Market Overview

OGX - Second Quarter 2011 Results


OGX Petróleo e Gás Participações S.A. (Bovespa: OGXP3) today announced its results for the second quarter of 2011. The financial and operating data is presented on a consolidated basis in accordance with the international financial reporting standards (IFRS) issued by the International Accounting Standards Board (IASB), and in Reais, except where otherwise indicated.

"We remain focused on executing our business plan, which has advanced significantly as we have intensified our appraisal campaign and performed additional drill-stem tests, all of which are essential in converting our resources into reserves. With the recent bond issuance as well as the significant progress made in the past three months, we are not only technically but financially prepared to proceed towards production,” commented Mr. Paulo Mendonça, General Executive Officer and Exploration Officer for OGX.

From the perspective of our drilling campaign, highlights of the second quarter include the drilling of 11 appraisal wells in the Campos Basin and 2 in the Parnaíba Basin, two successful drill-stem tests performed in horizontal wells in the Campos Basin and the declaration of commerciality for two fields in the Parnaíba basin, confirming our projections and attesting to the excellent execution of our business plan. In addition, we drilled wildcat wells that continue to demonstrate the great potential of our portfolio.

With respect to the commencement of production, important steps have been achieved in the past three months including the arrival of the newly built vessel Aker Wayfarer which will be used throughout the system installation, as well as the final stage of commissioning for the FPSO OSX -1. In addition, the construction of the turret, a disconnectable buoy which is part of the OSX-1 mooring system, has been completed and is already in the mobilization process to Brazil.

Second Quarter Highlights and Subsequent Events:

  • Intensification of the appraisal campaign in Waimea (OGX-50D, OGX-53D and OGX-55HP), Waikiki (OGX-41D, OGX-44HP and OGX-45D), Pipeline (OGX-39HP, OGX-40D, OGX-42D and OGX-48D), Illimani (OGX-43D) and Fuji (OGX-54D and OGX-56D) accumulations located in the Campos Basin;
  • Declaration of commerciality for the California and Fazenda São José accumulations in the Parnaíba Basin, for which the newly designations are Gavião Azul and Gavião Real Fields;
  • Performance of drill-stem test for the first horizontal well (OGX-44HP) in the Waikiki accumulation, with excellent results;
  • Important discoveries in the Parnaíba basin through the drilling of wells OGX-38 and OGX-46D;
  • Significant discoveries in the Santos basin through the drilling of wells OGX-30 and OGX-47;
  • Performance of a drill-stem test for the first horizontal well (OGX-39HP) in the Pipeline accumulation with very good results;
  • Initiated drilling of well OGX-55HP, the second horizontal well in the Waimea accumulation;
  • Raised US$ 2.563 billion through a bond issuance; and
  • Announcement of the Company's business plan for discoveries in the Campos and Parnaíba Basins.

Campos Basin

Among the activities performed in the second quarter of 2011 in Campos Basin we can highlight the intensification of the successful appraisal campaign, the results of drill-stem tests in Waikiki and Pipeline accumulations, the drilling of wildcat wells, and the arrival and preparation of equipment for the start-up of production. On June 6, we formally announced our business plan relating to discoveries made in the basin.

During the quarter we intensified our appraisal campaign in the Waimea, Waikiki, Pipeline, Illimani and Fuji accumulations. In Waimea, we concluded the drilling of well OGX-50D encountering a hydrocarbon zone with 52 meters of net pay in the Albian section. In addition, we initiated the drilling of wells OGX-53D and OGX-55HP, which are still ongoing. In the Waikiki accumulation, we have concluded the OGX-41D, OGX-44HP and OGX-45D wells. The directional well OGX-41D found a net pay of 92 meters in the Albian section and was the pilot well for OGX-44HP, which was horizontally drilled for more than 1,000 meters in Albian-Cenomanian reservoirs. The well OGX-45D, which was intended to test the limits of the Waikiki accumulation, discovered hydrocarbons only in the Maastrichtian section, indicating an additional potential in sandstone reservoirs which extend towards the Ingá-Peró Complex. In the Pipeline accumulation, wells OGX-39HP, OGX-40D, OGX-42D and OGX-48 were drilled, identifying the presence of hydrocarbons in the Albian section with net pays of more than 1,000 (horizontal column), 107, 82 and 12 meters, respectively. In the Illimani accumulation, we have concluded well OGX-43D which confirmed the extent of the reservoirs in the Albian section and identified a net pay of 50 meters. Finally, we began the drilling of wells OGX-54D and OGX-56D in the Fuji accumulation, both of which are still in progress.

Additionally, we obtained the results of the drill-stem tests in horizontal wells OGX-39HP and OGX-44HP in the Pipeline and Waikiki accumulations, respectively. The test in well OGX-39HP, which is the first horizontal well in the Pipeline accumulation, indicated good reservoir conditions, implying a production capacity of around 10,000 barrels per day and oil of approximately 19° API. The test in well OGX-44HP identified oil of approximately 23° API and a production potential of 40,000 barrels per day, which will be limited to a flow rate of 15,000 to 20,000 barrels per day per well to optimize oil recovery from the reservoir.

Continuing with our wildcat drilling campaign, well OGX-33 was drilled in the Chimborazo accumulation and identified a net pay of 42 meters in the Albian section. We have also drilled well OGX-52 in the Tambora accumulation, which has identified a net pay of 96 meters in the Albian section and we have initiated OGX-58DP well also in this accumulation that is still ongoing.

The commencement of OGX's production is scheduled for October/November this year in the Campos Basin. The first project in the Waimea Complex will take place through an Extended Well Test (EWT) and will have an anticipated production of up to 20,000 barrels per day from well OGX-26HP.

All of the critical equipment for the start-up of production has been secured. The wet christmas tree and the electric submersible pumping system are already installed and other equipment such as flexible lines, moorings and piles (which are part of the FPSO mooring system) and the installation vessel have already been delivered. The FPSO OSX-1 is ready in the shipyard in Singapore and the turret (a buoy, part of the mooring system) is in the mobilization process to Brazil.

Below are the discoveries made and ongoing wells in the Campos Basin:

Well   Block   Prospect   Rig  

Coast Distance

  Water Depth   Net Pay   Drilling Area¹
OGX-33   BM-C-41   Chimborazo   Pride Venezuela   84 Km   127m   Albian: 42m   -
OGX-41D   BM-C-39 /   Waikiki -2 D   Ocean Lexington   90 Km   110m   Albian: 92m   2C
OGX-40D   BM-C-41   Pipeline -2 D   Sea Explorer   79 Km   130m   Albian: 107m   2C
OGX-43D   BM-C-41   Illimani -1 D   Ocean Ambassador   80 km   140 m   Albian: 50m   Delineation
OGX-44HP   BM-C-39/   Waikiki   Ocean Lexington   90 Km   110m  


OGX- 48   BM-C-41   Pipeline - 4   Ocean Ambassador   75 Km   128m   Albian: 12m   3C
OGX-42D   BM-C-41   Pipeline -3 D   Pride Venezuela   78 Km   120m  

Eocene: 6m
Albian: 82m

OGX-50D   BM-C-41   Waimea – 3 D   Sea Explorer   84 Km   131m  

Santonian: 1,7m
Albian: 52m

OGX-45D   BM-C-40   Waikiki – 3 D   Ocean Lexington   96 Km   109m   Maastrichtian: 5m   Delineation
OGX-39HP   BM-C-41  


  Ocean Star   77 Km   128m  


OGX-52   BM-C-41   Tambora   Ocean Ambassador   93Km   128m   Albian: 96m   -
Well   Block   Prospect   Rig  




  Status   Net Pay   Drilling Area¹
OGX-53D   BM-C-41   Waimea – 2D   Pride Venezuela   84Km   131m   In progress since 07/10/11       1C
OGX-54   BM-C-41   Fuji - 2   Ocean Lexington   81 Km   136m   In progress since 07/25/11       Delineation
OGX-55HP   BM-C-41   Waimea – 3HP   Sea Explorer   84 Km   131m   In progress since 07/24/11      
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