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 the highest in two months after saying it started production at a third well in the Tubarao Azul field.

Shares jumped 2 percent to 5 reais at close in Sao Paulo, the highest since Nov. 6. The benchmark Bovespa stock index 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 14 percent in the first week of 2013 while Bovespa index gained 2.6 percent.

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