OGX Rises Most in 3 Weeks on Santos Discovery, Field Production Start Up

OGX Petroleo (OGXP3) & Gas Participacoes SA, the oil company controlled by Brazilian billionaire Eike Batista, rose the most in three weeks after announcing an offshore discovery just days before starting production for the first time.

OGX rose 5.4 percent to 14.92 reais at 4:40 p.m. in Sao Paulo, the biggest gain since Dec. 20. OGX led gainers on Brazil’s Bovespa Index.

The Fortaleza well contains the thickest reservoir OGX has found to date in the Santos Basin, according to data on the company’s website. OGX operates five exploration licenses in the Santos Basin, where the company has 1.8 billion barrels of potential oil and natural-gas resources.

“This opens up a new exploration frontier, its a new play in the basin,” Ricardo Correa, an analyst at brokerage Ativa SA, said in a telephone interview from Rio de Janeiro. “The market took the news well.”

OGX, based in Rio, found hydrocarbons in two separate sections of the Fortaleza well in the BM-S-57 block, the company said in a regulatory filing today. OGX has primarily discovered natural gas and condensates in the area since it started drilling in 2010.

OGX is preparing to start producing oil in the Campos Basin after moving its first production platform to the area last week. The progress on producing oil after months of delays in 2011 contributed to today’s gains, Correa said.

To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net