OGX Petroleo & Gas Participacoes SA (OGXP3), the worst-performing oil producer in the Americas this year, will have to sign contracts with Brazil’s oil regulator before going ahead with a plan to sell stakes in licenses, the chief regulator said.
OGX hasn’t informed the regulatory agency, known as ANP, about plans to sell shareholdings in 10 licenses awarded in an auction in May, Magda Chambriard said today in an interview in London. Rio de Janeiro-based OGX “is in talks over the blocks it won without partners,” the company said in a regulatory filing yesterday after markets closed.
OGX, controlled by billionaire Eike Batista, could be left with as little as $13 million cash by the end of the year, Credit Suisse AG said July 2, a day after the company announced it may shut its only producing oil field next year and said three others aren’t commercially viable. OGX’s shares have lost 89 percent this year, the most among more than 250 producers in the Americas worth at least $100 million tracked by Bloomberg.
In the May auction, OGX won 10 licenses to operate blocks and three others in partnership with Exxon Mobil Corp., Total SA (FP) and QGEP Participacoes SA. (QGEP3) The company must pay the ANP 377 million reais ($167 million) in so-called bid bonuses for the licenses it acquired in May.
ANP won’t investigate OGX’s previous production targets because they weren’t submitted to the oil regulator, Chambriard said. OGX said in company presentations as recently as early 2012 that it planned to reach production of 1.38 million barrels a day in 2019. Those projections were withdrawn after output at the Tubarao Azul field missed expectations.
OGX did a good job exploring in Brazil where it has drilled more than 100 wells and was the first company to produce oil from licenses sold in 2007, she said.
The securities regulator, known as CVM, is probing information released by OGX, MPX Energia SA, MMX Mineracao & Metalicos SA and CCX Carvao da Colombia SA as well as specific releases by some of Batista’s companies, including LLX Logistica SA, according to the CVM’s website. OSX Brasil SA, Batista’s shipbuilder, is the only one of the billionaire’s companies not being investigated by the securities regulator.
Press officials for MPX, MMX, OGX, CCX and LLX declined to comment on the regulatory probes.
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