OGX, the Brazilian oil and gas company responsible for the largest private-sector exploratory campaign in Brazil, announces its results for the first quarter of 2012. The company has also presented to the National Petroleum, Natural Gas and Biofuels Agency (ANP) a Declaration of Commerciality of a portion of the Waimea Complex, for which the proposed new designation is Tubarao Azul Field, in block BM-C-41, in the shallow waters of the Campos Basin. OGX holds a 100% interest in this block. This is the second declaration of commerciality of an area in the Campos Basin announced by the company.
This declaration of commerciality presented to the ANP, of a portion of the Waimea Complex (1st production module) occurred after assessing the results gathered so far of the Extended Well Test (EWT), conducted through the OGX-26HP well, which has been confirming excellent permoporosity reservoir characteristics and leading to a better specification and elaboration of the Development Plan (DP) of this area. The Development Plan, which will be submitted to the ANP, estimates a total recoverable volume of 110 million barrels of oil from Tubar?o Azul Field over the concession period’s production phase.
“This important step will allow us to connect the second well and intensify production by the FPSO OSX-1 making our operations in this area even more profitable given the higher cash flow generation and dilution of operating costs", commented Paulo Mendonça, CEO of OGX.
First quarter results
“This quarter was extremely important for OGX, as we began production in the Campos Basin, made our first shipment to Shell and announced significant discoveries in the Campos and Santos basins, ” said Paulo Mendonça, CEO of OGX. “In addition, we made significant advances in our business plan which included an order for two new WHPs, the declarations of commerciality of the Waikiki accumulation and of a portion of the Waimea Complex, to be named the Tubar?o Martelo Field and Tubarao Azul Field, respectively, and secured additional funding that solidified our cash position,” added Mr. Mendonça.
Waimea Production - Waimea’s EWT, which showed flow rate variations at well OGX-26HP, confirmed the reservoir’s excellent productivity, as well as the strong performance of the artificial elevation equipment and the plant in general. In addition, the EWT provided important information on the reservoir that was critical in establishing the optimum production flow rate without injecting water into the reservoir.
In February and March, we achieved average daily production levels of 11.6 kboepd and 10.4 kboepd, respectively, with an average operational efficiency of 97% at the production plant, which will help us to better develop future projects.
At the end of March, we delivered the first Waimea oil shipment of 1.2 million barrels as part of our sale to Shell. The first shipment, sold at the average Brent price less US$5.50 per barrel, marks the beginning of our cash generation and represents an important step for OGX in its evolution as an important global E&P player. We will continue to analyze the most attractive opportunities for the commercial sale of our oil and plan to announce new partnerships soon.
Financial Results - We closed 1Q12 with a net loss of R$144.8 million, reflecting the Company’s pre-operational status. This result is due to: (i) intensification of the exploration campaign with expenses amounting to R$109.1 million; (ii) general and administrative expenses including personnel expenses, in the amount of R$92.9 million; partially offset by (iii) the positive deferred income tax and social contribution of R$38.7 million; and (iv) a positive net financial result of R$18.5 million.
Cash - The consolidated cash balance totaled R$ 6.6 billion on March 31, 2012, which represented a R$1.2 billion increase over the previous quarter.
