OREANDA-NEWS. August 16, 2011. The company closes the first semester with investments of BRL  1.3 billion in its activities in Brazil and cash position of USD  4.5 bilhoes

OGX, an oil and gas company which is part of the EBX Group, owned by entrepreneur Eike Batista, closed the first semester of 2011 with investments of BRL  1.3 billion in its exploration and production (E&P) activities in Brazil. Since 2007, when the Company was formed, it has invested more than BRL  5.9 billion in E&P in Brazil. The company is responsible for the largest exploratory campaign in Brazil, with nine drilling rigs chartered and more than 6,000 professionals involved, including outsourced personnel.

The company ended the second quarter of 2011 with a solid cash position of USD  4.5 bilhoes and raised USD  2.563 billion through a bond issuance on June, the largest high yield issuance ever made in the Oil & Gas industry.

From the perspective of OGX’s drilling campaign, highlights of the second quarter include the drilling of 11 appraisal wells in the Campos Basin and 2 in the Parnaiba Basin; two successful drill?stem tests performed in two horizontal wells in the Pipeline and Waikiki accumulations, in the Campos Basin, both with excellent results; and the declaration of commerciality for two natural gas fields in the Parnaiba Basin, confirming the great potential of this area.

"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 Mendonca, General Executive Officer and Exploration Officer for OGX.

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. 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.

The Company expects important events to occur in the coming months, including: (i) the arrival of FPSO OSX?1 and start of production in the Waimea accumulation in October/November 2011, through an extended well test, (ii) continuation of the intensive appraisal campaign, mainly in the Campos Basin, (iii) start of exploratory campaigns in the Espirito Santo and Para?Maranhao Basins in the second half of the year, (iv) results of drill?stem tests in horizontal wells which will become production wells, (v) acquisition of seismic data for our blocks located in the Lower Magdalena Valley Basin, Colombia, and (vi) continuation of the appraisal campaign in the Parnaiba Basin.

Financial Performance - The net loss for the second quarter of 2011 was approximately BRL  108.8 million, which was the result of the higher personnel and office costs as well as other expenses necessary to manage the operations of the Company and its subsidiaries.