were discovered off Brazil's coast.

Last month, state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, raised about $70 billion in the world's largest-ever share sale. The Brazilian unit of Spain's Repsol YPF (REP, REP.MC), which was expected to launch an IPO later this year, sold a 40% stake in its Brazilian assets to China's Sinopec for $7.1 billion.

Karoon Gas Australia (KRNGY, KAR.AU) is also planning an IPO for its Brazilian unit, Karoon Petroleo & Gas.

Brazilian billionaire businessman Eike Batista kicked off the oil startup wave in June 2008, when his OGX Petroleo e Gas Participacoes SA (OGXPY, OGXP3.BR) raised BRL6.71 billion in what was then Brazil's largest IPO. OGX plans to produce its first oil in the middle of 2011.

HRT holds operator stakes in 21 blocks in the Solimoes Basin in Brazil's Amazonas state. The blocks contain potential reserves of between 4 billion and 6 billion barrels of light oil and between 10 trillion and 20 trillion cubic feet of natural gas, according to company officials.

In addition, in May HRT gained the rights to explore three offshore blocks in Namibia.

HRT will operate Orange Basin blocks 2813A, 2814B and 2914A with a 40% stake. Universal Power Corp. will have a 40% share, and Acarus Investments the remaining 20%.

-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; jeff.fick@dowjones.com

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