OGX Sinks Most in Month After Cutting Drilling Fleet

OGX Petroleo & Gas Participacoes SA (OGXP3), the oil company controlled by billionaire Eike Batista, fell the most in more than a month after saying its reducing its exploratory drilling fleet.

OGX fell 5.9 percent to 5.2 reais in Sao Paulo, the biggest drop since Sept. 14. It was the second-biggest decline on the benchmark Bovespa index.

The company returned the Ocean Ambassador drilling rig to Diamond Offshore Drilling Inc. (DO) as it focuses on developing fields where it struck oil in the past two years, it said in an e-mailed response to questions today. The Rio de Janeiro-based company plans to start producing from a third well at the Tubarao Azul field in Brazil’s southeastern Campos Basin in the fourth quarter of this year.

The reduction of the drilling fleet came earlier than investors were expecting and contributed to the share’s price drop, Erick Scott Hood, an analyst at Sao Paulo-based brokerage SLW Corretora, said in a telephone interview from Sao Paulo.

OGX will reduce capital expenditures to about $1.2 billion in 2013 from $2 billion this year as it cuts spending on equipment rentals, Chief Financial Officer Roberto Monteiro said in a Aug. 15 conference call.

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: James Attwood at jattwood3@bloomberg.net

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