OGX Announces Business Plan for the Campos & Parnaiba Discoveries

Source: www.gulfoilandgas.com 6/6/2011, Location: South America

OGX Petroleo e Gas, the Brazilian oil and gas company responsible for the largest private-sector exploratory campaign in Brazil, announce details of the Company’s business plan for the Campos and Parnaiba discoveries.

"Following OGX’s discoveries and successful appraisal campaign in the Campos and Parnaiba basins, we are pleased to announce our business plan for the development and production of OGX’s resources portfolio. The pro-forma liquidity of approximately US$ 5.1 billion of cash and cash equivalents that we have on hand will enable us to reach stable positive cash flows in 2014 and secure an estimated production of 730,000 boepd by the end of 2015", commented Paulo Mendonça, OGX’s General Executive Officer and Exploration Officer. "We remain confident in our ability to continue executing our exploration and production plan in the coming years, while efficiently managing our cost base", added Mr. Mendonça.

In order to fund its exploration and production activities, OGX raised approximately US$ 8 billion, including US$ 1.3 billion through an equity private placement in 2007, an additional US$ 4.1 billion in the 2008 initial public offering (IPO), and a further US$ 2.563 billion through the senior unsecured notes offering announced on May 26, 2011. Since its IPO, OGX has made the following important achievements in executing its business plan:

- A significant increase in its portfolio’s potential resources from 4.8 to 10.8 billion boe;
- The drilling of 52 wells in the past 20 months with an overall success rate exceeding 90%;
- An increase in the number of concessions from 21 to 34, of which 29 are located in Brazil and five in Colombia;
- The expansion of the Company’s concession acreage from approximately 7,000 km² to 41,000 km²; and
- A growth in the current number of employees to more than 250, while leveraging a total workforce of over 6,100 professionals.

As a result of the Company’s financial discipline, OGX has maintained strong liquidity throughout all of its exploratory activities, with cash and cash equivalents of US$ 2.5 billion as of March 31, 2011. OGX expects that this level of liquidity, plus the US$ 2.563 billion of proceeds from the debt offering and its operating cash flows from production, will enable the Company to fully fund its production development of the discoveries already made and to reach stable positive free cash flows in 2014.

OGX’s successful exploratory campaign has been followed by an intensive appraisal campaign in order to gather more information on the accumulations discovered and optimize the execution of the development plans, which were based on 4.2 billion boe already discovered in the Campos and Parnaiba Basins. Since the beginning of 2011, OGX has focused increasingly on the drilling of wells primarily in the contingent resource and delineation areas with the intent of converting 3C contingent resources into 2C and 1C, and ultimately into reserves.

In the Campos Basin, production will begin in the first project (Waimea complex) in October 2011, with anticipated production of up to 20,000 barrels per day (bpd) from the OGX-26 well. The second project (Waikiki complex) production is expected to begin in the fourth quarter of 2013. In 2013, the Company expects to have three Floating Production Storage Offloading “FPSOs” (OSX-1, OSX-2 and OSX-3) and two Wellhead Platforms “WHPs” (WHP-1 and WHP-2) in place with a total of ten horizontal production wells on-stream in these two projects.

The Company will adopt the best practices in the oil and gas industry in its production in order to avoid reservoir damage. OGX expects to achieve 150,000 bpd of production from the Campos Basin in 2013 in these two production complexes from 10 horizontal wells producing an average of 15,000 bpd each.

In addition to these three FPSOs, OSX has acquired two very large crude oil carriers (VLCCs), which will be converted into two FPSOs (OSX-4 and OSX-5). These equipment will be leased to OGX, with delivery expected in 2014. It is anticipated that both of these FPSOs will have approximately 1.3 million barrels of storage capacity and approximately 100,000 bpd of installed oil processing capacity.

The gas production ramp-up in the Parnaiba Basin is expected to begin in the second half of 2012. OGX has one project covering two accumulations in the PN-T-68 block, which is 46.7% owned by OGX, and is expected to achieve gross production of 5.7 million m3 of natural gas per day (approximately 200 million ft3 of natural gas per day), or approximately 36,000 barrels of oil equivalent per day (boepd) in 2013 (approximately 15,000 boepd net to OGX).

The Company anticipates that the Campos and Parnaiba current discoveries will be sufficient to support a production level of over 730,000 boepd. Considering OGX’s estimated total potential resources portfolio of 10.8 billion boe, the Company forecasts that additional potential projects will enable it to reach a production level plateau of approximately 1.4 million boepd from 19 onwards. By 2019, when it is expected that OGX will utilize a total of 19 FPSOs, 24 WHPs and 5 TLWPs of offshore production equipment to reach the production levels.

"We are excited to begin our production this year in the Campos Basin, having already secured the necessary equipment, staff and funding to produce the already discovered accumulations. In addition to our efforts in the Campos Basin, in April we submitted to the ANP our declaration of commerciality for two accumulations in the Parnaiba Basin, where we currently expect production to begin in the second half of 2012", commented Reinaldo Belotti, OGX’s Production Officer. "At the same time, we continue to plan proactively for the long-term development of our diversified portfolio", added Mr. Belotti.


United Kingdom >>  11/12/2024 - Europa Oil & Gas (Holdings) plc, the AIM quoted UK, Ireland and West Africa focused oil and gas exploration, development and production company, confi...
United Kingdom >>  11/12/2024 - Union Jack Oil plc (AIM: UJO, OTCQB: UJOGF), a UK and USA focused onshore hydrocarbon, production, development, exploration and investment company, co...

Iraq >>  11/10/2024 - The Undersecretary of the Ministry of Oil for Extraction Affairs, Mr. Bassem Mohammed Khader, received today, Sunday, the Executive Director of the Ch...
Iraq >>  11/6/2024 - The Undersecretary of the Ministry of Oil for Extraction Affairs, Mr. Bassem Mohammed Khudair, received today, Wednesday, the General Manager of the "...

United Kingdom >>  11/5/2024 - Well and reservoir management specialist, Exceed, has announced its role in the initial stages of a world leading clean energy project, which could re...
Canada >>  11/4/2024 - Fortuna Operating (“Fortuna”), the operating arm of North Hudson Resources Partners, LP (“North Hudson”) non-operated investment platform, is pleased ...

Related Categories: Camp Building  Cleaning Equipment, Services  Communication  Corrosion Products/Services  Development  Exploration  Food Supplies  General  Labor Services  Land & Leasing  Mine Clearance  Oil & Gas Companies  Production  Service Companies  Skilled Labors  Transportation, 4X4 Trucks  Unskilled Labors  Utility Systems  Waste Disposal  Water Supply Services  Welding Products/Services 

Related Articles: Camp Building  Cleaning Equipment, Services  Communication  Corrosion Products/Services  Development  Exploration  Food Supplies  General  Labor Services  Land & Leasing  Mine Clearance  Oil & Gas Companies  Production  Service Companies  Skilled Labors  Transportation, 4X4 Trucks  Utility Systems  Waste Disposal  Water Supply Services  Welding Products/Services 


Gulf Oil and Gas
Copyright © 2023 ICT All rights reserved. - Terms of Service - Privacy Policy.