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Ogx management presentation v7


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Ogx management presentation v7

  1. 1. Management Presentation<br />
  2. 2. Disclaimer<br />This presentation uses the terms “potential petroleum quantities”, “prospective resources” and “contingent resources” to describe those quantities of petroleum that are potentially recoverable from accumulations yet to be discovered. Because of the uncertainty of commerciality and lack of sufficient exploration drilling, and the lack of identified prospects, leads, or future development and exploration projects, the potential petroleum quantities estimated herein cannot be classified as prospective resources, contingent resources or reserves, and the prospective resources and contingent resources cannot be classified as reserves. Investors are advised that the U.S. Securities and Exchange Commission (SEC) and other international securities regulators do not recognize potential petroleum quantities and prospective and contingent resources. There is no certainty that any portion of the potential petroleum quantities or prospective resources will be discovered and, if discovered, whether they could be developed economically. Therefore, investors are cautioned not to assume that all or any part of OGX’s potential petroleum quantities or prospective resources exist, or that they can be developed economically. Accordingly, information concerning potential petroleum quantities and prospective and contingent resources contained in this presentation are not comparable to information permitted to be made public by U.S. or other international companies subject to SEC reporting and disclosure requirements, especially Regulation S-K under the Securities Act.<br />Certain of the information and conclusions set forth herein are based on projections. These projections were prepared for the limited purpose of analyzing the potential risks and benefits of an investment in the securities by illustrating under certain limited assumptions projected capital and operating expenditures, installed production capacity, expected production, and number of wells drilled. In addition, because of the subjective judgments and inherent uncertainties of projections and because the projections are based on a number of assumptions, which are subject to significant uncertainties and contingencies that are beyond the control of OGX, there can be no assurance that the projections or conclusions derived therefrom will be realized. Under no circumstances should the projections set forth herein be regarded as a representation, warranty or prediction that OGX will achieve or is likely to achieve any particular future result. There can be no assurance that OGX’s future results or projections will not vary significantly from those set forth herein. Accordingly, investors may lose all of their investment to the extent the projections or conclusions included herein are not ultimately realized.<br />This presentation also contains forward-looking statements, which may be identified by such words as "may", "plans", "expects", "believes" and similar expressions, or by their context. These statements are made on the basis of current knowledge and, by their nature, involve numerous assumptions and uncertainties. <br />This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Recipients of this presentation are not to construe the contents of this summary as legal, tax or investment advice and recipients should consult their own advisors in this regard.<br />Various factors could cause OGX's actual future results, performance or events to differ materially from those described in this presentation. In no event shall OGX 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. OGX 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.11<br />2<br />
  3. 3. Agenda<br /><ul><li>OGX Overview
  4. 4. OGX Portfolio
  5. 5. OGX Operations
  6. 6. Path to Production
  7. 7. Financial Overview
  8. 8. Appendix</li></ul>Lastupdate: 09/16/11<br />3<br />
  9. 9. OGX Overview<br />
  10. 10. OGX Overview<br />OGX is among the 15 largest pure E&P companies globally with a market cap of approximately US$25 billion, and is the 3rd most traded stock in Latin America<br />World class E&P portfolio with 10.8 billion boe of potential resources, mostly in shallow waters and onshore (low cost and off-the-shelf technology)<br />Multi-billion barrel discoveries and overall success rate exceeding 90% with high productivity reservoirs amongst the best in Brazil<br />Solid cash position allows OGX to conclude the largest and most successful private sector exploratory campaign in Brazil and to support production development (more than 60 wells spud since the beginning of its exploratory campaign in Aug. 2009)<br />Highly successful and experienced management team, combining unique intellectual capital and superior execution skills<br />Proven execution capability (from concept to oil in an unprecedented timing) with fully established operations comprising more than 5,000 people<br />Brazil’s historical under-exploration underpins massive growth opportunities for OGX<br />5<br />
  11. 11. OGX Main Accomplishments<br />OSX-1 and initial<br />production<br />1 block acquired in Parnaíba (50% stake)<br />OGX Main Accomplishments<br />Updated OGX portfolio to 10.8 bn(1)boe of potential resources<br />5 onshore blocks acquired in Colombia<br />Bond: US$ 2.6bn raised<br />Nov/ 11<br />High productivity horizontal well<br />FPSO secured for 20 years<br />Sep/11<br />OGX included in the Ibovespa Index<br />US$1.3 bnraised through an equity Private Placement<br />21 blocks acquired during the 9th Bidding Round<br />Beginning of thedrilling campaign<br />May/11<br />Apr/11<br />Acquisition of 70% stake in the Parnaíba Assets<br /><ul><li>Total investments of US$ 3.7 bn of Drilling Capex and Bonus Signature + US$ 218 M of Seismic Campaign
  12. 12. Total equity raised to date: US$8.0 bn</li></ul>Feb/11<br />Jun/10<br />IPO: US$4.1 bn raised <br />Jan/10<br />OGX Creation<br />Survey and interpretation of the 3D seismic data<br />Sep/09<br />Aug/09<br />Procurement of all equipment and services necessary to initiate the drilling campaign<br />Jun/08<br />Nov/07<br />Jul/07<br />Proven execution capability (from concept to first oil in unprecedented timing) with fully established operations comprising more than 5,000 people<br />(1) Calculated by OGX based on potential, prospective and contingent volumes contained in the DeGolyer and MacNaughton Reports<br />6<br />
  13. 13. (1)<br />Free Float<br />Free Float<br />39%<br />61%<br />Petróleo e Gás Participações S.A.(Market Capitalization (3): ~ US$25 Billion)<br />99.99%<br />66.67% (4)<br />Petróleo e Gás Ltda. <br />Maranhão Petróleo e Gás Ltda.<br />70%<br />100%<br />OGX Ownership and Corporate Structure<br /><ul><li>Daily traded average volume (1 month): ~ US$184 million
  14. 14. ~33 thousand investors
  15. 15. 3rdmost representative stock in Ibovespa index 4.1%
  16. 16. Most liquid common share</li></ul>99.99%<br />OGX Campos Petróleo e Gás S.A. <br />30%<br />100%<br />8 Blocks <br />7 Blocks <br />20 Blocks <br /><ul><li>7 - Parnaíba(70%) (2)
  17. 17. 1 – Parnaíba (50%) (2)
  18. 18. 5 - Campos (100%) (2)
  19. 19. 2 - Campos (50%)
  20. 20. 5 - Santos (100%) (2)
  21. 21. 5 - Espirito Santo (50%)
  22. 22. 5 - PAMA (100%) (2)
  23. 23. 5 - Colombia (100%) (2)</li></ul>(1) EBX represented through Centennial Asset Mining Fund LLC (Nevada, USA) (“CAMF”)<br />(2) OGX as operator<br />(3) Market data as of June 30, 2011<br />(4) MPX S.A. holds 33.33%<br />7<br />
  24. 24. CEO<br />Eike Batista<br />Gen. Exec. Officer<br />Paulo Mendonça (38)<br />Oil & Gas Commercialization<br />Joaquim Dib Cohen (32)<br />Exploration Officer<br />Paulo Mendonça (38)<br />General Counsel <br />José Roberto Faveret<br />CFO<br />Marcelo Torres<br />Production Officer<br />Reinaldo Belotti(34)<br />ExplorationCampos-ES<br />Paulo Ricardo (28)<br />Procurement<br />Olavo Foerch (32)<br />Production Development<br />José Brito (42)<br />Exploration Santos and Eq. Margin<br />Edmundo Marques (24)<br />Reservoir & Reserves<br />Roberto Toledo (31)<br />Drilling<br />Ricardo Juiniti (27)<br />E&P Laboratory<br />Dolores Carvalho (35)<br />Onshore Basin<br />Celso Martins (34)<br />Logistics<br />Billy Pinheiro (30)<br />Strategic Alliances<br />Luiz Reis (45)<br />International<br />Ernani Posrche (33)<br />Production<br />Ricardo Abiramia (24)<br />New Areas Executive Manager<br />Paulo de Tarso Guimarães (34)<br />GeologicalOperations<br />Moacir Santos (38)<br />Applied Technology<br />Marcos Amaral (28)<br />HSE<br />Leandro Leme (31)<br />Highly successful and committed management team, <br />Combining unique intellectual capital and superior execution skills <br />Management Organization Structure (1)<br />(1) Parentheses represent years experience in the E&P industry<br />8<br />
  25. 25. PBR success index<br />Exploratory Team<br /><ul><li>Paulo Mendonça led the Petrobras exploration team from 2002 to 2007
  26. 26. Success index in excess of 60% on average offshore Brazil from 2002-2007 whilst at Petrobras
  27. 27. Over 10 billion boe and more than 50 new fields discovered</li></ul>Proven track record having opened several new oil frontiers, including the pre-salt, and discovering over 50 new oil fields<br />Highly Qualified Exploration Team<br />9<br />
  28. 28. Brazil: Vast Untapped Oil & Gas Potential<br />Brazil: Vast Untapped Oil & Gas Potential<br />Largest oil and gas discoveries in the world<br />New provinces could propel Brazil into top reserves holders<br />Still significantly under-explored<br />% of sedimentary basins under concession<br />+ 35 bn boe<br />SaudiArabia<br />Venezuela<br />Iran<br />Iraq<br />Kuwait<br />Brazil post Tupi<br />UAE<br />Russia<br />Libya<br />Kazakhstan<br />Nigeria<br />Canada<br />US<br />Qatar<br />China<br />Angola<br />Brazil<br />Licensed <br />4%<br />BrazilTurkmenistan Iran <br />Kazakhstan China <br />Russia<br />Australia<br />Kuwait <br />Israel <br />SaudiArabiaIndia<br />Indonesia Venezuela Papua <br />NewGuineaGhana<br />Unlicensed 96%<br />Source: ANP<br />Oil & gas in the world<br />Oil and Gas Discovered Volumes<br />2000 – 2010 (Bn boe)<br />Oil Resources- December 2009 (Bn bbl)<br />Source: EIA-DOE, BP Statistical Review of World Energy 2010, Saudi Aramco, UPPSALA University, Petrobras, ANP and OGX analysis<br />Source: IHS<br />Source: BP Statistical Review of World Energy 2010 & analyst estimates<br />Brazil’s historical under-exploration underpins massive growth opportunities for OGX<br />10<br />
  29. 29. OGX Portfolio<br />
  30. 30. <ul><li>35 blocks: 30 blocks in 5 Brazilian sedimentary basins and 5 onshore blocks in 3 Colombian sedimentary basins
  31. 31. Unique portfolio with 10.8 billion potential recoverable barrels of oil equivalent (boer)
  32. 32. OGX’s business plan is based on 4.1 billion barrels already discovered in the shallow waters of the Campos Basin</li></ul>Portfolio<br />Shallowwater<br />~120m<br />Shallowwater<br />~150m<br />Shallowwater<br />~60m<br />Deepwater<br />~1,000m<br />12<br />OGX Portfolio<br />
  33. 33. Campos Basin<br /><ul><li>5.7 bn bbl of net 3C, net delineation and net mean risked prospective resources, evaluated by D&M (pre-salt not included)
  34. 34. 5 blocks operated by OGX (100% owned) and 2 operated by Maersk Oil (50% owned)
  35. 35. Total area of 1,177 km2
  36. 36. Average water depth of ~120m
  37. 37. 46 wells drilled
  38. 38. 100% success rate</li></ul>OGX’s discovered accumulations confirm a new hydrocarbon province in the southern Campos Basin<br />Campos Basin: Low Risk, Shallow Water and Large<br />13<br />
  39. 39. Santos Basin: High Potential<br />Santos Basin<br /><ul><li>1.8 bnboe of net risked prospective resources (POS of 27%), evaluated by D&M
  40. 40. 5 blocks operated by OGX (100% owned)
  41. 41. Total area of 820 km²
  42. 42. Average water depth of ~150 m
  43. 43. 9 wells drilled
  44. 44. ~ 65% success rate</li></ul>Santos basin is oneofthemostpromisingexploratoryareas in brazil, withsignificantpotential for gasand light oil<br />14<br />
  45. 45. Parnaíba basin<br />Newfrontierbasinwithhighpotential for gasproduction<br />Parnaíba Basin: Major Gas Province<br /><ul><li>1.0 bn boe of net risked mean prospective resources POS (17%) and net 3C, evaluated by D&M
  46. 46. 8 blocks operated by OGX Maranhão
  47. 47. Total area of 24,500 km²
  48. 48. Monetization of gas through thermoelectric plants to be developed by MPX/Petra (3,722 MW already licensed)
  49. 49. >75% success rate (9 wells drilled)
  50. 50. Commerciality declared for 2 accumulations</li></ul>15<br />
  51. 51. Pará Maranhão Basin: PromisingNewFrontier<br />Pará-Maranhão Basin<br /><ul><li>447 mnboe of net mean risked prospective resources (POS of 21%), evaluated by D&M
  52. 52. 5 blocks operated by OGX (100% owned)
  53. 53. Total area of 960 km²
  54. 54. Average water depth of ~60m
  55. 55. 1st well to be drilled in 2H11</li></ul>Newfrontierwithgeologicalmodel similar to westAfrica, wheresignificantdiscoveriesweremaderecently<br />16<br />
  56. 56. Espírito Santo Basin: NewFrontier in DeepWater<br />Espírito Santo Basin<br /><ul><li>817 mnboe of net mean risked prospective resources (POS of 33%), evaluated by D&M
  57. 57. 5 blocks operated by Perenco (50% owned)
  58. 58. Total area of 3,620 km²
  59. 59. Average water depth of ~1,000 m
  60. 60. 1st well to be drilled in 2H11</li></ul>Thenewfrontierof Espírito Santo hasproven to be a veryactivepetrolific system<br />17<br />
  61. 61. Colombia: Cesar-Ranchería, Middle and Lower Magdalena Valleys: Great Upside Potential<br />Colombian Basins<br />MARACAIBO <br />BASIN<br /><ul><li>1.1 bnboe of net prospective resources and net potential petroleum quantities, evaluated by D&M
  62. 62. 5 blocks operated by OGX (100% owned), 3 of which are located close to Maracaibo Basin (~80 bnboe discovered and ~50 bnboe already produced)
  63. 63. Beginning of the Seismic Campaign in 2H11</li></ul>Balancedportfolioofexploratoryassets, combiningproductionregionswithlessexploredareasnext to theMaracaibobasin, oneofthemostprolificprovinces in the world<br />18<br />
  64. 64. Portfolio Breakdown<br />19%<br />Onshore<br />8%<br />Deep Water<br />Oildiscoveries of 4.1 bn bbl are already under production development in the shallow waters of Campos Basin <br />OGX Portfolio Potential: Breakdown<br />73%<br />Shallow<br />Water<br />21%<br />Gas<br />79%<br />Oil<br />Note: “POS “ defined as geological probability of success<br />(1) The OGX portfolio potential was calculated by OGX based on volume estimates contained in the DeGolyer and MacNaughton Reports<br />(2) We consider the 3C contingent resources in the arithmetic summation of our potential portfolio based on the assumption that these resources will be converted to 2C and 1C resources after the appraisal campaign and that they will be converted into reserves after the removal of contingencies<br />(3) We consider the high estimate and not Pg-adjusted delineation area prospective resources as we believe the delineation area is part of the 3C area<br />(4) Prospective resources mean estimates Pg-adjusted. Colombia considered two Colombian basins, the Lower and Middle Magdalena Valleys Basins(5) Includes petroleum potential quantities in one Colombian basin, the Cesar-Ranchería Basin(6) OGX net interests in the table are not the same as OGX net interests contained in the DeGolyer and MacNaughton September 2009 report due to the fact that OGX now holds 100% of the interests in the concessions included in that report<br />(7) Gas volumes were converted by OGX to barrels of oil, using a conversion rate of 5,615 ft³ of natural gas to one boe<br />19<br />
  65. 65. OGX Operations<br />
  66. 66. Onshore Drilling<br />Offshore Drilling<br />Ocean Lexington (Diamond):<br /><ul><li>Daily Rate: US$ 335k
  67. 67. Max. well depth: 20,000 ft
  68. 68. Contract Expires: Feb.2013 (+one optional year)</li></ul>Ocean Ambassador (Diamond): <br /><ul><li>Daily Rate: US$ 260k
  69. 69. Max. well depth: 20,000 ft
  70. 70. Contract Expires: Sep.2012 (+ one optional year)</li></ul>Ocean Quest (Diamond):<br /><ul><li>Daily Rate: US$ 270k
  71. 71. Max. well depth: 25,000 ft
  72. 72. Contract expires: Dec.2012 (+ one optional year)</li></ul>Ocean Star (Diamond):<br /><ul><li>Daily Rate: US$ 310k
  73. 73. Max. well depth: 25,000 ft
  74. 74. Contract Expires: Feb.2013 (+ one optional year)</li></ul>QG-1 (QueirozGalvão):<br /><ul><li>Daily Rate: US$ 28k
  75. 75. Max. well depth: 14,750 ft
  76. 76. Contract Expires: Jan.2012</li></ul>BCH-05E (BCH):<br /><ul><li>Daily Rate: US$ 31.5k
  77. 77. Max. well depth: 11,500 ft
  78. 78. Contract Expires: Feb.2012
  79. 79. 3rd rig contracted</li></ul>Sea Explorer (Ensco)<br /><ul><li>Daily Rate: US$ 220k
  80. 80. Max. well depth : 20,000 ft
  81. 81. Contract Expires: Nov.2013</li></ul>Pride Venezuela (Ensco):<br /><ul><li> Daily Rate: US$235k
  82. 82. Max. well depth: 20,000 ft
  83. 83. Contract Expires: Nov.2013</li></ul>Ocean Scepter (Diamond):<br /><ul><li>Daily Rate: US$ 135k
  84. 84. Max. well depth: 30,000 ft
  85. 85. Contract Expires: Jan.2012 (+one optional year)</li></ul>Drilling campaign expanded – 8 rigs already operating simultaneously<br />Exploration Drilling Campaign<br />21<br />
  91. 91. OGX Team: ~270 employees
  92. 92. Over 5,000 peoplededicated
  93. 93. 3D Room / IOSC</li></ul>Operational Capabilities and Structure<br />22<br />
  94. 94. Path to Production<br />
  95. 95. Campos Exploratory Drilling Strategy and Results<br />Drilling Strategy<br />Drilling Results<br /><ul><li>1st phase strategy (from Mar/08 to Dec/10)
  96. 96. Seismic campaign to better image the areas and reduce risks
  97. 97. Discover the maximum amount of oil
  98. 98. 19 wells drilled 1
  99. 99. 2nd phase strategy (from Dec/10 to Mar/13)
  100. 100. 22 wells drilled 2
  101. 101. Focus on the appraisal drilling campaign to delineate existing discoveries
  102. 102. Continue exploratory program with drilling of wildcat wells
  103. 103. Begin production in October 2011
  104. 104. Drilling of 41 wells with hydrocarbons
  105. 105. OGX analysis supports recoverable resources of 4.1 billion barrels
  106. 106. Oil columns of up to ~250 meters
  107. 107. Net pay up to ~150 meters
  108. 108. Well results confirm OGX’s geological models for the Campos Basin
  109. 109. DSTs (drill stem tests) support conservative production estimate of 10 – 20 kbpd
  110. 110. One of the best DSTs ever performed in Brazil, with a production potential of 40,000 barrels per day
  111. 111. OGX production estimates are supported by results from other fields in Campos using current technology</li></ul>Notes:1 Number of wells concluded in 2010 and included in D&M’s reports2 Number of wells concluded in 2011<br />24<br />
  112. 112. Campos Basin: Focusing on Wildcat & Appraisal Wells<br />Appraisal wells<br />Wildcat Wells<br />Note:Drilling area as per D&M’s Dec/10 reports and net pay<br />26 wildcat wells and 20 appraisal wells drilled with hydrocarbons and results which support expectations<br />25<br />
  113. 113. Campos Basin: Development Business Plan<br />Initial Projects<br />Campos Basin <br />Development Plan<br />Project 2Waikiki Complex 1st oil date: 4Q13<br /><ul><li>4.1 bnbbl
  114. 114. Shallow waters
  115. 115. Average production per well 10 – 20 kbpd
  116. 116. 12 FPSOs and 11 WHPs
  117. 117. 5 FPSOs and 2 WHPs already secured
  118. 118. Average field life
  119. 119. Capex US$ 2/bbl
  120. 120. Opex <US$ 16/bbl
  121. 121. 22 development wells
  122. 122. 14 production
  123. 123. 8 injection
  124. 124. 1 FPSO and 1 WHP
  125. 125. OSX-3 and WHP-2
  126. 126. Oil of 23° - 28° API
  127. 127. Water depth: 120m
  128. 128. Average production per well 15 – 20 kbpd</li></ul>Project 1 Waimea Complex 1st oil date: Oct. 2011<br /><ul><li>42 development wells
  129. 129. 28 production
  130. 130. 14 injection
  131. 131. 3 FPSOs and 2 WHPs
  132. 132. OSX-1, OSX-2 and WHP-1
  133. 133. Oil of 20° API
  134. 134. Water depth: 140m
  135. 135. Average production per well 10 – 20 kbpd</li></ul>Illustrative<br />26<br />
  136. 136. Recent Horizontal Wells Tested<br />Campos Basin: Positive Horizontal Wells TestResults<br />Horizontal wells tested <br />Drill-stem tests performed in horizontal wells<br />Waimea OGX – 26HP<br /><ul><li>Production capacity of up to 20,000 bbl/day
  137. 137. Oil Quality of 20o API
  138. 138. Tested in Jan/2011</li></ul>Waikiki OGX-44HP<br /><ul><li>Production capacity of up to 20,000 bbl/day
  139. 139. Oil Quality of 23o API
  140. 140. Tested in Jun/2011</li></ul>Pipeline OGX-39HP<br /><ul><li>Production capacity of around 10,000 bbl/day
  141. 141. Oil Quality of 19o API
  142. 142. Tested in Jul/2011</li></ul>3 drill-stem tests already performed in horizontal wells prepared for production <br />and more to come in the second half<br />27<br />
  143. 143. Campos Basin: Production Will Begin in the Waimea Accumulation <br />Beginning of Production <br />1st Oil Production Concept<br />Horizontal production well already drilled, completed and successfully tested<br />Wet christmas tree installed<br />Wetchristmastree<br />OSX-1<br />Electrical submersible pump installed<br />Buoy<br />RisersandUmbilicals<br />Flexiblelines<br />Hydraulic Power Unit (HPU) installed<br />Mooringsand Piles<br />Umbilicals delivered<br />Maincharacteristics:<br /><ul><li>Productionpotentialof 40 kbpd w/ capacitylimited to 20 kbpd
  144. 144. Oilqualityof 20° API
  145. 145. Waterdepthof 140 meters</li></ul>Flexible lines delivered<br />Anchor system (moorings and piles) delivered<br />Installation support vessel delivered<br />EWT approved by ANP (National Petroleum Agency)<br />Preliminary and Installation License<br />Electricalsubmersiblepump<br />Horizontal Well<br />OGX first oil expected for November through Extended Well Test (EWT)<br />Illustrative frames<br />28<br />
  146. 146. Campos Basin: Equipment Secured<br />FPSO OSX-1<br />Wet Christmas Tree<br />Flexible Lines<br />Campos Basin: Equipment Secured<br />Critical equipment and services status<br />Main equipment in place<br /><ul><li>Equipment
  147. 147. Wet Christmas Tree (WCT): Already installed
  148. 148. Umbilical Terminal Assembly (UTA): Contracted
  149. 149. Hydraulic Power Unit (HPU): Delivered in April, 2011
  150. 150. Flexible Lines: Contracted with Wellstream
  151. 151. Electrical Submersible Pump (ESP): Contracted with Baker Hughes
  152. 152. 80 kbpd of processing capacity & 950,000 barrels of storage capacity
  153. 153. Expected arrival: Oct/11
  154. 154. Already installed
  155. 155. Produced by GE Oil & Gas
  156. 156. Services
  157. 157. Installation Vessel – Anchor System, Flexible Lines and Umbilicals: Contracted with WS and Aker
  158. 158. Mud line and Subsurface analysis for FPSO mooring and WHP piles: Contracted with FUGRO – already completed
  159. 159. Waimea Area Survey: Contracted with FUGRO
  160. 160. Already manufactured
  161. 161. Produced by Wellstream</li></ul>Aker Wayfarer Vessel<br /><ul><li>Contracted with Aker
  162. 162. Loaded with anchorage equipment for OSX-1</li></ul>29<br />
  163. 163. Campos Basin: Final Steps Towards Production<br />Flexible lines / umbilicals connection and risers installation<br />Moorings and Piles installation<br />Arrival of the FPSO OSX-1<br />Beginningofproduction<br />1<br />3<br />2<br />Arrival of the Buoy and installation <br />Buoy hook-up and connection to the FPSO<br />5<br />4<br />6<br />Illustrative frames<br />30<br />
  164. 164. Campos Basin: WaimeaComplexProductionConcept<br />Pioneer Production Concept<br />Pioneer Project Development<br /><ul><li>5 development wells connected to the FPSO OSX-1
  165. 165. 3 horizontal production wells
  166. 166. 1st production well, OGX-26HP, ready for production
  167. 167. 2nd production well, OGX-55HP, currently being drilled
  168. 168. 3rd production well, OGX-60HP, currently being drilled
  169. 169. Average production per well 10–20 kbpd
  170. 170. 2 subsea injection wells
  171. 171. 1 FPSO: OSX-1
  172. 172. OSX-1 expected arrival for October/2011
  173. 173. OGX-55HP and OGX-60HP wells to be hooked-up to OSX-1 after the declaration of commerciality next year
  174. 174. With 3 production wells on stream next year, OGX should reach production levels of ~50 kbpd</li></ul>ProductionWell 1<br />(OGX-26HP)<br />ProductionWell 3<br />(OGX-60HP)<br />InjectionWell 2<br />InjectionWell 1<br />ProductionWell 2<br />(OGX-55HP)<br />Development Wells<br />Illustrative frame<br />31<br />
  175. 175. Operational Expenditures<br />(Leased Equipment)<br />Opex<br /><US$ 16/bbl<br />FPSOOil capacity: 100 K bpd<br />Liquid capacity: 160 K bpd<br />Oil will be offloaded<br />WHPCapacity: 30 wellsDrilling package on topside<br />WHP Subsea Flow Lines<br />Power line<br />Gas Lift line<br />Service line<br />Water Injection line<br />Production line<br />Test line<br />Drilling + Completion<br />Development wells with dry completion<br />Gaswillbereinjected, used for gasliftorpowergeneration<br />WaterInjection<br />Capital Expenditures<br />Campos Basin: Replicable Development Concept<br />Capex<br />US$ 2/bbl<br />Note: Please see details in the Appendix slide: “Campos Basin: Typical Production Project”<br />32<br />
  176. 176. WHPs<br />FPSOs<br />Unit<br />2011<br />… 2013<br />2014<br />2015<br />2016<br />Unit<br />2013<br />2014<br />2014<br />Waimea<br />OSX-1<br />WHP-1<br />Waimea<br />Oct<br />1st Q<br />Waimea<br />OSX-2<br />2nd Q<br />WHP-2<br />Waikiki<br />2nd Q<br />Waikiki<br />OSX-3 <br />3rd Q<br />WHP-3 <br />3rd Q<br />OSX-4<br />2nd Q<br />WHP-4<br />4th Q<br />OSX-5<br />4th Q<br />WHP-5<br />4th Q<br />OSX-6<br />4th Q<br />WHP-6<br />4th Q<br />OSX-7<br />4th Q<br />WHP-7<br />1st Q<br />OSX-8<br />1st Q<br />WHP-8<br />2nd Q<br />OSX-9<br />3rd Q<br />WHP-9<br />3rd Q<br />OSX-10<br />4th Q<br />WHP-10<br />4th Q<br />OSX-11 <br />1st Q<br />WHP-11<br />OSX-12 <br />4th Q<br />1st Q<br /><ul><li>OSX-1 to be delivered in October 2011
  177. 177. OSX-2 and OSX-3 to be built in world-class Singaporean shipyards by SBM and Modec
  178. 178. OSX-4 and OSX-5 hulls already acquired by OSX
  179. 179. WHP-1 and WHP-2 with detailed engineering ongoing (EPC awarded to Techint by OSX)</li></ul>FPSOs and WHPs Expected Deliveries<br />Production equipment allocated to begin operations until 2013<br />33<br />
  180. 180. WHPs<br />FPSOs<br />OSX-1: <br /><ul><li>Production capacity of 80 kbpd and storage of 950 kbbl
  181. 181. Average Day rate of US$ 263 k
  182. 182. Arrival expected to Oct/11</li></ul>OSX-2: <br /><ul><li>Production capacity of 100 kbpd and storage of 1.3 Mbbl
  183. 183. Expected Average day rate of US$ 290 k
  184. 184. Contracted by OSX with SBM</li></ul>OSX-3: <br /><ul><li>Production capacity of 100 kbpd and storage of 1.3 Mbbl
  185. 185. Expected Average day rate of US$ 290 k
  186. 186. Contracted by OSX with MODEC</li></ul>WHP-1: <br /><ul><li>Capacity to drill up to 30 wells
  187. 187. Four production wells on-stream by the end of 2013
  188. 188. Detailed engineering ongoing (EPC awarded to Techint by OSX)
  189. 189. Two sister VLCC´s (Very Large Crude Oil Carriers) purchased on November, 2010 by OSX to be converted into FPSOs</li></ul>WHP-2: <br /><ul><li>Capacity to drill up to 30 wells
  190. 190. Three production wells on-stream by the end of 2013
  191. 191. Detailed engineering ongoing (EPC awarded to Techint by OSX)</li></ul>OSX-5: <br /><ul><li>Production capacity of 100 kbpd and storage of 1.3 Mbbl
  192. 192. Order placed for Leasing contract and EPCI under procurement</li></ul>OSX-4: <br /><ul><li>Production capacity of 100 kbpd and storage of 1.3 Mbbl
  193. 193. Order placed for Leasing contract and EPCI under procurement</li></ul>Secured Production Equipment<br />34<br />
  194. 194. OGX Strategy to Expedite Production<br />Available Drilling Resources<br />Pre-Drilling Strategy<br /><ul><li>Expedite drilling process and accelerate production ramp-up
  195. 195. OGX plans to drill on average five horizontal wells prior to the arrival of the WHPs from semi-submersible rigs
  196. 196. Upon arrival of each WHP, pre-drilled wells should ramp-up plateau production in approximately three quarters</li></ul>Ocean Lexington (Diamond):<br /><ul><li>Daily Rate: US$ 335k
  197. 197. Max. well depth: 20,000 ft
  198. 198. Contract Expires: Feb.2013
  199. 199. (+ one optional year)</li></ul>Ocean Ambassador (Diamond): <br /><ul><li>Daily Rate: US$ 260k
  200. 200. Max. well depth: 20,000 ft
  201. 201. Contract Expires: Sep.2012 (+ one optional year)</li></ul> <br /><ul><li>Given the significant number of discoveries and their similarities, OGX has the benefit of accelerating the procurement process through the use of Flex FPSOs
  202. 202. Flex FPSOs have capacity of processing oil for a broader range of APIs and GOR (gas/oil ratio)
  203. 203. Standard design (same characteristics for all FPSOs)
  204. 204. Capitalizes on economies of scale</li></ul>Flex FPSOs<br />Ocean Quest (Diamond):<br /><ul><li>Daily Rate: US$ 270k
  205. 205. Max. well depth: 25,000 ft
  206. 206. Contract expires: Dec.2012 (+ one optional year)</li></ul>Ocean Star (Diamond):<br /><ul><li>Daily Rate: US$ 310k
  207. 207. Max. well depth: 25,000 ft
  208. 208. Contract Expires: Feb.2013 (+ one optional year)</li></ul>Pride Venezuela (Pride):<br /><ul><li>Daily Rate: US$ 235k
  209. 209. Max. well depth: 20,000 ft
  210. 210. Contract Expires: Nov.2013</li></ul>Sea Explorer (Pride):<br /><ul><li>Daily Rate: US$ 220k
  211. 211. Max. well depth : 20,000 ft
  212. 212. Contract Expires: Nov.2013</li></ul>35<br />
  213. 213. Campos Basin: Oil Production Ramp-Up<br />150<br />CAGR : 174%<br />Oil Production Target (kbpd) ¹<br />50<br />20<br />2011<br />2012<br />2013<br />Note:<br />1 To be reached through the end of the period<br />36<br />
  214. 214. Parnaíba Basin: Business Plan<br />Project 1 1stgas: 2H12<br />23 production wells<br />Parnaíba Complex<br /><ul><li>Declaration of commerciality of two fields (Gavião Real & GaviãoAzul) already submitted to ANP
  215. 215. Initial production expected in 2H12
  216. 216. Low capital and operating costs
  217. 217. Production of 5.7 M m³per day in 2013 (2.7 M m³per day net to OGX S.A. or ~15 kboepd)
  218. 218. Second seismic crew contracted to work on the southern blocks
  219. 219. Recently approved leasing agreement of 2 additional rigs
  220. 220. Gas to be sold to MPX Power Plants
  221. 221. MPX has obtained an additional 1,859 MW of installation license, totaling 3,722 MW
  222. 222. MPX Parnaíba thermoelectric complex will reach a total capacity of 1,500 MW
  223. 223. Energy generated by MPX’s power plants will be sold to the energy markets</li></ul>Gavião Azul <br />Gavião Real <br />Legend:<br /> Seismic Lines<br />37<br />
  224. 224. Parnaíba Basin: Project Development<br />Parnaíba Development Schematic<br />Gas Thermal Power Plant Development<br />OGX Maranhão (70%) + Petra (30%) investments<br />MPX + Petra investments<br />Capex field life<br /><ul><li>Total drilling cost: US$ 340 M (includes re-completion cost)
  225. 225. Total facilities1 cost: US$ 110M</li></ul>Production Facility <br />for Dry Gas<br />Gas Thermal Power Plant<br />Short Gas Pipeline(<2 km)<br />Opex field life 2<br /><ul><li>Less than US$ 0.30/1,000 cubic feet </li></ul>Lines<br />Transmission Lines<br />Manifolds<br />Wells<br />Gathering System<br />Notes:<br />1 Facilities cost includes: gathering system (lines and manifolds), a production facility for dry gas and a very short pipeline<br />2 Includes operating and maintenance of production facilities, lines, gas pipelines and wells<br />38<br />
  226. 226. Production Targets<br />OGX Production Targets<br />OGX Offshore Equipment Demand<br />19 units<br />12 units for <br />Campos Basin discoveries<br />In kboepd<br />FPSO<br />24 units <br />11 units for <br />Campos Basin discoveries<br />WHP<br />5 units<br />expected to be used in the<br />Espírito Santo Basin <br />(the only deep water blocks in OGX’s portfolio)<br />TLWP<br /><ul><li>Portfolio potential of 10.8 bn of recoverable boe: >10 years of production growth
  227. 227. Campos and Parnaíbadiscoveries (4.2 bnboe) can support 730,000 boepd of production level
  228. 228. Additional potential resources (6.6 bnboe) would allow OGX to reach and sustain a plateau of 1.4 million boepd from 2019 and beyond
  229. 229. Expected demand of 48 offshore units
  230. 230. Total of 23 units estimated for OGX’s Campos Basin discoveries (12 FPSOs and 11 WHPs)
  231. 231. Strategy to expedite development with production equipment contracted 2-3 years in advance</li></ul>39<br />
  232. 232. Financial Overview<br />
  233. 233. OGX Financial Sources and Uses (2Q11 – 4Q13)<br />Financial Sources and Uses<br />Notes:<br />¹ Includes net financial results<br />² Represents 40% of Exploration capex (contemplating all OGX basins) and 60% of Development capex (contemplating Campos and Parnaíba discoveries only)<br />41<br />
  234. 234. Appendix<br />
  235. 235. OngoingActivities<br />Parnaíba Basin<br />Campos Basin<br />Santos Basin<br />OGX Blocks Oil & Gas Fields<br />1OGX Maranhão has 70% W.I<br />43<br />
  236. 236. Concluded Wells (1 of 3)<br />Concluded Wells (1 of 4)<br />44<br />
  237. 237. Concluded Wells (2 of 4)<br />45<br />
  238. 238. Concluded Wells (3 of 4)<br />¹ OGX Maranhão has 70% W.I. ² OGX has 50% W.I. and Maersk is the operator <br />46<br />
  239. 239. Concluded Wells (4 of 4)<br />¹ OGX Maranhão has 70% W.I. ² OGX has 50% W.I. and Maersk is the operator <br />47<br />
  240. 240. Campos Basin: Typical Production Project<br />Typical Replicable Project Assumptions Campos Basin<br /><ul><li>Distance from shore: 80 km
  241. 241. Water depth: 100 to 150 meters
  242. 242. Recoverable volume: 500 million bbl (low Gas:OilRatio (GOR)): all gas produced will be used for power generation or gas reinjection, if applicable
  243. 243. Equipment oil producing capacity:
  244. 244. 1 FPSO: 100 Kbblpd
  245. 245. 1 WHP: 30 wells
  246. 246. Drilled wells:16 horizontal production wells and 9 injection wells
  247. 247. 5 horizontal production wells pre-drilled from semi-submersible rig
  248. 248. 11 production and 9 injection wells drilled from WHP
  249. 249. Capex:estimated unit cost of approximately US$ 2 / barrel
  250. 250. Pre-drilled wells = US$ 50M (75 days per well)
  251. 251. WHP drilled wells = US$ 20M (75 days per well)
  252. 252. Well completion = US$ 15M (30 days per well)
  253. 253. Package of sub-sea flow lines = US$ 65M
  254. 254. Opex:estimated unit cost lower than US$ 16 / barrel
  255. 255. Leased equipment day rates with high local content (FPSOs US$ 350k / day & WHPs US$ 160k /day)
  256. 256. Operating and maintenance expenditures of US$ 85k / day
  257. 257. Variable operating costs of US$ 3.5 / barrel
  258. 258. Abandonment costs at end of field life of US$ 100M
  259. 259. Production profile:
  260. 260. Achieve production plateau in 3 quarters
  261. 261. Plateau maintained for an additional 4 years
  262. 262. 20 to 22 years of production decline from the plateau thereafter</li></ul>48<br />
  263. 263. OGX IR Contacts:<br />+ 55 21 2555 6237<br />