Breaking News

Tweet TWEET

2012 Fourth Quarter and Full-Year Results

  2012 Fourth Quarter and Full-Year Results

Business Wire

RIO DE JANEIRO -- March 27, 2013

OGX Petróleo e Gás Participações S.A. (Bovespa: OGXP3), Brazil’s largest
private oil and natural gas exploration company, announces its fourth quarter
and full year results for 2012.

GTU plant view

GTU plant view


Key Financial Metrics                    4Q 2012     2012
Revenues (R$ mm) ¹                       175         325
EBITDA – Pro forma (R$ mm)               (38)        (343)
Net Profit (Loss) (R$ mm)                (286)       (1,173)
Realized oil price per barrel (US$)¹     104         99
CAPEX (R$ mm)                            (1,150)     (4,336)
Cash Position (US$ mm)                   1,655       1,655
Production volume (kboepd)               10.2        9.8 ²


Notes:
  Refers to the cargos booked as revenues after the Extended Well Test (EWT)
¹ conclusion and the Declaration of

  Commerciality for the Tubarão Azul Field
² Production volume from January 31, 2012 to December 31, 2012
  

Luiz Carneiro, Chief Executive Officer of OGX, commented:

“2012 was a year of both significant achievements and major challenges for
OGX. Only four years after its creation, OGX hit a historical milestone in
2012 as it initiated oil production in the Tubarão Azul Field, in the Campos
basin. Over the course of the year, we achieved total delivery of 2.4 million
barrels from Tubarão Azul, posting revenues for the first time of R$325
million. Building on this in early 2013, we continue to develop with great
efficiency the Tubarão Martelo Field, also in the Campos Basin, where we have
already drilled and made the lower completion of six production wells, and we
also began commercial gas production in the Gavião Real Field, in the Parnaíba
Basin, in January 2013.

Alongside these great successes, OGX faced some important challenges.
Production levels in the first two producing wells in Tubarão Azul (OGX-26HP
and OGX-68HP) stabilized in 2012 at a rate of 5,000 barrels of oil equivalent
per day. In January 2013, we connected our third production well in Tubarão
Azul, TBAZ-1HP. After roughly three months of production, TBAZ-1HP has not
stabilized yet, while the first two wells are jointly producing slightly below
an average of 10,000 barrels of oil equivalent per day. We remain absolutely
focused on optimizing the total recoverable volume of the field in accordance
with industry best practices, but also acknowledge that our estimated volume
of recoverable barrels in the field should be reduced.

In parallel to the development of our fields, we made further advances in our
exploration campaign, resulting in important oil discoveries such as Tulum and
Viedma, also in the Campos Basin. We recently declared three more fields
commercial: Tubarão Tigre and Tubarão Gato in the Pipeline accumulation and
Tubarão Areia in the Fuji-Illimani accumulation, and we continue our studies
on how to best develop them. We also submitted new Discovery Evaluation Plans
(PAD) for other accumulations in the Campos and Santos basins, aiming to
retain these areas for additional studies and analysis. In our onshore
activities, we declared commercial the Bom Jesus accumulation (Gavião Branco
Field), in the Parnaíba Basin. Furthermore, we acquired a stake in Block BS-4,
in Santos Basin, demonstrating our awareness of accretive business
opportunities in Brazil, which we believe will contribute to the growth of our
portfolio in the near future.

With a strong portfolio of assets, planned capex of US$1.3 billion in 2013, a
team of experienced and energetic professionals and opportunities to reshuffle
our base through asset divestment, acquisition of new assets and strong
partnerships, OGX is fully prepared to address the challenges ahead as we
continue to develop our business."

OPERATIONAL HIGHLIGHTS

Production:

OGX’s production activities are progressing:

  *Attained total production volume of 3.2 million barrels of oil in the
    Tubarão Azul Field (Campos Basin) in 2012 (907 thousand barrels of oil in
    4Q12, 9.6% higher than the previous quarter)
  *Sale of 2.4 million barrels of oil in 2012, distributed in four different
    cargos
  *Sale of 1.2 million barrels of oil in 2013, distributed in two cargos
  *Third production well in the Tubarão Azul Field (Campos Basin), TBAZ-1HP,
    was connected to FPSO OSX-1 and commenced production on January 4, 2013
  *Drilled and made the lower completion of six production wells in the
    Tubarão Martelo Field (Campos Basin). The first well is projected to come
    on-stream late 2013 after the arrival of FPSO OSX-3
  *Final stage of reservoir engineering for FPSO OSX-2 installation, with
    delivery scheduled for 2H13
  *Concluded the drilling and completion of all 16 production wells planned
    for the Gavião Real Field (Parnaíba Basin), which are now in the process
    of connecting to the Gas Treatment Unit (GTU)
  *Achieved first gas production at the end of November 2012 with the
    commissioning of the Gas Treatment Unit (GTU) in the Gavião Real Field
  *Average net gas production of 3.2 kboepd and 5.5 kboepd in January and
    February 2013, respectively, in the Gavião Real Field

Exploration:

OGX continued its successful exploratory campaign in the fourth quarter.

  *Presented Declaration of Commerciality for the Pipeline, Fuji and Illimani
    accumulations to the National Petroleum, Natural Gas and Biofuels Agency
    (ANP). The fields will be named Tubarão Gato, Tubarão Tigre and Tubarão
    Areia, with total estimated volume of oil in place of 823 million barrels
    of oil (P50)
  *Presented Declaration of Commerciality for the Gavião Branco Field
    (formerly the Bom Jesus accumulation) to the ANP. OGX estimates a total
    volume in place between 0.2 and 0.5 Tcf of gas for this field
  *Submission of Discovery Evaluation Plans (PADs) to the ANP for Vesúvio,
    Viedma, Tulum and Itacoatiara accumulations in the Campos Basin and for
    Curitiba, Belém and Natal accumulations in the Santos Basin
  *Submitted the winning bid for a block in the Lower Magdalena Valley Basin
    upon participating in Colombia’s National Agency of Hydrocarbonates (ANH)
    auction
  *Obtained Operator A qualification from the ANP, allowing OGX to operate
    blocks in deep waters and ultra-deep waters, in addition to shallow waters
    and onshore

Other:

  *Agreement with Petrobras to acquire a 40% participating interest in Block
    BS-4, located in the Santos Basin in November 2012
  *Eike Batista, controlling shareholder of OGX, granted the Company in
    October 2012 an option to require him to purchase up to US$1.0 billion of
    new common shares of OGX at a price of R$6.30 per share, conditional upon
    the Company’s additional capital requirement and the absence of more
    favorable alternatives
  *Issuance of Senior Unsecured Notes with a ten year term for US$1.063
    billion in March 2012
  *Secured R$600 million bridge loan through its subsidiary OGX Maranhão for
    the development of the Gavião Real and Gavião Azul fields in January 2012
  *New senior management team with extensive experience put in place under
    Luiz Carneiro, who joined OGX in June, 2012, as the company turns the
    corner from explorer to producer

SHORT TERM OUTLOOK

Drilling of exploratory wells and current field development

With the end of the exploration concession periods for the Campos and Santos
Basins, the Company aims to obtain an extension for the areas which we believe
have great potential.

The following table provides details of the areas which we have declared
commercial (the Pipeline, Fuji and Illimani accumulations), as well as those
for which we have submitted PADs (Vesúvio, Viedma, Tulum and Itacoatiara
accumulations in the Campos Basin, and Curitiba, Belém and Natal accumulations
in the Santos Basin):


Declarations of Commerciality – Campos Basin
                                          Total estimated volume of oil
Field           Accumulation      Block(s)       in place (mmboe)
                                          P90       P50      P10
Tubarão       Pipeline        BM-C-41     314       461      675
Tigre
Tubarão       Pipeline        BM-C-41     50        71       101
Gato
Tubarão       Fuji/Illimani   BM-C-41     157       291      563
Areia
                                  Total         521       823      1,339


PADs – Campos Basin
Accumulation         Block(s)       Commitment               Deadline
                        BM-C-43,          - 1 appraisal well
                        BM-C-42,
Vesúvio                             - Seismic                2H13
                        BM-C-41 and       reprocessing
                        BM-C-38
                        BM-C-41,
Viedma^1             BM-C-38 and    - 1 appraisal well       2H13

                        BM-C-37
Tulum^1              BM-C-37 and    - 1 appraisal well       2H13
                        BM-C-38
Itacoatiara^1        BM-C-39        - Additional             2H13
                                          geophysics studies
Peró/Ingá            BM-C-40        - Seismic                1H13
                                          reprocessing
Tambora/Tupungato    BM-C-41        - Seismic                1H13
                                          reprocessing


PADs – Santos Basin
Accumulation    Block(s)    Commitment                      Deadline
Natal^1         BM-S-59     - Seismic reprocessing          1H13
Curitiba^1      BM-S-58     - Drill-Stem test (OGX-94DA)    2H13
Belém           BM-S-56     - Drill-Stem test (OGX-17)      2H13


Notes:
¹Pending PAD approval from ANP


In addition to the areas in the Campos and Santos Basins comprised in the
submitted PADs, OGX will also:

  *Drill two prospects in the Espírito Santo Basin in 2013, together with
    Perenco, the operator of the blocks, and ten wells in the Parnaíba Basin
  *Continue to develop the Tubarão Martelo field preparing for OSX-3’s
    arrival and conclude studies for OSX-2’s development area
  *Start drilling the first development well in the Atlanta Field (BS-4
    Block) in 2H13 using Ocean Star rig from OGX fleet

Capex

After acquiring a stake in Block BS-4, we revised our 2013 capex budget from
US$1.2 billion to US$1.3 billion to account for the development of the
post-salt field, Atlanta, which is scheduled to commence with the drilling of
the first production well in the second half of the year. As the Company
gradually reaches the end of its exploration campaign in the Campos and Santos
basins, we are downsizing our rig fleet, which reflects a reduction of our
2013 capex, compared with the previous year.

Upcoming Events

OGX has several important events planned for the coming months, including:

  *Ramp up gas production with the synchronization of the fourth TPP turbine
    in the Parnaíba Basin
  *Commence the execution of the PADs by drilling appraisal wells and
    performing tests in the Campos and Santos basins
  *Continue the exploration and wildcat campaigns in the Parnaíba and
    Espírito Santo basins
  *Update our resource evaluation report
  *Receive the FPSOs OSX-2 and OSX-3 expected to arrive in the 3Q13 and first
    production wells expected to come on-stream by the end of the year

OPERATIONS REVIEW

PRODUCTION

CAMPOS BASIN

  *Total production volume of 3.2 million boe in the Tubarão Azul Field in
    2012 (907 thousands boe in 4Q12, 9.6% higher than the previous quarter)
  *Sale of 2.4 million barrels of oil in 2012, distributed in four cargos

       *547 thousand barrels of oil to Shell, in March 2012
       *247 thousand barrels of oil to Shell, in April 2012
       *790 thousand barrels of oil to Shell, in July 2012
       *809 thousand barrels of oil to Reliance, in October 2012

  *Sale of 1.2 million barrels of oil in 2013, distributed in two cargos

       *779 thousand barrels of oil to ENAP, in January 2013
       *425 thousand barrels of oil to BP, in February 2013

  *Connection start-up of the third production well in the Tubarão Azul
    Field, TBAZ-1HP
  *Drilling and lower completion of six production wells in the Tubarão
    Martelo Field
  *Final stage of reservoir engineering for FPSO OSX-2 installation, with
    delivery scheduled for 3Q13

Tubarão Azul Field Development

Since commencing production on January 31 2012, the Tubarão Azul Field has
produced more than 3.9 million barrels of oil and delivered six shipments.
Average daily production in the thirteen months of production from January 31,
2012 to February 28, 2013 was 10.2 kboepd, and, in the fourth quarter, average
daily production in the first two production wells, OGX-26HP and OGX-68HP, was
10.2 kboepd, in line with expectations and with stable flows rates of above
5.0 kboepd on average per well.

After the first three months of operation, TBAZ-1HP well, the third well
connected to FPSO OSX-1, has not stabilized yet, while the first two wells are
jointly producing at an average of approximately 10,000 barrels of oil
equivalent per day, showing no interference from the TBAZ-1HP well. Based on
this result, we believe that the area where TBAZ-1HP is producing demonstrates
a higher geological compartmentalization reflected in a lower flow rate
compared to the other section of the reservoir. OGX’s technical team is
analyzing the reservoir behavior with the data obtained on the TBAZ-1HP’s area
to define the next steps on the development of this field.

The Company continues to seek best industry practices in order to optimize the
total recoverable volume of the field.

In 2012, we produced 3.2 million barrels of oil and delivered 2.4 million
barrels of oil, distributed in four different cargos, with the last shipment
of approximately 809 thousand barrels delivered on October 15, 2012 to
Reliance Industries Ltd., one of the world's largest refineries and India's
largest private company, resulting in sales revenues of R$175 million in 4Q12.

During 2013, we delivered the fifth and the sixth shipments of approximately
779 thousand barrels and 425 thousand barrels, respectively, the first to ENAP
(Chile) on January 5, and the last to BP on February 7.

The table below shows the pro-forma OSX-1 EBITDA after the delivery of the six
shipments. The table demonstrates that OGX has succeeded in improving its
pro-forma EBITDA margin while reducing logistics costs:


Delivered       2012                                                                     2013
cargos
                    1st ¹        2nd ¹       3rd          4th          Total 2012      5th         6th         Overall
                                                                                                                           Total
Delivery            03/28/2012     4/21/2012     07/26/2012     10/15/2012                     5/1/2013      7/2/2013
Date
Operation           51 days        27 days       98 days        80 days                        73 days       39 days
Period
                                                                                                                           
Production
related to
the             547,376     246,809    789,774     809,495     2,393,454    779,110    425,313    3,597,877 
shipments -
in barrels
(bbls)
                                                                                                                           
R$ ('000)
Sales               118,003        55,996        150,686        174,707        499,392         165,000       89,634        754,026
Revenues
                                                                                                                           
Sales Taxes     -           -          -           -           -            -          -          -         
Royalties       (10,687  )   (4,938  )   (14,842  )   (15,772  )   (46,239   )   (15,351 )   (8,685  )   (70,275   )
Leasing         (24,078  )   (13,222 )   (52,708  )   (41,998  )   (132,006  )   (39,116 )   (20,868 )   (191,990  )
OSX             (13,944  )   (7,236  )   (28,071  )   (22,499  )   (71,750   )   (25,194 )   (12,471 )   (109,415  )
Services
Logistics       (12,005  )   (7,410  )   (27,795  )   (18,405  )   (65,615   )   (8,355  )   (4,310  )   (78,280   )
Freight
cost on         -           -          -           (5,831   )   (5,831    )   (3,877  )   (1,577  )   (11,285   )
sales
Others          (871     )   36         (1,183   )   (1,529   )   (3,547    )   (2,394  )   (1,200  )   (7,141    )
                                                                                                                           
EBITDA              56,418         23,226        26,087         68,673         174,404         70,713        40,523        285,640
                                                                                                                           
% EBITDA /          47.81    %     41.48   %     17.31    %     39.31    %     34.92     %     42.86   %     45.21   %     37.88     %
Revenues
EBITDA /
barrel -        103.07      94.11      33.03       84.83       72.87        90.76      95.28      79.39     
(R$/barrel)


Note:
¹Sales occurred during the Extended Well Test and before the declaration of
commerciality - not accounted in Results and recorded as a reduction of

"Fixed Assets"


As shown in the table above, since the delivery of the fourth cargo to
Reliance, we were able to resume and improve our pro-forma EBITDA margin,
mainly as a result of higher and stabilized production in the first two wells
and a better realized oil price.

The following table demonstrates the effective daily rates (in USD) of each of
the costs associated with the FPSO OSX-1 operation, related to the operation
period in each of the delivered cargos:


Daily
Cost (USD     2012                                                 2013
'000)
                  1st        2nd        3rd        4th        Avg.       5th        6th        Overall
                  cargo    cargo    cargo    cargo    2012       cargo    cargo   
                                                                                               Average
                                                                     
Leasing       (268 )   (262 )   (268 )   (259 )   (264 )   (263 )   (263 )   (264  )
OSX           (155 )   (143 )   (143 )   (139 )   (145 )   (169 )   (157 )   (151  )
Services
Logistics     (134 )   (147 )   (141 )   (113 )   (134 )   (56  )   (54  )   (108  )
Others        (10  )   1       (6   )   (9   )   (6   )   (16  )   (15  )   (9    )
                                                                     
Total         (567 )   (551 )   (557 )   (520 )   (549 )   (504 )   (489 )   (531  )


As demonstrated in the table immediately above, the daily logistics cost has
been reduced mainly as a result of lower diesel consumption in FPSO OSX-1 as
the gas produced there is being used as energy in the platform.

The OSX Services (O&M costs), however, showed a slight increase in 2013 due to
rental expenses related to the Centrifugal Submersible Pump (CSP) used on the
TBAZ-1HP well.

Tubarão Martelo Field Development

Following the declaration of commerciality of the field and OGX’s submission
of a Development Plan, the ANP granted the Company authorization to begin
drilling the production wells in this field. OGX already drilled and made the
lower completion of six horizontal production wells (TBMT-2HP, TBMT-4HP,
TBMT-6HP, OGX-44HP, TBMT-8H and TBMT-10H). FPSO OSX-3 is scheduled to arrive
by 3Q13 and its first production well is expected to come on-stream by 4Q13.

PARNAÍBA BASIN

  *Revenue generation commenced in January 2013, starting with gas dispatch
    for the synchronization of the first Parnaíba I Thermo Power Plant (TPP)
    turbine
  *Achieved first gas production at the end of November 2012, with the
    commissioning of the Gas Treatment Unit (GTU)
  *Average net gas production of 3.2 kboepd and 5.5 kboepd in January and
    February, respectively
  *Received all necessary licenses to begin natural gas production
  *Concluded the drilling and completion of all 16 production wells planned
    for the project
  *Secured R$600 million bridge loan through its subsidiary OGX Maranhão for
    the development of the Gavião Real and Gavião Azul fields in January, 2012

Gavião Real and Gavião Azul Field Development

In 2012, we had a number of significant achievements in the Parnaíba Basin.
OGX began natural gas production in the Gavião Real Field during the
commissioning of the GTU in November 2012, hence, becoming the first company
to develop a gas production project in this basin. We also started gas
dispatch for the synchronization of the first Parnaíba I TPP turbine in
January 2013, marking the integration of natural gas production with power
generation and initiating the project’s revenue generation.

In a 12-day production period in January and with only one turbine operating,
we registered an average net gas production of 3.2 kboepd (0.5 M m³/d), while
in February, operating with 2 turbines since February 9^th, we registered an
average net gas production of 5.5 kboepd (0.9 M m³/d). The third turbine was
synchronized with the system on March 16, 2013.

During 2012, we accelerated the project’s implementation, concluding the
construction of the plant and most of the facilities for the GTU operation. We
also obtained all necessary licenses (preliminary, installation and operation)
authorizing the commencement of natural gas production in the Gavião Real and
Gavião Azul fields.

The GTU commissioning was initiated at the end of November 2012, and lasted
approximately two months. Performance was in-line with our expectations. In
addition, the drilling and completion of all 16 production wells planned for
this phase of the project have been concluded, and the wells which are not yet
producing are in the process of connection to the GTU. We also concluded the
drilling of the water disposal wells, GVR-15D and GVR-16D, which will be
completed soon.

The table below shows the pro-forma GTU EBITDA after the first two months of
operations. The EBITDA margin of approximately 73% reflects the asset’s
profitability, still leaving space for margin increase with the full ramp-up
of our production with the final commissioning of the two remaining turbines.


GTU Parnaíba                            Jan-13     Feb-13     Total
                                                                      
Operation Period¹                           6 days       31 days
                                                                      
OGX Maranhão gas production - in        3.62      35.42     39.04  
Mm3
                                                                      
R$ ('000)
Revenues²                                   4,259        18,504       22,763
                                                                      
Sales Taxes³                            (433   )   (2,088 )   (2,521 )
O&M                                     (1,089 )   (1,246 )   (2,335 )
Royalties & Landowners' right           (272   )   (1,038 )   (1,310 )
                                                                      
EBITDA                                      2,465        14,132       16,597
                                                                      
% EBITDA / Revenue                          57.88  %     76.37  %     72.91  %
EBITDA / Mm3 - (R$/Mm3)                 681.71    398.97    425.16 


Notes:
¹ Closing date for accounting numbers: 25^th day of the month
² Gross revenue composed by gas sales revenue and GTU rental revenue
³ Sales taxes composed by: PIS/COFINS/ICMS


EXPLORATION

CAMPOS BASIN

In 2012, we concentrated our exploration efforts on completing the assessment
of the Waimea, Waikiki and Pipeline complexes. Simultaneously, we drilled new
prospects, focusing on the BM-C-37 and BM-C-38 blocks, thus far relatively
unexplored areas.

Significant progress was made in this basin, resulting in the Declarations of
Commerciality of the Pipeline, Fuji and Illimani accumulations, for which the
proposed names are Tubarão Tigre, Tubarão Gato and Tubarão Areia fields. OGX
estimates a total volume of oil in place of 823 million barrels (P50) for the
three fields. Following the submission of the Declaration of Commerciality, we
will submit the fields’ Development Plans.

During the fourth quarter, the main focus of OGX’s exploratory campaign was
drilling in the BM-C-37 and BM-C-38 blocks, once we received the environmental
license in October 2012. With two rigs drilling wildcat wells simultaneously,
we concluded the Viedma, Cozumel, Tulum and Cancun prospects. Important
discoveries of oil in sandstone reservoirs were made in the Viedma and Tulum
prospects, which motivated us to submit PADs to the ANP to continue the
assessment of the area’s potential. However, we have not identified the
presence of hydrocarbons in Cozumel or Cancun.

Furthermore, we have received from the ANP the approval of the PADs for the
Vesuvio, Krakatoa and Honolulu areas, allowing OGX to extend the exploration
period for these accumulations. In the meantime, we submitted PADs to the ANP
for the Viedma, Tulum and Itacoatiara areas, and are now waiting for the
approval for additional time.

For Viedma, we recently received the approval to drill the first appraisal
well committed in the PAD and have just commenced drilling in the beginning of
March (OGX-109).

PARNAÍBA BASIN

During 2012 we continued to advance our exploration campaign in the region as
we pursued new areas. We have drilled 13 wells in this basin, nine of which
were wildcat wells. We discovered gas in four new areas: Fazenda Axixá
(OGX-77), Fazenda São Francisco (OGX-82), Basílios (OGX-97) and
Esperantinópolis (OGX-102). We currently have two rigs focused on drilling
exploratory wells.

We initiated the drilling of four new wells in 2013: three wildcats: OGX-105,
Rocha Lima prospect, a dry well; OGX-107, Fazenda Chicote prospect where we
notified gas discovery; and OGX-110, São Raimundo prospect, also with gas
discovery. Besides, we commenced the drilling of a wildcat adjacent to the
OGX-88 (Bom Jesus) discovery, denominated as Fazenda Santa Isabel (OGX-108),
also with gas discovery.

After drilling and discovering gas in four exploratory wells in the Bom Jesus
accumulation, we presented to the ANP the Declaration of Commerciality for the
area in January, 2013. The Bom Jesus accumulation will be named the Gavião
Branco Field and the field’s Development Plan will be submitted to the ANP
soon. OGX estimates a total volume in place between 0.2 and 0.5 Tcf of gas for
this field.

In February 2013, we notified to the ANP a gas discovery in the Fazenda
Chicote prospect (OGX-107), in which approximately 66 net pay meters of gas
were identified in the Poti Formation (Devonian section). In March 2013, OGX
performed a drill-stem test in the well OGX-107 and obtained a gas flow rate
of 3.2 million cubic meters per day in Absolute Open Flow (AOF). The test also
confirmed a low gas condensate ratio (GCR), indicating dry gas and
demonstrating the similarity of these results with the previous tests carried
out in the Gavião Real and Gavião Branco fields, allowing us to continue
drilling appraisal wells in this area. This well is located approximately 20
km from the Gavião Branco Field, and is approximately 50 km away from the
Gavião Real Field.

SANTOS BASIN

In 2012, we achieved conclusive results through our exploratory campaign in
the Santos Basin after analyzing the full set of data gathered from our
discoveries and tests which led us to submit to the ANP PADs for the Curitiba,
Belém and Natal accumulations. The PADs should enable us to extend the
exploration period for additional tests and eventual new appraisal wells which
will enhance our understanding of the economic viability of the projects. The
Company will perform drill-stem test in the Curitiba accumulation in the
coming months.

At the same time, although we have confirmed and reported to the ANP
microbiolite limestone with presence of gas and light oil on the OGX-85 well
(Fortaleza accumulation), the Company decided not to continue its development
and returned the BM-S-57 block to the ANP. In September 2012, the Company also
returned the BM-S-29 block to the ANP.

In November 2012, as part of our continuing process of portfolio management,
we acquired Petrobras’ 40% participating interest in Block BS-4, located in
the Santos Basin. The BS-4 block encompasses two post-salt oil fields known as
Atlanta and Oliva, located 185 kilometers off the Brazilian coast at a water
depth of approximately 1,500 meters, with oil quality from 14º to 16º API. The
consortium is formed by Queiroz Galvão Exploração e Produção SA, which holds
the operatorship and a 30% participating interest, and Barra Energia do Brasil
Petróleo e Gás Ltda., which also holds a 30% participating interest. In
January 2013, the consortium received ANP approval for its Development Plan
for the Atlanta Field and the first production well is expected for the second
half of 2013 using Ocean Star rig, from our current fleet.

ESPÍRITO SANTO BASIN

We plan to resume our exploratory campaign in the coming months together with
Perenco, our partner and operator of the blocks. We will commence drilling one
exploration well in each block, BM-ES-39 and BM-ES-40, both of which are
considered new and promising areas for oil and natural gas.

In March 2013, OGX decided to return the BM-ES-37 block to the ANP, in which
OGX had a 50% stake. In October 2012, the Company also returned the BM-ES-38
block to the ANP.

COLOMBIA

In 2012, OGX finalized the acquisition of 2D and 3D seismic data in the VIM-5
block and also initiated the 3D seismic processing. In October 2012, we
participated in Colombia’s 2012 ANH Round, and submitted the winning bid for
another block in the Lower Magdalena Valley Basin, VIM-19, approved by ANH.

OTHER OGX HIGHLIGHTS

Exploration and Development Equipment

In accordance with our plan to gradually return our drilling rigs as a part of
our transition to a production-focused campaign in the Campos and Santos
basins, in February 2013, we returned the Ocean Lexington rig upon completion
of the drilling of the Tulum well and the expiration of our contract with
Diamond Offshore. We also returned the Ocean Ambassador rig in September 2012.

Going forward, we expect to share one of our rigs with Perenco during 2013
(OGX 50%/Perenco 50%) and with QGEP (OGX 40%/Consortium 60%) for the
development of Atlanta field.

Our rig count between 2013 and 2015 is projected to be:


Year                               2013    2014    2015
Average number of rigs in fleet    3.2     2.4     1.4


Operator A Qualification

In October 2012, OGX obtained Operator A qualification from the ANP, allowing
the Company to operate blocks located in deepwaters and ultra-deepwaters, in
addition to shallow waters and onshore, where Operator B already operates.

Controlling Shareholder Put Option

In October 24, 2012, OGX’s controlling shareholder, Eike Batista, granted the
Company the right to demand his subscription of up to US$1.0 billion new
common shares of OGX at a price of R$6.30 per share (the “Option”). The
Option, which expires after April 30, 2014, is conditional upon the Company’s
additional capital requirement and the absence of more favorable alternatives,
which will be determined by the majority of the independent board members on
the Company´s Board of Directors.

The option reflects Mr. Batista’s confidence in the technical expertise and
quality assets of the Company, as well as the new opportunities that the oil
and gas industry offer to OGX.

People Management

At the end of 2012, OGX had 381 employees and 6,481 third party service
providers responsible for conducting all administrative, exploration and oil
and gas production activities, up approximately 13% from the previous year. In
addition to our strategy of contracting internationally respected suppliers to
conduct operating activities, we maintain a high-performance, streamlined
structure focused on managerial excellence and with broad experience in the
oil and gas sector.

FINANCIALS

The financial and operational data below is presented on a consolidated basis,
in accordance with the International Financial Reporting Standards (IRFS)
issued by the International Accounting Standards Board – IASB and, in reais
(R$), except where otherwise indicated.

Sales Revenues

The Company’s sales in 2012 totaled R$499 million. Of this total, R$174
million corresponded to the shipments sold during the EWT phase and R$325
million earned after the conclusion of the EWT and the Declaration of
Commerciality for the Tubarão Azul Field with the sale of two shipments of
approximately 1,600 thousand barrels booked as sales revenue.

Net Income

We ended 2012 with net losses of R$1.2 billion, largely without an impact on
cash (R$762 million). This result is chiefly due to expenses of R$691 million
relative to dry wells and sub-commercial areas and foreign exchange variation
expenses of R$364 million.

Cash Spending

OGX spent US$611 million in the fourth quarter. Compared to the previous
quarter, the Company’s expenditure increased slightly, in particular due to
the development in the Tubarão Azul and Tubarão Martelo fields. The
exploration expenses rationalization process that the Company has begun should
have a higher impact on our 2013 first quarter earnings results.

Cash Position

OGX ended the year with a cash position of approximately US$1.7 billion, which
is in line with our expectations taking into account the disbursement of
US$270 million with the acquisition of the stake in block BS-4.

Exploration Expenses

Exploration expenses increased R$38 million year-on-year. This variation was
primarily the result of the intensification of seismic campaigns in the
Parnaíba Basin and Colombia.

General and Administrative Expenses

General and administrative expenses decreased R$30 million year-on-year,
driven by the R$8 million reduction in expenses with profit sharing.

Dry and Sub-commercial Wells

In 2012, the Company posted an expense of R$691 million with dry wells and
sub-commercial areas. Of this amount, R$213 million accounts for previously
capitalized expenses in the BM-S-29 block, which was returned in August of
2012, and R$20 million capitalized expenses in the BM-ES-38 block, returned in
October of 2012. The remaining balance refers to dry or sub-commercial wells.

Foreign Exchange Expense

In 2012, the Company posted net foreign exchange expenses of R$364 million,
compared to net expenses of R$72 million in 2011; an increase of R$293
million.

This foreign exchange expense is almost entirely non-cash and due to a net
foreign exchange exposure of US$2.4 billion. Despite the loss in U.S. dollars
exceeding income, the Company opted not to contract hedge instruments for this
non-cash exposure as it plans to settle this dollar-denominated liability
through revenue from oil sales to be booked in the same currency, production
of which began on January 31, 2012. Thus, the net foreign exchange exposure
will be protected by a natural hedge to be generated by oil sales.

Financial Result

The R$213 million financial expense in 2012 is explained by: (a) the
un-capitalized interest on financing of R$435 million, partially offset by (b)
gains on financial investments of R$231 million; and (c) other net financial
income of R$9 million.

Cost of Goods Sold

The R$225 million cost of goods sold incurred with the oil sales after the EWT
is broken down as: (a) expenses with leasing of R$95 million; (b) O&M services
of R$51 million; (c) logistics of R$46 million; (d) royalties of R$31 million;
and (e) others of R$3 million.

Cash and Cash Equivalents

Cash and cash equivalents totaled R$3.4 billion (equivalent to about US$1.7
billion) on December 31, 2012, down R$2.0 billion from December 31, 2011. This
decrease is chiefly due to: (a) CAPEX of R$4.3 billion; (b) BS-4 block
acquisition for US$270 million (R$575 million), partially offset by (c)
capital raising in 1Q12 of R$2.5 billion; (d) EBITDA from FPSO OSX-1 of R$174
million; and (e) restitution of withholding income tax on financial
applications of R$156 million.

Property, Plant and Equipment (CAPEX)

Property, plant and equipment represented by capital expenditures during the
exploration and development phases include expenses related to drilling
campaigns and acquisition of E&P equipment. From December 31, 2011 to December
31, 2012, this balance increased by R$3.9 billion.

Loans and Financing

The R$3.3 billion increase in the balance of loans and financing between
December 31, 2011 and December 31, 2012 is due to the transactions listed in
the loans and financing table in the appendix.

                                                                                         
Income Statement
                                                                                                              R$ ('000)
INCOME STATEMENT            2012              2011            ∆               4Q12            4Q11            ∆
                                                                                                              
Net revenue                 325,393           -               325,393         174,707        -              174,707
                                                                                                              
Cost of goods               (224,802)         -               (224,802)       (100,203)       -               (100,203)
sold (COGS) ¹
Exploration                 (227,350)         (189,775)       (37,575)        (54,784)        (64,618)        9,834
expenses
Sales expenses              (5,831)           -               (5,831)         (5,831)         -               (5,831)
General and
administrative              (210,732)         (240,733)       30,001          (52,121)        (61,080)        8,959
expenses
                                                                                                              
EBITDA                      (343,322)         (430,508)       87,186          (38,232)       (125,698)      87,466
                                                                                                              
Depreciation                (31,838)          (4,504)         (27,334)        (17,173)       (1,465)        (15,708)
(part of COGS)
Amortization                (11,859)          (5,938)         (5,921)         (4,522)        (1,768)        (2,754)
(part of COGS)
Stock option                (54,663)          (56,989)        2,326           (7,372)        (34,512)       27,140
Dry/subcommercial           (691,474)         (236,055)       (455,419)       (231,238)      (236,055)      4,817
wells/areas
                                                                                                              
EBIT                        (1,133,156)       (733,994)       (399,162)       (298,537)      (399,498)      100,961
                                                                                                              
Financial revenue           265,382           417,322         (151,940)       43,145         71,573         (28,428)
Financial expense           (478,790)         (216,853)       (261,937)       (149,637)      (83,683)       (65,954)
Net financial               (213,408)         200,469         (413,877)       (106,492)      (12,110)       (94,382)
results
Currency exchange           (364,292)         (71,644)        (292,648)       1,788          (67,453)       69,241
Derivatives                 16,385            (122,705)       139,090         (1,909)        (40,890)       38,981
                                                                                                              
EBT                         (1,694,471)       (727,874)       (966,597)       (405,150)      (519,951)      114,801
                                                                                                              
(-) Income tax              508,595           217,989         290,606         119,444        187,364        (67,920)
                                                                                                              
Net profit (loss)
for the year- Pro           (1,185,876)       (509,885)       (675,991)       (285,706)      (332,587)      46,881
forma
                                                                                                              
OGX Campos Merger           13,102            -               13,102          -              -              -
                                                                                                              
Net profit (loss)
for the year-          (1,172,774)    (509,885)    (662,889)       (285,706)    (332,587)    46,881
Book value
                                                                                                              
Attributed to:
Non controlling             (34,109)          (27,720)        (6,389)         (12,803)       (10,553)       (2,250)
interests
Controlling            (1,138,665)    (482,165)    (656,500)       (272,903)    (322,034)    49,131
shareholders


Note:
¹ This balance does not include parts of COGS related to depreciation,
amortization and royalties that are disclosed in specific lines of the table
above


                                                                             
Balance Sheet
                                                                                            R$ ('000)
BALANCE SHEET       Dec 31,        Dec 31,                                  Dec 31,         Dec 31,
                    2012           2011                                     2012            2011
ASSETS                                         LIABILITIES AND                 
                                                      EQUITY
Current                                               Current
assets                                                Liabilities
Cash and cash       3,381,326      5,367,451          Trade payables        925,513         431,931
equivalents
                                                      Taxes,
Marketable          -              52,290             contributions         22,894          26,070
securities                                            and profit
                                                      sharing payable
Escrow              14,963         39,039             Salaries and          58,921          54,507
deposits                                              payroll charges
Taxes and                                             Loans and
contributions       -              78,137             financings            84,534          22,301
recoverable
Derivative                                            Derivative
financial           26,350         8,879              financial             1,416           -
instruments                                           instruments
Oil                                                   Accounts
inventories         118,027        -                  payable to            100,845         96,692
                                                      related parties
Other credits       94,686         27,934             Other accounts        20,096          87,807
                                                      payable
                                                                                            
                    3,635,352      5,573,730                                1,214,219       719,308
                                                      Noncurrent
                                                      Liabilities
                                                      Loans and             7,960,166       4,750,113
                                                      financings
                                                      Provisions            210,887         11,743
                                                                                            
                                                                            8,171,053       4,761,856
Noncurrent                                            Shareholders’
Assets                                                Equity
Inventories         206,511        390,071            Capital stock         8,821,155       8,810,307
Taxes and                                             Capital
contributions       215,311        278,810            reserves              178,793         274,109
recoverable
Deferred
income taxes        791,893        282,693            Earnings              -               -
and social                                            reserves
contributions
Credits with                                          Currency
related             179,454        139,386            translation           42,571          19,588
parties                                               adjustments
                                                      Retained
                                                      earnings              (1,343,306)     (289,444)
                                                      (deficit)
Fixed assets        10,027,389     6,172,783
                                                      Portion
                                                      attributed to         7,699,213       8,814,560
                                                      controlling
                                                      shareholders
                                                      Portion
Intangible          2,060,438      1,512,724          attributed to         31,863          54,473
assets                                                non-controlling
                                                      interests
                                                                                            
                    13,480,996     8,776,467                                7,731,076       8,869,033
                                                                                            
                                                      Total
Total Assets     17,116,348   14,350,197     Shareholders’      17,116,348    14,350,197
                                                      Equity
                                                                                            


Fixed Assets

                                          R$ ('000)
FIXED ASSETS
                                              
Balance as of December 31, 2011               6,172,783
                                              
(+) CAPEX
Campos Basin                                  2,707,599
Santos Basin                                  706,817
Parnaíba Basin                                477,697
Espirito Santo Basin                          49,650
Pará Maranhão Basin                           46,902
Colombian Basins                              -
Corporate                                     347,511
                                              4,336,175
                                              
(+) Borrowing costs                           173,136
                                              
(+) Asset retirement obligation               146,302
                                              
(-) Gross margin EWT                          (79,644)
                                              
(-) Disposals                                 (98)
                                              
(-) Depreciation                              (49,892)
                                              
(-) Write off Dry/Subcommercial wells         (671,373)
                                              
Balance as of December 31, 2012           10,027,389


                                       
Loans and Financing
                                              
                                              R$ ('000)
LOANS AND FINANCING
                                              
Balance as of December 31, 2011               (4,772,414)
                                              
(-) New fundings                              (2,536,892)
(-) Accrued interests                         (608,572)
(-) Currency exchange                         (714,834)
(+) Interest paid                             565,682
(+) Funding costs                             39,032
(-) Amortization of funding costs             (16,702)
                                              
Balance as of December 31, 2012         (8,044,701)


Conference Call:

Wednesday, March 27 at 12:00 (Brasília Time Zone); 11:00 A.M. (EST)
Telephone (Brazil): +55 11 4688-6341
Telephone Toll-free (US): +1 855 281-6021
Telephone (US): +1 786 924-6977
Code: OGX
Webcast in Portuguese: www.ccall.com.br/ogx/4t12.htm
Webcast in English: www.ccall.com.br/ogx/4q12.htm

Audio will be available three hours after the conference call on the IR
website: www.ogx.com.br/ri
The conference call will be conducted in English with simultaneous translation
to Portuguese.

ABOUT OGX

OGX Petróleo e Gás SA is focused on oil and natural gas exploration and
production and is conducting the largest private-sector exploratory campaign
in Brazil. OGX has a diversified, high-potential portfolio, comprised of 26
exploratory blocks in the Campos, Santos, Espírito Santo, Pará-Maranhão and
Parnaíba Basins in Brazil, and 5 exploratory blocks in Colombia, in the Lower
Magdalena Valley and the Cesar-Ranchería basins. The total extension area is
of approximately 4,600 km² in sea and approximately 36,700 km² on land, with
24,500 km² in Brazil and 12,200 km² in Colombia. OGX relies upon an
experienced management team and holds a solid cash position, with
approximately US$1.7 billion in cash (as of December 2012) to fund its E&P
investments and new opportunities. In June of 2008, the company went public
raising R$6.7 billion, which at the time was the largest amount ever raised in
a Brazilian IPO. OGX is a member of the EBX Group, an industrial group founded
and under the leadership of Brazilian entrepreneur Eike F. Batista, who has a
proven track record in developing new ventures in the natural resources and
infrastructure sectors. For more information, please visit: www.ogx.com.br/ri

LEGAL NOTICE

This document contains Company-related statements and information that reflect
the current vision and/or expectations the Company and its management have
regarding its business plan. These include, among others, all forward-looking
statements that involve forecasts and projections, indicate or imply results,
performance or future achievements, and may contain words such as “believe,”
“foresee,” “expect,” “consider,” “is likely to result in” or other words or
expressions of similar meaning. Such statements are subject to a series of
expressive risks, uncertainty and premises. Please be advised that several
important factors can cause the actual results to diverge materially from the
plans, objectives, expectations, estimations, and intentions expressed in this
document. In no event shall the Company or the members of its board,
directors, assigns or employees be liable to any third party (including
investors) for investment decisions or acts or business carried out based on
the information and statements that appear in this presentation, or for
indirect damage, lost profit or related issues. The Company does not intend to
provide to potential shareholders with a revision of the statements or an
analysis of the differences between the statements and the actual results. You
are urged to carefully review OGX's offering circular, including the risk
factors included therein. This presentation does not purport to be
all-inclusive or to contain all the information that a prospective investor
may desire in evaluating OGX. Each investor must conduct and rely on its own
evaluation, including of the associated risks, in making an investment
decision.

Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20130326006532/en/

Multimedia
Available:http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50598428&lang=en

Contact:

OGX Contacts
Investors:
Roberto Monteiro, +55 21 2163 6237
roberto.monteiro@ogx.com.br
or
Eduardo Lucchesi, +55 21 2163 6237
eduardo.lucchesi@ogx.com.br
or
Thomaz Freire, +55 21 2163 6237
thomaz.freire@ogx.com.br
or
Media:
Daniele Rivera, +55 21 2163 7568
daniele.rivera@ogx.com.br
 
Press spacebar to pause and continue. Press esc to stop.