OGX Stock Declines to Four-Year Low as Bonds Tumble on Dry WellPeter Millard
OGX Petroleo e Gas Participacoes SA, the Brazilian oil company controlled by billionaire Eike Batista, fell to a four-year low and its bonds tumbled after a dry hole stoked concerns about the outlook for production.
OGX fell 6.2 percent to 4.10 reais in Sao Paulo, the lowest level since December 2008. Bonds from the company due in 2018 tumbled 3.53 cents to 92.95 cents on the dollar, pushing yields to 10.25 percent, the highest in a month.
OGX completed work at a well known as Cozumel without finding any signs of oil or natural gas, according to a presentation posted on its website. The company had been planning to set up its fifth production platform at the site, Itau Unibanco Holding SA analyst Paula Kovarsky said in a note to clients.
Investors are also anxious to hear about production results from the third well at the Tubarao Azul field that the Rio de Janeiro-based company plans to release next week after starting output in early January, Joao Pedro Brugger, who helps oversee 220 million reais ($110 million) of assets at Leme Investimentos, said by phone from Florianopolis, Brazil.
The stock fell 68 percent last year after lower-than-expected output at OGX’s first two wells prompted the company to withdraw its long-term production targets.