Nov. 10 (Bloomberg) -- OGX Petroleo e Gas Participacoes SA, the oil company controlled by billionaire Eike Batista, said it will drill more wells in Brazil than previously announced after it boosted potential reserve estimates.

OGX will drill 79 wells in the five years through 2013, a 55 percent increase over previous plans, Chief Financial Officer Marcelo Torres said today in a conference call with investors and analysts. The Rio de Janeiro-based company’s target for 2010 was increased to 27 wells from 19, he said.

“The revision was required, in our view, to convert our resources into reserves,” he said.

OGX said yesterday it may have potential reserves of 6.7 billion barrels of oil and equivalents, based on a 35 percent rate of success, citing research by the DeGolyer & MacNaughton consultancy. Previously, OGX said its potential reserves were estimated at 4.8 billion barrels on a 27 percent success rate.

OGX fell 92 reais, or 6.1 percent, to 1,428 reais at 3:51 p.m. in Sao Paulo trading. The shares have almost tripled this year, more than a gain of 76 percent for the Bovespa index.

“This is unlikely to be a major catalyst for the stock,” Banco BTG Pactual SA analyst Gustavo Gatass said today in a note to clients. “Investors had been aware of this potential driver for long, and if anything we believe that some had unrealistic expectations.”

Cash for Drilling

OGX has $4.5 billion in cash to finance drilling, Torres said. “We have plenty of cash,” he said.

Torres said the company continues to study opportunities to buy stakes in oil exploration blocks under concession in Brazil and also plans to participate in the next auctions to acquire new licenses.

“Certainly it is our interest to expand the quality of our portfolio,” he said.

The company doesn’t rule out forming partnerships with Petroleo Brasileiro SA, Brazil’s state-controlled oil company, to explore the pre-salt region, OGX Chief Executive Officer Paulo Mendonca said on a conference call with journalists.

“If we have to cross to the pre-salt, we will do it without any problem,” he said. “It is very preliminary to talk about it, but it is a possibility.”

The pre-salt area runs 800 kilometers (500 miles) off Brazil’s coast, holding oil deposits beneath a layer of salt resting as deep as 3,000 meters (9,843 feet) beneath the ocean surface and another 5,000 meters below the seabed. It includes Petrobras’s Tupi field, the biggest oil find in the Americas since 1976, which may hold as much as 8 billion barrels of oil.

Offshore Discoveries

OGX said Oct. 14 the BM-C-43 block, located in the Campos Basin’s shallow waters off Brazil’s southeastern coast, may hold between 500 million and 1.5 billion barrels of crude oil. The company owns all of the block.

The company earlier in October said it found signs of crude in the BM-S-29 block, in the Santos Basin off the coast of Sao Paulo state.

OGX raised 5.87 billion reais ($3.43 billion) in its June 2008 initial public offering as investors bet Batista could match Brazil’s state-controlled Petrobras’s success at finding oil.

OGX holds 22 exploratory blocks in Brazil’s Campos, Santos, Espirito Santo and Para-Maranhao basins with an offshore exploration area of 7,000 square kilometers. It also own seven onshore blocks.

To contact the reporters responsible for this story: Helder Marinho in Sao Paulo at hmarinho@bloomberg.net

Last Updated: November 10, 2009 14:46 EST