OGX Plummets on Lower-Than-Expected Output, Dry Wells: Rio Mover

OGX Petroleo e Gas Participacoes SA, the oil company controlled by Brazilian billionaire Eike Batista, fell the most in more than four months after reporting lower-than-expected output and two dry holes.

OGX dropped 4.5 percent to 16.22 reais in Sao Paulo, the most since Oct. 3. It has climbed 19 percent this year, compared with a 16 percent gain in Brazil’s benchmark stock index.

The company’s first commercial well, at the Waimea field off Rio de Janeiro’s coast, will produce 10,000 to 13,000 barrels a day during the next few months, Chief Executive Officer Paulo Mendonca said on a conference call today. Investors were expecting 15,000 barrels a day, said Rafael Andreata, an analyst at Planner Corretora de Valores.

“The main reason for the drop is the production number at Waimea,” Andreata said in a telephone interview from Sao Paulo today. “There’s a risk of not meeting production growth targets.”

OGX will start injecting water into the reservoir to increase pressure and improve production levels at the project, Mendonca said. The two dry holes are located in the southeastern Espirito Santo basin.

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