Closing of the OSX 3 Transaction

Source: www.gulfoilandgas.com 9/12/2014, Location: South America

Oleo e Gas Participacoes S.A. - Em Recuperacao Judicial, in accordance with article 157, paragraph 4 of Brazilian Law No. 6.404/76 and CVM Rule No. 358/02, announces that the closing of the renegotiation of the FPSO OSX 3 charter arrangement and related agreements, which main terms were disclosed by the Company in the Material Fact Notice of December 24, 2013 (OSX 3 Transaction), has been completed on the date hereof.

The OSX 3 Transaction adjusts the parameters for the continuous exploration of the Tubarao Martelo field in an economically viable fashion and for a longer period.

The completion of the OSX 3 Transaction satisfies an important condition precedent for implementation of the restructuring of the OGX Group, as set forth in the Plan Support Agreement executed between the Company and its affiliates with OSX Brasil S.A. - Em Recuperacao Judicial and its affiliates, on December 24, 2013, as disclosed by the Company in the Material Fact Notice of even date, and the Subscription Agreement, dated February 7, 2014, setting forth the terms and conditions for a debtor-in-possession financing, as disclosed by the Company in the Material Fact Notice of even date.

The OSX 3 Transaction mainly comprehends the following changes in the bare boat charter agreement and its ancillary documents:

(i) Reduction of the charter rate to a fixed day rate of $250,000 effective from the date the vessel was delivered, i.e. 19 November 2013;

(ii) Amendments to the rights of OGX Petroleo e Gas S.A. - Em Recuperacao Judicial (OGX) to terminate the bare boat charter agreement ("Charter Contract") to provide OGX with the right to terminate the Charter Contract effective immediately without termination sum, under certain circumstances;

(iii) Inclusion of a buyout right in favor of OGX to buy the Bonds issued by OSX 3 Leasing B.V. (Bonds) in certain circumstances if such Bonds have not been refinanced at or after maturity or if the FPSO OSX 3 has not been sold prior to such date;

(iv) The inclusion of a direct right of the Nordic Trustee ASA (Bond Trustee) to terminate the Charter Contract (a) upon 24 months’ notice in circumstances where the Bonds have not been fully repaid or bought out by 20 March 2015 and (b) upon 45 days’ notice immediately, in circumstances where a non payment event of default has occurred under the Bonds solely as a result of OGX’s failure to pay the charter rate under the Charter Contract (as amended);

(v) The inclusion of certain termination rights for OSX-3 and the Bond Trustee, and the right to increase charter rate of $265,000 instead of $250,000, in certain circumstances if OGX does not provide a letter of credit for $25 million in favor of OSX-3 and the Bond Trustee to secure its obligations under the Charter Contract (callable in the event of a failure by OGX to pay the charter rate under the Charter Contract);

(vi) Inclusion of a right in favor of OGX to replace OSX Serviços Operacionais Ltda. as operator at any time upon 30 days’ prior notice and selection of an appropriate replacement operator;

(vii) Accrued charter rate under the first invoice, from 19 November 2013 to 31 August 2014, to be payable within 3 business days of the closing date (i.e., by September 17, 2014).

The Company will keep its shareholders and the market informed of any further developments on this matter and any other material fact related to its judicial restructuring proceeding.

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