QGEP Announces Excellent Results of Atlanta Well Test

            QGEP Announces Excellent Results of Atlanta Well Test    PR Newswire    RIO DE JANEIRO, Feb. 5, 2014  RIO DE JANEIRO, Feb. 5, 2014 /PRNewswire/ -- QGEP Participacoes S.A. (BMF&Bovespa: QGEP3, "Company") today announced the conclusion of the drilling and testing of the first horizontal well (7-ATL-2HP-RJS) of the Early Production System (EPS) of the Atlanta Field.  Located in Block BS-4, Atlanta is a post-salt oil field 185 km off the coast of the city of Rio de Janeiro in the Santos Basin in water depth of approximately 1,500 meters. The well was drilled to a horizontal section length of 750m and a diameter of 9.5 inches. It encountered a very high porosity sand reservoir, with average porosity of 38%. The horizontal part of the well was then cased with screens and packed with gravel, which will maximize oil productivity while preventing the movement of reservoir sand into the borehole and production equipment.  A Drill Stem Test (DST) was then successfully performed with two different flow periods, the first one more restricted in order to collect bottom hole samples of oil and gas, and the second flow with less restrictions. The two flow periods produced flow rates of 1,250 barrels of oil per day (bopd) and over 5,000 bopd, respectively. These flow rates were subject to considerable constraints associated with the DST set up and limited capacity of the surface facilities, such as storage, short term flaring limitations and low capacity electrical submersible pump (ESP).  Furthermore, the test confirmed a Productivity Index (PI) higher than was estimated during reservoir simulation studies. These excellent results obtained with the drilling, completion and DST indicated that production rates of this well, once brought onstream under normal operation conditions and equipped with a full capacity ESP, will be closer to the high end of estimated 6,000-12,000 bopd range. The results of the tests also confirmed the expected characteristics of the reservoir and the oil, with high permeability and 14o API.  As laid out in the development schedule for Atlanta, the Consortium will initiate immediately the drilling of the second horizontal well of the EPS. In the coming days, the Company will launch the bidding process for FPSOs of different capacities, covering both potential scenarios: continuing with the EPS or proceeding directly to Full Development. The decision on which FPSO will be hired will be based on the results of the tender and the impact on the economics of the project. In both scenarios, first oil at Atlanta is expected in late 2015 or early 2016.  "Production test results came in at the high end of our expected range, confirming the potential of the Atlanta Field," said Danilo Oliveira, QGEP's Production Director. "Our experienced team used cutting edge techniques and equipment, to carry out a highly successful test, demonstrating the technical know-how that we have built within QGEP. We will continue to apply this know-how as we develop the Field."  Queiroz Galvao Exploracao e Producao S.A. is the operator of the Block with a 30% ownership; other consortium members include OGX Petroleo e Gas S.A. (40%) and Barra Energia do Brasil Petroleo e Gas Ltda. (30%).  For more information, please contact our Investor Relations team: Phone: +55-21-3509-5959 E-mail: ri@qgep.com.br www.qgep.com.br/ri  Website: http://www.qgep.com.br/ri