OGX – Second Quarter 2012 Results

RIO DE JANEIRO--(BUSINESS WIRE)--OGX Petróleo e Gás Participações S.A. (Bovespa: OGXP3) announces today its results for the second quarter of the 2012 fiscal year. The financial and operational data below is presented on a consolidated basis, in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board - IASB and, in reais (R$), except where otherwise indicated.

“After replacing the centrifugal submersible pump on well OGX-26, in the Tubarão Azul Field in the Campos Basin, we resumed production there and began drilling the third production well in the field, which we expect to begin operating by the end of this year. At the same time, we initiated the development of Tubarão Martelo Field and continued our exploration campaign with oil discoveries in Itacoatiara and Honolulu, also in the Campos Basin,” commented Luiz Carneiro, CEO of OGX. “In July, we made an additional delivery of approximately 800 thousand barrels of oil to Shell, bringing our total delivery for the year to 1.6 million barrels,” added Mr. Carneiro.

“Our projects within the EBX Group are helping up develop a stronger, sustainable platform for growth. We are on schedule to deliver gas to MPX by yearend in the Parnaíba Basin with 15 producing wells drilled and more on the way. Also, the additional FPSO’s from OSX are on schedule and expected to arrive in the second semester of 2013,” concluded Mr. Carneiro.

Second quarter highlights and subsequent events:

• Average daily production in the second quarter at the Tubarão Azul Field of 9.1 kboepd
• Start of production at OGX-68HP, the second well in the Tubarão Azul Field
• Declaration of commerciality of the Tubarão Azul Field (Waimea Complex) and submission of the Development Plan for this area, with total recoverable volume of 110 million barrels of oil, according to OGX estimates
• Declaration of commerciality of the Tubarão Martelo Field (Waikiki Complex) and submission to the National Petroleum Agency (ANP) of the Development Plan for this area, with total recoverable volume of 285 million barrels of oil, according to OGX estimates
• Discovery of the Itacoatiara accumulation in the Campos Basin, which is part of the Waikiki Complex
• Discovery of hydrocarbons in the pre-salt Honolulu accumulation in the Campos Basin
• Delivery of approximately 800 thousand barrels to Shell on July 26
• Initiation of drilling of third production well in Tubarão Azul Field, and first production well in Tubarão Martelo Field

Campos Basin

Production Development

EWT in the Waimea Complex:

During an Extended Well Test (EWT) in the Tubarão Azul Field that lasted approximately six months, we tested the OGX-26 and OGX-68 wells and were able to learn more about the characteristics of the reservoir (permeability, transmissibility and reservoir limits, among others), as well as the behavior of the pressure with the application of different flow rates and the aquifer interaction.

We also identified the necessity of replacing the centrifugal submersible pump in OGX-26HP for a pump with different features in order to adjust the pumping capacity. In July, we began the replacement and finished it in the first week of August.

Average production in the Campos Basin in July, operating only with well OGX-68, was 7.0 kboepd.

Oil sales:

In March and April, we delivered 794 thousand barrels of oil to Shell relative to the two first shipments. The oil sales revenues were booked as a reduction in CAPEX (intangible) since they occurred before the declaration of commerciality.

At the end of July, we delivered another shipment to Shell of approximately 800 thousand barrels of oil, totaling 1.6 million barrels, comprising the Company’s first sales contract of 1.2 million barrels and an additional portion. OGX is currently evaluating opportunities for further sales. The chart below shows the Company’s managerial EBITDA reconciliation after the delivery of the first cargos:

					R$ ('000)
Extended Well Test	1st cargo		2nd cargo		Total
Operation Period	51 days		27 days		-
Production related to the shipments - in barrels (bbls)	547,376		246,809		794,185
R$ ('000)
Gross Revenue¹	118,003		55,996		173,999
Sales Taxes	-		-		-
Royalties	(10,687	)	(4,938	)	(15,624	)
Leasing	(24,078	)	(13,222	)	(37,301	)
OSX Services	(13,944	)	(7,236	)	(21,180	)
Logistics	(12,005	)	(7,410	)	(19,415	)
Others	(871	)	35		(835	)
EBITDA	56,418		23,226		79,644
% EBITDA / Gross Revenue	47.81	%	41.48	%	45.77	%
EBITDA / barrel - (R$/barrel)	103.07		94.10		100.28
Average FX Rate in the Period (BRL/USD)	1.7614		1.8678		-

Waikiki Complex Development:

We obtained the license from ANP to begin drilling the first two production wells in Tubarão Martelo Field, in the Waikiki Complex. We started drilling the first well TBMT-1 with Ocean Lexington rig and will soon begin to drill a second well, TBMT-2.

Declarations of Commerciality:

In this quarter, the Company presented declarations of commerciality for the Tubarão Azul and Tubarão Martelo Fields and submitted Development Plans (DP) to ANP, which are currently under analysis.

In July, we received authorization from ANP to begin drilling the first injection well in the Tubarão Azul field, as well as the third production well, which has already begun.

Campos Basin Exploration Campaign:

In this quarter, we resumed drilling wildcat wells in the Campos Basin, with discoveries in the Itacoatiara and Honolulu accumulations.

Below we highlight some of the results from the second quarter:

Pipeline: We completed the drilling of OGX-80, an appraisal well, where we tested the limits of the structure and identified a hydrocarbon zone with 51 meters of net pay in the Albian section.

Tambora: We completed the drilling of the second appraisal well, OGX-81, where we found 62 meters of net pay in the Albian section and 6 meters in the Eocene section.

Ingá: We completed the drilling of the fourth appraisal well of the accumulation, OGX-84, but we have not identified the presence of any hydrocarbons.

Tupungato: We completed the drilling of the first appraisal well of the accumulation, OGX-83D, where we found 83 meters of net pay in the Albian section.

Itacoatiara: We completed the drilling of a wildcat well in the Itacoatiara accumulation, OGX-79, in which we found 64 meters of net pay in the Albian section.

Honolulu: We completed the drilling of a wildcat well in the accumulation, OGX-78, in which we found 67 meters of net pay in the Aptian (pre-salt) section.

Camboinhas: We completed the drilling of a wildcat well in the accumulation, OGX-86, but we have not identified the presence of any hydrocarbons.

Villarrica: We completed the drilling of a wildcat well in the accumulation, OGX-87, which we confirmed 8 meters of net pay in the Maastrichtian section, and 2 meters in the Paleocene section.

Fuji: We started drilling the fourth appraisal well of the accumulation, OGX-90D, which is still in progress.

As soon as we receive the environmental license, and according to our current plan, we will begin drilling in BM-C-37 and BM-C-38 blocks, as identified here.

Below is a summary of the wells, both concluded and in progress, in the Campos Basin:

WELLS CONCLUDED IN 2Q12
WELL	BLOCK	PROSPECT	RIG	COAST DISTANCE	WATER DEPTH	NET PAY	DRILLING AREA¹
OGX-78	BM-C-43	Honolulu - 1	ENSCO 5002	99 km	320m	Aptian: 67m	N/A²
OGX-79	BM-C-39	Itacoatiara - 1	ENSCO 5004	89 km	102m	Albian: 64m	N/A²
OGX-80	BM-C-41	Pipeline – 6	Ocean Lexington	76 km	128m	Albian: 51m	N/A²
OGX-81	BM-C-41	Tambora - 2	Ocean Ambassador	87 km	139m	Eocene: 6m Albian: 62m	N/A²
OGX-83D	BM-C-41	Tupungato - 1D	Ocean Lexington	86 km	132m	Albian: 83m	1C
OGX-84	BM-C-40	Ingá - 4	Ocean Ambassador	96 km	107m	-	1C
OGX-86	BM-C-39	Camboinhas	ENSCO 5004	84 km	101m	-	N/A²
OGX-87	BM-C-42	Villarrica	Ocean Ambassador	87 km	138m	Maastrichtian: 8m Paleocene: 2m	N/A²
ONGOING WELLS
WELL	BLOCK	PROSPECT	RIG	COAST DISTANCE	WATER DEPTH	STATUS	DRILLING AREA¹
OGX-90D	BM-C-41	Fuji - 3D	ENSCO 5004	82 km	128m	In progress since 07/16	3C
TBMT-1D	BM-C-39	Tubarão Martelo Field	Ocean Lexington	90 km	105m	In progress since 08/07	1C
OGX-60HP	BM-C-41	Waimea – 2D	ENSCO 5002	84 km	132m	In progress since 08/12	1C
TBMT-3D	BM-C-39	Tubarão Martelo Field	Ocean Ambassador	89 km	106m	In progress since 08/13	1C

Note:

1 As compared to accumulations reported in the Dec/10 D&M report

2 Discovery after the Dec/10 D&M report of contingent resources

Parnaíba Basin

In the second quarter, we drilled two successful exploration wells in the Parnaíba basin. We concluded the drilling of wildcat well OGX-82 in the Fazenda São Francisco accumulation, which confirmed the presence of a hydrocarbon system in the PN-T-85 block through the discovery of hydrocarbons with 3 meters of net pay in the Devonian section.

We also completed a drill-stem test in well OGX-88 (the first appraisal well in the Bom Jesus accumulation) which was performed in 36 meters of gas net pay in the carboniferous section, opening a range of 1,273 to 1,288 meters in the Poti Formation during approximately 30 hours of production. We obtained flow rates between 170,000 m³/day and 491,000 m³/day, with a variation in the choke opening from 3/8 inches to ¾ of an inch.

In addition, a low gas condensate ratio (CGR) was observed, indicating dry gas and demonstrating the similarity of these results with the previously tests carried out in the Gavião Real Field. These results support the future development of the Bom Jesus accumulation, allowing us to continue drilling more appraisal wells in this area.

On August 10, we started operating the fourth rig (TUS-125) in the Parnaíba basin, drilling the exploratory prospect Fazenda Santa Maria, OGX-92, in the PN-T-84 block. Since the beginning of this year, we have drilled three new successful exploration prospects, bringing the total number of wells in the basin to 13, a 77% success rate. These results reinforce a positive perspective of the region’s significant potential, with the discovery of accumulations in different levels and with excellent proven production capacity.

Development of the Gavião Real and Gavião Azul fields:

We have made progress in the development of the Gavião Real Field project, drilling 15 production wells to date. We have also drilled two exploratory wells, OGX-22 and OGX-38, which will become production wells, bringing the total number of wells in the project to 16.

With most of the equipment manufactured in Brazil and abroad already delivered and with civil and mechanical assembly well advanced, we have completed earthworks and are on schedule with the project. Currently, the activities on the site include: i) civil and mechanical assembly at the clusters, with the installation of concrete foundations and equipment; ii) launching of spools; iii) building the tanks and connection of wells to manifolds; iv) launching of the gas pipelines which will connect the production clusters and the Gas Treatment Unit (GTU) to transport the gas production.

Natural gas production at the Gavião Real Field will begin in the fourth quarter of this year, with the commissioning of the GTU and the turbines of the MPX Parnaíba Thermoelectric Complex. Commercial production will start in the beginning of 2013.

Below is a summary of the wells, both concluded and in progress, in the Parnaíba Basin:

WELLS CONCLUDED IN 2Q12
WELL	BLOCK	PROSPECT	RIG	COAST DISTANCE	WATER DEPTH	NET PAY	DRILLING AREA¹
OGX-77	PN-T-85	Fazenda Axixá	BCH-05	Onshore Block		Devonian: 2m	N/A²
GVR-8D	PN-T-68	Gavião Real	BCH-12	Onshore Block		Development well	3C
GVR-7DA	PN-T-68	Gavião Real	QG-1	Onshore Block		Development well	3C
OGX-82	PN-T-85	Fazenda São Francisco	BCH-05	Onshore Block		Devonian: 3m	N/A²
GVR-9	PN-T-68	Gavião Real	BCH-12	Onshore Block		Development well	3C
GVR-10D	PN-T-68	Gavião Real	QG-1	Onshore Block		Development well	3C
GVR-12D	PN-T-68	Gavião Real	BCH-12	Onshore Block		Development well	3C
GVR-14D	PN-T-68	Gavião Real	QG-1	Onshore Block		Development well	3C
OGX-88	PN-T-68	Bom Jesus - 1	BCH-05	Onshore Block		Carboniferous: 36m	N/A²
ONGOING WELLS
WELL	BLOCK	PROSPECT	RIG	COAST DISTANCE	WATER DEPTH	STATUS	DRILLING AREA¹
GVR-11D	PN-T-68	Gavião Real	BCH-12	Onshore Block		In progress since 07/26	3C
OGX-91D	PN-T-67	SW Bom Jesus	BCH-5	Onshore Block		In progress since 07/30	N/A²
OGX-92	PN-T-84	Faz. Santa Maria	TUS-125	Onshore Block		In progress since 08/10	N/A²

Notes:

1 As compared to accumulations reported in the Dec/10 D&M report

2 Discovery after the Dec/10 D&M report of contingent resources

Santos Basin

In the second quarter, we began drilling the first appraisal well in the Fortaleza accumulation, OGX-85, where, in addition to a greater understanding of the Albian section, we are looking for more information of the Aptian (pre-salt) section, where we recently identified a microbiolite reservoir in the pre-salt with a 150 meter column through well OGX-63.

In addition, we began drilling OGX-89D, the second appraisal well in the Natal accumulation. Through the OGX-11D and OGX-74 wells, drilled in April, we proved the presence of sandstone reservoirs from the Santonian Age and found gas and condensate in OGX-11D, as well as the presence of light oil with 38º API in the test carried out on OGX-74 well. We are considering drilling another appraisal well in this accumulation before the end of the exploration period in March 2013.

Below is a summary of the activities in the Santos Basin in this quarter:

WELLS CONCLUDED IN 2Q12
WELL	BLOCK	PROSPECT	RIG	COAST DISTANCE	WATER DEPTH	NET PAY
OGX-74	BM-S-59	Natal - 1	Ocean Quest	115 km	196m	Santonian: 6m
ONGOING WELLS
WELL	BLOCK	PROSPECT	RIG	COAST DISTANCE	WATER DEPTH	STATUS
OGX-85	BM-S-57	Fortaleza	Ocean Star	85 km	155m	In progress since 06/12
OGX-89D	BM-S-59	Natal - 2D	Ocean Quest	111 km	170m	In progress since 07/03

Other Basins

Espírito Santo Basin:

Although we have not drilled any well in this basin in 2Q12, we plan to resume our exploration campaign before the end of the exploration period with new drills in the southern blocks of the basin (BM-ES-39 and BM-ES-40), considered a new and promising area for oil and natural gas.

Colombia:

We continue to acquire seismic data in the Lower Magdalena Valley basin (VIM-5 block), and count with more than 300 people involved in our operations in the country.

Next Events

OGX has several important events planned for the coming months, including:

• Connect the third production well in the Tubarão Azul Field
• Begin commissioning the GTU in the Parnaíba Basin
• Obtain results of tests and drilling in the Santos Basin
• Continue the exploration and wildcat campaigns in the Campos, Santos, Parnaíba and Espírito Santo basins
• Continue drilling and completing development wells in Parnaíba
• Gradually return the drilling rigs with contracts expiring between the end of 2012 and the beginning of 2013

Earnings Result

We ended the first half of 2012 with negative net earnings of R$ 543 million, most of it with no impact on cash flow, and mainly due to: (a) net financial expenses of R$ 356 million, mostly from non-cash accounting effect of foreign exchange variations; (b) accounting losses related to dry/sub-commercial wells of R$ 165 million; (c) expenses with our exploration campaign amounting to R$ 136 million; and (d) general and administrative expenses of R$ 117 million; partially offset by the positive income tax and social contribution effect of R$ 231 million. The income statement is presented below:

											R$ ('000)
Income Statement	1H12		1H11		∆		2Q12		2Q11		∆
Gross Revenues	-		-		-		-		-		-
(-) Taxes on sales	-		-		-		-		-		-
Net revenue	-		-		-		-		-		-
Cost of products sold	-		-		-		-		-		-
Exploration expenses	(136,336	)	(74,982	)	(61,354	)	(47,134	)	(42,689	)	(4,445	)
General and administrative expenses	(117,149	)	(107,833	)	(9,316	)	(62,865	)	(64,832	)	1,967
EBITDA	(253,485	)	(182,815	)	(70,670	)	(109,998	)	(107,521	)	(2,477	)
Depreciation	(3,091	)	(1,829	)	(1,262	)	(1,570	)	(305	)	(1,265	)
Amortization	(3,539	)	(2,478	)	(1,061	)	(1,787	)	(2,209	)	422
Stock option	(5,590	)	(18,346	)	12,756		29,743		(19,701	)	49,444
Dry/subcommercial wells	(165,523	)	-		(165,523	)	(145,582	)	-		(145,582	)
EBIT	(431,228	)	(205,468	)	(225,760	)	(229,195	)	(129,736	)	(99,459	)
Financial revenue	1,084,495		290,760		793,735		666,381		160,159		506,222
Financial expense	(1,441,069	)	(303,016	)	(1,138,053	)	(1,041,514	)	(190,316	)	(851,198	)
EBT	(787,802	)	(217,724	)	(570,078	)	(604,328	)	(159,893	)	(444,435	)
(-) Income tax	231,251		66,404		164,847		192,579		47,667		144,912
Net profit (loss) for the year.-Pro forma	(556,551	)	(151,320	)	(405,231	)	(411,749	)	(112,226	)	(299,523	)
OGX Campos Merger¹	13,102		-		13,102		13,102		-		13,102
Net profit (loss) for the year- Book value	(543,449	)	(151,320	)	(392,129	)	(398,647	)	(112,226	)	(286,421	)
Attributed to:
Non controlling interests	(21,018	)	(8,679	)	(12,339	)	(8,619	)	(3,469	)	(5,150	)
Controlling shareholders	(522,431	)	(142,641	)	(379,790	)	(390,028	)	(108,757	)	(281,271	)

Note:

1 Earnings result of OGX Campos from January 1, 2012 to May 31, 2012, date when it was incorporated by OGX Ltda. This number is segregated among all lines of the financial statements.

Exploration Expenses

Total exploration expenses in the first half of the year were R$ 136 million, an increase of R$ 61.4 million from the same period of last year. This variation was due to higher expenses related to geological and geophysical studies, and to the intensification of seismic campaigns, mainly in the Parnaíba basin.

General and Administrative Expenses

General and administrative expenses in 1H12 were R$ 117 million, in line with the first half of 2011.

Dry/sub-commercial wells

Accounting losses of R$ 165 million associated to the costs from written-off wells declared as dry or sub-commercial in 2012: one in the Campos basin and two in the Espírito Santo basin.

Net Financial Result

In 1H12, the Company’s net financial expense was R$ 356 million, compared to a net financial expense of R$ 12 million in 1H11, showing a negative variation of R$ 344 million. This variation is chiefly the result of the U.S. dollar appreciation against the real, which generated a net loss from foreign exchange of R$ 339 million in 1H12, as opposed to revenues of R$ 9 million in 1H11.

This foreign exchange expense is almost entirely a non-cash accounting effect and is due to a net foreign exchange exposure of US$ 1.7 billion. Despite the fact that liabilities denominated in U.S. dollars exceed the amount of our assets in the same currency, the Company decided not to use any financial hedge instrument against this accounting exposure as it plans to settle this U.S. dollar-denominated liability with revenues in the same currency from oil sales, which production began on January 31, 2012. Therefore, the net currency exposure will be protected by a natural hedge from oil sales.

Balance Sheet

We ended the second quarter with a solid cash position of R$ 5.9 billion (equivalent to US$ 2.9 billion).

The Company’s main balance sheet accounts at the end of 2Q12 and 4Q11 are shown below:

						R$ ('000)
Balance Sheet	6/30/12	12/31/11		6/30/12		12/31/11
ASSETS			LIABILITIES AND EQUITY
Current Assets			Current Liabilities
Cash and cash equivalents	5,938,883	5,367,451	Trade payables	547,250		431,931
Marketable securities	3,425	52,290	Taxes, contributions and profit sharing payable	14,264		26,070
Escrow deposits	1,912	39,039	Salaries and payroll charges	36,167		54,507
Taxes and contributions recoverable	92,546	78,137	Loans and financings	86,943		22,301
Derivative financial instruments	28,824	8,879	Derivative financial instruments	2,744		-
Oil inventories	98,552	-	Accounts payable to related parties	111,721		96,692
Other credits	53,479	27,934	Other accounts payable	18,509		87,807
	6,217,621	5,573,730		817,598		719,308
			Noncurrent Liabilities
			Loans and financings	7,867,136		4,750,113
			Asset retirement obligation	115,505		11,743
				7,982,641		4,761,856
Noncurrent Assets
			Shareholders' Equity
Inventories	301,520	390,071	Capital stock	8,820,994		8,810,307
Taxes and contributions recoverable	279,215	278,810	Capital reserves	182,298		274,109
Deferred income taxes and social contributions	513,949	282,693	Earnings reserves	97,401		-
Credits with related parties	166,716	139,386	Currency translation adjustments	41,323		19,588
			Retained earnings (deficit)	(824,977	)	(289,444	)
Fixed Assets	8,172,793	6,172,783
			Portion attributed to controlling shareholders	8,317,039		8,814,560
Intangible Assets	1,510,418	1,512,724	Portion attributed to non-controlling interests	44,954		54,473
	10,944,611	8,776,467		8,361,993		8,869,033
Total Assets	17,162,232	14,350,197	Total Liabilities and Equity	17,162,232		14,350,197

Cash and Cash Equivalents

The consolidated cash balance totaled R$ 5.9 billion on June 30, 2012, which represented a R$ 571 million increase over December 31, 2011. This increase is related to fundraising operations in 1Q12, which were partially offset by investments of R$ 2.1 billion.

Fixed Assets

It comprises mainly capital expenditures related to drilling campaigns and acquisition of E&P equipment. In the first half of 2012 the PPE varied mainly due to the following items:

	R$ ('000)
Fixed assets
Balance as of December 31, 2011:	6,172,783
(+) CAPEX
Campos Basin	1,588,180
Santos Basin	298,858
Parnaíba Basin	172,908
Espírito Santo Basin	46,671
Pará- Maranhão Basin	22,428
Colombian Basins	298
Corporate	(58,287	)
	2,071,056
(+) Borrowing costs	79,320
(+) Asset retirement obligation	103,047
(-) Gross margin EWT	(79,644	)
(-) Disposals	(54	)
(-) Depreciation	(8,192	)
(-) Write off Dry/Subcommercial wells	(165,523	)
Balance as of June 30, 2012	8,172,793

Loans and Financing

The R$ 3.2 billion raise in loans and financing balance between December 31, 2011 and June 30, 2012 is due to the following transactions:

	R$ ('000)
Loans and Financing
Balance as of December 31, 2011:	282,693
(-) New fundings	(2,537,689)
(-) Accured interests	(263,205)
(-) Currency exchange	(630,624)
(+) Interest paid	218,705
(+) Funding costs	39,032
(-) Amortization of funding costs	(7,884)
Balance as of June 30, 2012	(2,898,972)

The “new fundraisings” were done in the first quarter of 2012: (i) Senior Unsecured Notes in the amount of US$ 1.1 billion, issued by OGX Austria; (ii) financing raised by OGX Maranhão in the amount of R$ 600 million to finance the development of Gavião Real and Gavião Azul Fields in the Parnaíba Basin.

People Management

OGX ended the first half of 2012 with 380 own employees and 5,755 third party employees responsible for conducting all administrative, exploration and oil production activities, rising approximately 14% over the same period compared to the previous year. The work and commitment of these 6,135 employees have helped make OGX the Brazilian oil and gas company responsible for the largest private exploratory campaign in Brazil. The dedication of this team has been translated into another period of important achievements that are now part of the Company’s history.

Our team is composed of professionals with broad experience in the oil and gas sector, alongside with young professionals with great potential, graduates of Brazil’s best universities. Through our strategy of contracting internationally respected suppliers to conduct operating activities, we are able to maintain a high-performance, and lean structure focused on managerial excellence.

Conference Call:

Wednesday, August 15 at 9 a.m. (Brasília Time); 8 a.m. (NY Time) Telephone (Brazil): [phone] Telephone (US): [phone] Code: OGX   Webcast in Portuguese: www.ccall.com.br/ogx/2t12.htm   Webcast in English: www.ccall.com.br/ogx/2q12.htm   Audio will be available three hours after the conference call on the IR website: www.ogx.com.br/ri The conference call will be conducted in English with simultaneous translation into Portuguese.

ABOUT OGX

OGX Petróleo e Gás SA is focused on oil and natural gas exploration and production and is conducting the largest private-sector exploratory campaign in Brazil. OGX has a diversified, high-potential portfolio, comprised of 30 exploratory blocks in the Campos, Santos, Espírito Santo, Pará-Maranhão and Parnaíba Basins in Brazil, and 4 exploratory blocks in Colombia, in the Lower Magdalena Valley and the Cesar-Ranchería basins. The total extension area is of approximately 7,000 km² in sea and approximately 37,000 km² on land, with 24,500 km² in Brazil and 12,500 km² in Colombia. OGX relies upon an experienced management team and holds a solid cash position, with approximately US$2.9 billion in cash (as of June, 2012) to fund its E&P investments and new opportunities. In June of 2008, the company went public raising R$6.7 billion, which at the time was the largest amount ever raised in a Brazilian IPO. OGX is a member of the EBX Group, an industrial group founded and under the leadership of Brazilian entrepreneur Eike F. Batista, who has a proven track record in developing new ventures in the natural resources and infrastructure sectors. For more information, please visit: www.ogx.com.br/ri.

LEGAL NOTICE

This document contains Company-related statements and information that reflect the current vision and/or expectations the Company and its management have regarding its business plan. These include, among others, all forward-looking statements that involve forecasts and projections, indicate or imply results, performance or future achievements, and may contain words such as “believe,” “foresee,” “expect,” “consider,” “is likely to result in” or other words or expressions of similar meaning. Such statements are subject to a series of expressive risks, uncertainty and premises. Please be advised that several important factors can cause the actual results to diverge materially from the plans, objectives, expectations, estimations, and intentions expressed in this document. In no event shall the Company or the members of its board, directors, assigns or employees be liable to any third party (including investors) for investment decisions or acts or business carried out based on the information and statements that appear in this presentation, or for indirect damage, lost profit or related issues. The Company does not intend to provide to potential shareholders with a revision of the statements or an analysis of the differences between the statements and the actual results. You are urged to carefully review OGX's offering circular, including the risk factors included therein. This presentation does not purport to be all-inclusive or to contain all the information that a prospective investor may desire in evaluating OGX. Each investor must conduct and rely on its own evaluation, including of the associated risks, in making an investment decision.

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