OGX Liquidation Signaled as Oil Reserves Plummet: Brazil Credit

Eike Batista’s OGX Petroleo & Gas Participacoes SA is trading in the bond market as if it will be liquidated after an audit showed reserves at the company’s main oil field are 62 percent less than it had estimated.

OGX’s $2.56 billion of notes due 2018 have sunk 8.9 cents to a record 6 cents on the dollar after reserves-auditing firm DeGolyer & MacNaughton said Oct. 3 the Brazilian company’s Tubarao Martelo field may hold up to 108.5 million barrels of crude, compared with an OGX estimate of 285 million last year. The notes have plunged 93 percent in 2013, the most in emerging markets. OGX is considering filing for bankruptcy protection this month after missing a $45 million interest payment on its 2022 bonds Oct. 1, said two people with knowledge of the matter.