OGX Jumps to Two-Month High on Third Well in Tubarao Azul Field

OGX Petroleo & Gas Participacoes SA, the oil company controlled by billionaire Eike Batista, rallied to a two-month high after saying it started production at a third well in the Tubarao Azul field.

Shares jumped 3.9 percent to 5.09 reais at 2:11 p.m. in Sao Paulo, the biggest gain on the benchmark Bovespa index. A close at that level would be the highest since Oct. 19. The Bovespa retreated 1.2 percent.

Production at the third well began on Dec. 31, OGX said in a regulatory filing today. The output at the Tubarao Azul field in the Campos Basin off the coast of Rio de Janeiro was 10,100 barrels of oil equivalent per day before the third well opened, the company said.

“The new well is expected to produce more than the first two,” Paula Kovarsky and Diego Mendes, analysts at the investment bank Itau BBA, wrote in a note to clients published today. “The connection of the third well is a positive in itself, especially if higher flow rates are confirmed.”

OGX has advanced 17 percent in the first week of 2013 while the benchmark Bovespa index gained 2.8 percent during the same period.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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