OREANDA-NEWS. August 23, 2012. OGX announces its results for the second quarter of the 2012 fiscal year. In the period, the company started production in the second well in the Tubarao Azul Field (OGX-68) and began the development in the Tubarao Martelo Field (Waikiki Complex), in the Campos Basin.

“After replacing the centrifugal submersible pump on well OGX-26, in the Tubarao Azul Field in the Campos Basin, we resumed production there and began drilling the third production well in the field, which we expect to begin operating by the end of this year. At the same time, we initiated the development of Tubarao Martelo Field and continued our exploration campaign with oil discoveries in Itacoatiara and Honolulu, also in the Campos Basin,” commented Luiz Carneiro, CEO of OGX. “In July, we made an additional delivery of approximately 800 thousand barrels of oil to Shell, bringing our total delivery for the year to 1.6 million barrels,” added Mr. Carneiro.

The obtained the license from ANP to begin drilling the first two production wells in Tubarao Martelo Field, in the Waikiki Complex. The drilling of the the first well TBMT-1 was initiated with Ocean Lexington rig and the company will soon begin to drill a second well, TBMT-2. In July, OGX received authorization from ANP to begin drilling the first injection well in the Tubarao Azul field, as well as the third production well, which has already begun.

In the Parnaiba Basin, OGX have made progress in the development of the Gaviao Real Field project, drilling 15 production wells to date. The company has also drilled two exploratory wells, OGX-22 and OGX-38, which will become production wells, bringing the total number of wells in the project to 16. With most of the equipment manufactured in Brazil and abroad already delivered and with civil and mechanical assembly well advanced, OGX has completed earthworks. Natural gas production at the Gaviao Real Field will begin in the fourth quarter of this year, with the commissioning of the GTU and the turbines of the MPX Parnaiba Thermoelectric Complex. Commercial production will start in the beginning of 2013.

“Our projects within the EBX Group are helping up develop a stronger, sustainable platform for growth. We are on schedule to deliver gas to MPX by yearend in the Parnaiba Basin with 15 producing wells drilled and more on the way. Also, the additional FPSO’s from OSX are on schedule and expected to arrive in the second semester of 2013,” concluded Mr. Carneiro.

See the company’s main numbers below:

Production in Waimea - During an Extended Well Test (EWT) in the Tubarao Azul Field that lasted approximately six months, the company tested the OGX-26 and OGX-68 wells and was able to learn more about the characteristics of the reservoir, as well as the behavior of the pressure with the application of different flow rates and the aquifer interaction.

OGX also identified the necessity of replacing the centrifugal submersible pump in OGX-26HP for a pump with different features in order to adjust the pumping capacity. In July, the company began the replacement and finished it in the first week of August. Average production in the Campos Basin in July, operating only with well OGX-68, was 7.0 kboepd and

average daily production in the second quarter was 9.1 kboepd.

Oil Sales - In March and April, the company delivered 794 thousand barrels of oil to Shell relative to the two first shipments. The oil sales revenues were booked as a reduction in CAPEX (intangible) since they occurred before the declaration of commerciality, totaling BRL  79,6 million.

Earnings Result – OGX ended the first half of 2012 with negative net earnings of BRL  543 million, most of it with no impact on cash flow, and mainly due to: (a) net financial expenses of BRL  356 million, mostly from non-cash accounting effect of foreign exchange variations; (b) accounting losses related to dry/sub-commercial wells of BRL  165 million.

Cash Position - The consolidated cash balance totaled BRL  5.9 billion on June 30, 2012, which represented a BRL  571 million increase over December 31, 2011. This increase is related to fundraising operations in 1Q12.