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Management Presentation
July, 2011
2
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.
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.
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.
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.
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.
Disclaimer
3
Agenda
OGX Overview
OGX Portfolio
OGX Operations
Path to Production
Financial Overview
Appendix
Last update: 07/13/11
OGX Overview
World-class E&P portfolio with multi-billion barrels of discoveries mostly in shallow waters and onshore
OGX Positioning
5
Solid cash position to support exploratory commitment and beginning of production
Experienced management team with proved execution capability
All key equipment already secured from leading worldwide suppliers for exploration and initial production
1 2
4 3
OGX Main Accomplishments
6
PROVEN EXECUTION CAPABILITY (FROM CONCEPT TO FIRST OIL IN UNPRECEDENTED TIMING) WITH FULLY ESTABLISHED OPERATIONS COMPRISING MORE THAN 5,000 PEOPLE
OGX Creation
US$1.3 bnraised through an equity Private Placement
21 blocks acquired during the 9th Bidding Round
Jul/07Nov/07
Jun/08
IPO: US$4.1 bn raised
Aug/09
Jan/10
Bond: US$ 2.6bn raised
Beginning of thedrilling campaign
Acquisition of 70% stake in the Parnaíba Assets
Jun/10
High productivity horizontal well
Feb/11
OGX included in the Ibovespa Index
FPSO secured for 20 years
Survey and interpretation of the 3D seismic data
Procurement of all equipment and services necessary to initiate the drilling campaign
Apr/11
5 onshore blocks acquired in Colombia
May/11
OSX-1 and initial production
Oct/11
Sep/09
Updated OGX portfolio to 10.8 bn(1) boe of potential resources
Total investments of US$ 3.2 bn of Drilling Capex and Bonus Signature + US$ 218 M of Seismic Campaign
Total equity raised to date: US$8.0 bn
(1) Calculated by OGX based on potential, prospective and contingent volumes contained in the DeGolyer and MacNaughton Reports
70%100%
Petróleo e Gás Ltda.
61% 39%
(1)
Petróleo e Gás Participações S.A.(Market Capitalization (3): ~ US$30 Billion)
99.99%
Free FloatFree Float
Maranhão Petróleo e Gás Ltda.
66.67% (4)
OGX Ownership and Corporate Structure
7
(1) EBX represented through Centennial Asset Mining Fund LLC (Nevada, USA) (“CAMF”)(2) OGX as operator(3) Market data as of May 17th(4) MPX S.A. holds 33.33%
• Daily traded average volume (1 month):
~ US$184 million
• ~33 thousand investors
• 3rd most representative stock
in Ibovespa index 4.1%
• Most liquid common share
OGX Campos Petróleo e Gás S.A.
30%
99.99%
7 Blocks
7 - Parnaiba (70%) (2)
7 Blocks
5 - Campos (100%) (2)
2 - Campos (50%)
20 Blocks
5 - Santos (100%) (2)
5 - Espirito Santo (50%)5 - PAMA (100%) (2)
5 - Colombia (100%) (2)
100%
Management Organization Structure (1)
HIGHLY SUCCESSFUL AND COMMITTED MANAGEMENT TEAM, COMBINING UNIQUE INTELLECTUAL CAPITAL AND SUPERIOR EXECUTION SKILLS
Oil & Gas CommercializationJoaquim Dib Cohen (32)
Oil & Gas CommercializationJoaquim Dib Cohen (32)
Gen. Exec. OfficerPaulo Mendonça (38)Gen. Exec. Officer
Paulo Mendonça (38)
Exploration OfficerPaulo Mendonça (38)Exploration Officer
Paulo Mendonça (38)General Counsel
José Roberto FaveretGeneral Counsel
José Roberto FaveretCFO
Marcelo TorresCFO
Marcelo TorresProduction Officer
Reinaldo Belotti (34)Production Officer
Reinaldo Belotti (34)
CEOEike Batista
CEOEike Batista
Exploration Campos-ESPaulo Ricardo (28)
Exploration Campos-ESPaulo Ricardo (28)
Reservoir & ReservesRoberto Toledo (31)
Reservoir & ReservesRoberto Toledo (31)
Onshore BasinCelso Martins (34)
Onshore BasinCelso Martins (34)
ProcurementOlavo Foerch (32)
ProcurementOlavo Foerch (32)
DrillingRicardo Juiniti (27)
DrillingRicardo Juiniti (27)
LogisticsBilly Pinheiro (30)
LogisticsBilly Pinheiro (30)
Production DevelopmentJosé Brito (42)
Production DevelopmentJosé Brito (42)
InternationalErnani Posrche (33)
InternationalErnani Posrche (33)
Geological OperationsMoacir Santos (38)
Geological OperationsMoacir Santos (38)
ProductionRicardo Abiramia (24)
ProductionRicardo Abiramia (24)
E&P LaboratoryDolores Carvalho (35)
E&P LaboratoryDolores Carvalho (35)
Applied TechnologyMarcos Amaral (28)
Applied TechnologyMarcos Amaral (28)
New Areas Executive ManagerPaulo de Tarso Guimarães (34)
New Areas Executive ManagerPaulo de Tarso Guimarães (34)
Exploration Santos and Eq. MarginEdmundo Marques (24)
Exploration Santos and Eq. MarginEdmundo Marques (24)
Strategic AlliancesLuiz Reis (45)
Strategic AlliancesLuiz Reis (45)
HSELeandro Leme (31)
HSELeandro Leme (31)
8(1) Parentheses represent years experience in the E&P industry
Highly Qualified Exploration Team
PBR success index
Exploratory Team
Paulo Mendonça led the Petrobras exploration team from 2002 to 2007
Success index in excess of 60% on average offshore Brazil from 2002-2007 whilst at Petrobras
Over 10 billion boe and more than 50 new fields discovered
PROVEN TRACK RECORD HAVING OPENED SEVERAL NEW OIL FRONTIERS, INCLUDING THE PRE-SALT, AND DISCOVERING OVER 50 NEW OIL FIELDS
9
Brazil: Vast Untapped Oil & Gas Potential
10
Country Historical Oil & Gas Production (bn boe)
USA (1900-2010) 440
EX-USSR(1900-2010) 335
SAUDI ARABIA(1938-2010) 145
BRAZIL (1941-2010) 14.5
Source: EIA-DOE, BP Statistical Review of World Energy 2010, Saudi Aramco, UPPSALA University, Petrobras, ANP and OGX analysis
Source: ANP
Still significantly under-explored
Oil & gas in the world
Oil and Gas Discovered Volumes2000 – 2010 (Bn boe)
Source: IHS
Largest oil and gas discoveries in the world
Source: BP Statistical Review of World Energy 2010 & analyst estimates
New provinces could propel Brazil into top reserves holders
Oil Resources - December 2009 (Bn bbl)
% of sedimentary basins under concession
0
10,000
20,000
30,000
40,000
Bn Boe
Brazil
Turkmenistan
Iran
Kazakhstan
China
Russia
Australia
Kuwait
Israel
Saudi Arabia
India
Indonesia
Venezuela
Papua
New Guinea
Ghana
+ 35 bn boe 265
172
138
115
102
100
98
74
44
40
37
33
28
27
15
14
13
Saudi Arabia
Venezuela
Iran
Iraq
Kuwait
Brazil post Tupi
UAE
Russia
Libya
Kazakhstan
Nigeria
Canada
US
Qatar
China
Angola
Brazil
Licensed 4%
BRAZIL’S HISTORICAL UNDER-EXPLORATION UNDERPINS MASSIVE GROWTH OPPORTUNITIES FOR OGX
Unlicensed 96%
OGX Portfolio
34 blocks: 29 blocks in 5 Brazilian sedimentary basins and 5 onshore blocks in 3 Colombian sedimentary basins
Unique portfolio with 10.8 billion potential recoverable barrels of oil equivalent (boer)
OGX’s business plan is based on 4.1 billion barrels already discovered in the shallow waters of the Campos Basin
OGX’s Portfolio
Portfolio
Deep water~1,000m
Shallow water~150m
Shallow water ~120m
Shallow water ~60m
12
Campos Basin: Low Risk, Shallow Water and Large Volumes
5.7 bn bbl of net 3C, net delineation and net mean risked prospective resources, evaluated by D&M (pre-salt not included)
5 blocks operated by OGX (100% owned) and 2 operated by Maersk Oil (50% owned)
Total area of 1,177 km2
Average water depth of ~120m
41 wells drilled
100% success rate
Campos Basin
OGX’S DISCOVERED ACCUMULATIONS CONFIRM A NEW HYDROCARBON PROVINCE IN THE SOUTHERN CAMPOS BASIN
13
14
Santos Basin: High Potential
Santos Basin
1.8 bn boe of net risked prospective resources (POS of 27%), evaluated by D&M
5 blocks operated by OGX (100% owned)
Total area of 820 km²
Average water depth of ~150 m
9 wells drilled
~ 65% success rate
SANTOS BASIN IS ONE OF THE MOST PROMISING EXPLORATORY AREAS IN BRAZIL, WITH SIGNIFICANT POTENTIAL FOR GAS AND LIGHT OIL
NEW FRONTIER BASIN WITH HIGH POTENTIAL FOR GAS PRODUCTION
Parnaíba basin
15
Parnaíba Basin: Major Gas Province
1.0 bn boe of net risked mean prospective resources POS (17%) and net 3C, evaluated by D&M
7 blocks operated by OGX (47% owned)
Total area of 21,500 km²
Monetization of gas through thermoelectric plants to be developed by MPX/Petra (1,863 MW already licensed)
100% success rate (7 wells drilled)
Commerciality declared for 2 accumulations
16
Pará Maranhão Basin: Promising New Frontier
Pará-Maranhão Basin
447 mn boe of net mean risked prospective resources (POS of 21%), evaluated by D&M
5 blocks operated by OGX (100% owned)
Total area of 960 km²
Average water depth of ~60m
1st well to be drilled in 2H11
NEW FRONTIER WITH GEOLOGICAL MODEL SIMILAR TO WEST AFRICA, WHERE SIGNIFICANT DISCOVERIES WERE MADE RECENTLY
17
Espírito Santo Basin: New Frontier in Deep Water
Espírito Santo Basin
817 mn boe of net mean risked prospective resources (POS of 33%), evaluated by D&M
5 blocks operated by Perenco (50% owned)
Total area of 3,620 km²
Average water depth of ~1,000 m
1st well to be drilled in 2H11
THE NEW FRONTIER OF ESPÍRITO SANTO HAS PROVEN TO BE A VERY ACTIVE PETROLIFIC SYSTEM
18
Colombia: Cesar-Ranchería, Middle and Lower Magdalena Valleys: Great Upside Potential
MARACAIBO BASIN
Colombian Basins
1.1 bn boe of net prospective resources and net potential petroleum quantities, evaluated by D&M
5 blocks operated by OGX (100% owned), 3 of which are located close to Maracaibo Basin (~80 bn boe discovered and ~50 bn boe already produced)
Beginning of the Seismic Campaign in 2H11
BALANCED PORTFOLIO OF EXPLORATORY ASSETS, COMBINING PRODUCTION REGIONS WITH LESS EXPLORED AREAS NEXT TO THE MARACAIBO BASIN, ONE OF THE MOST PROLIFIC PROVINCES IN THE WORLD
OGX Portfolio Potential: Breakdown
79%Oil
21%Gas
73%ShallowWater
19%Onshore
8%Deep
Water
Portfolio Breakdown
OIL DISCOVERIES OF 4.1 BN BBL ARE ALREADY UNDER PRODUCTION DEVELOPMENT IN THE SHALLOW WATERS OF CAMPOS BASIN
OGX Portfolio Potential(1)
billion boe (7)OGXNet
CAMPOS 5.7 Contingent (2) 3.0 Delineation (3) 1.3 Prospective (POS = 56.2%) 1.4SANTOS (4)(6) (POS = 27.0%) 1.8ESPÍRITO SANTO(4) (POS = 32.6%) 0.8PARÁ-MARANHÃO(4) (POS = 21.3%) 0.4PARNAÍBA 1.0 Contingent (2) 0.1 Conventional Prospective (POS = 16.5%) 0.6 Unconventional Prospective (POS = 18.2%) 0.4 COLOMBIA 1.1 Prospective (POS = 10.4%)(4) 0.1 Potential Petroleum Quantities(5) 1.0 OGX Portfolio 10.8
19
Note: “POS “ defined as geological probability of success(1) The OGX portfolio potential was calculated by OGX based on volume estimates contained in the DeGolyer and MacNaughton Reports(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(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(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(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
OGX Operations
BCH-05E (BCH):Daily Rate: US$ 31.5kMax. well depth: 11,500 ftContract Expires: Feb.2012
3rd rig being contracted
Onshore Drilling
Exploration Drilling Campaign
Offshore Drilling
Ocean Lexington (Diamond):Daily Rate: US$ 335kMax. well depth: 20,000 ftContract Expires: Feb.2013 (+one optional year)
Ocean Ambassador (Diamond): Daily Rate: US$ 260k Max. well depth: 20,000 ft Contract Expires: Sep.2012 (+ one optional year)
Ocean Quest (Diamond):Daily Rate: US$ 270kMax. well depth: 25,000 ftContract expires: Dec.2012 (+ one optional year)
Sea Explorer (Pride):Daily Rate: US$ 265kMax. well depth : 20,000 ftContract Expires: Nov.2011 (+two optional years)
Ocean Star (Diamond):Daily Rate: US$ 310kMax. well depth: 25,000 ftContract Expires: Feb.2013 (+ one optional year)
Pride Venezuela (Pride):Daily Rate: US$ 265kMax. well depth: 20,000 ftContract Expires: Nov.2011
Ocean Scepter (Diamond):Daily Rate: US$ 135kMax. well depth: 30,000 ftContract Expires: Jan.2012 (+one optional year)
Wildcat + Appraisal Wells 2009 2010 2011 2012 2013 Total
Campos 5 18 18 4 0 45Santos 1 6 3 4 0 14
Espírito Santo 0 0 2 3 1 6 Pará Maranhão 0 0 3 3 1 7
Parnaíba 0 2 9 4 0 15Total 6 26 35 18 2 87
DRILLING CAMPAIGN EXPANDED – 8 RIGS ALREADY OPERATING SIMULTANEOUSLY 21
QG-1 (Queiroz Galvão):Daily Rate: US$ 28kMax. well depth: 14,750 ftContract Expires: Jan.2012
FIRST CLASS SUPPLIERS
HIGH QUALIFIED TEAM
LOGISTICS OPERATIONAL SUPPORT
PLATFORM SUPPLY VESSEL (PSV)
QUANTITY:5
CONTRACTOR: EDISON CHOUEST/ TIDE WATER
ANCHOR HANDLING TUG SUPPLY (AHTS)
QUANTITY: 6
CONTRACTOR: EDISON CHOUEST/NORSKAN/MAERSK
FAST SUPPLY VESSEL (FSV)
QUANTITY: 1
CONTRACTOR: EDISON CHOUEST
MID SIZE HELICOPTER
QUANTITY: 4
CONTRACTOR: AERÓLEO
OGX Team: ~250 employees
Over 5,000 people dedicated
3D Room / IOSC
22
Operational Capabilities and Structure
EFFICIENCY,
AGILITY AND
OPERATIONAL
SECURITY
Path to Production
Campos Exploratory Drilling Strategy and Results
24
1st phase strategy (from Mar/08 to Dec/10)
Seismic campaign to better image the areas and reduce risks
Discover the maximum amount of oil
19 wells drilled 1
2nd phase strategy (from Dec/10 to Mar/13)
18 wells drilled 2
Focus on the appraisal drilling campaign to delineate existing discoveries
Continue exploratory program with drilling of wildcat wells
Begin production in October 2011
Drilling of 37 wells with hydrocarbons
OGX analysis supports recoverable resources of
4.1 billion barrels
Oil columns of up to ~250 meters
Net pay up to ~150 meters
Well results confirm OGX’s geological models for
the Campos Basin
DSTs (drill stem tests) support conservative
production estimate of 10 – 20 kbpd
One of the best DSTs ever performed in Brazil,
with a production potential of 40,000 barrels per
day
OGX production estimates are supported by
results from other fields in Campos using current
technology
Drilling Strategy Drilling Results
Notes:1 Number of wells concluded in 2010 and included in D&M’s reports2 Number of wells concluded in 2011
OGX wildcat wells OGX appraisal wells
Appraisal Wells
Campos & Parnaíba Basins: 2011 Appraisal Activities
100% SUCCESS RATE IN THE CAMPOS AND PARNAÍBA BASINS BEGINNING PRODUCTION IN AN UNPRECENDENTED TIMEFRAME
25
OGX-35D Albian-Cenomanian: 80m ¹
OGX-36D/OGX-39HP
Albian: 60m
OGX-40D Albian: 107m
OGX-41D /OGX-44HP Albian: 92m
OGX-42D Albian: 82m
OGX-43D Albian: 50m
OGX-45D
OGX-48
Albian: 12m
OGX-50D
OGX-53
Campos Basin Parnaíba Basin
Appraisal Wells
OGX-38
Devonian: 43m
OGX-46D
Devonian: 15m
OGX-49
OGX-51DP
OGX-46D
OGX wildcat wells OGX appraisal wells
Note:1 Net pay
26
Campos Basin: Development Business Plan
Project 1 Waimea Complex
1st oil date: October 2011
42 development wells28 production 14 injection
3 FPSOs and 2 WHPsOSX-1, OSX-2 and WHP-1
Oil of 20° APIWater depth: 140mAverage production per well 10 – 20 kbpd
Project 2Waikiki Complex 1st oil date: 4Q13
22 development wells14 production 8 injection
1 FPSO and 1 WHPOSX-3 and WHP-2
Oil of 23° - 28° APIWater depth: 120mAverage production per well 15 – 20 kbpd
Campos Basin Development Plan
4.1 bn bbl
Shallow waters
Average production per well
10 – 20 kbpd
12 FPSOs and 11 WHPs
5 FPSOs and 2 WHPs already
secured
Average field life
Capex US$ 2/bbl
Opex <US$ 16/bbl
Illustrative
Initial Projects
27
Campos Basin: OGX-26 - First Production Well
THE RESULTS OBTAINED IN THE DRILLING OF THIS WELL VALIDATE THE GEOLOGICAL MODEL AND CONFIRM THE RELEVANCE OF THE CARBONATE PROVINCE DISCOVERED BY OGX IN THE SOUTHERN PART OF THE CAMPOS BASIN
OGX will begin production by Oct/11 with an extended
well test (EWT) in the Waimea accumulation (OGX-26)
producing up to 20,000 barrels per day
OGX-26 is located in the shallow waters in the Campos
Basin (134m) and 84 km off the coast
One of the best drill-stem tests ever performed in Brazil,
which confirmed an excellent productivity index (PI) of
100 m3/day/kgf/cm2
Production potential of 40,000 barrels per day in
definitive development phase
Oil gravity of 20⁰ API
State-of-the-art drilling technology: 1,000 meters of
horizontal extension
Production concept for this well utilizes off-the-shelf
technology
Confirms high productivity in the Campos carbonates
1,000 m
Campos Basin: OGX-26 Defined Production Concept
28
Production concept
Horizontal Well (OGX-26) already drilled and successfully tested
Well completed and wet christmas tree installed
Buoy anchor system and flexible lines already delivered
Extended Well Test (EWT) approved by ANP (National Petroleum Agency)
FPSO (OSX-1) arrival expected by mid-2011
All critical equipment and services already secured
Two additional horizontal production wells to be connected in 2012
OSX - 1
EWT WILL HAVE A WET CHRISTMAS TREE AND FLEXIBLE LINES DIRECTLY CONNECTED TO THE FPSO OSX 1 ‐AND AN OIL FLOW RATE OF UP TO 20,000 BARRELS PER DAY
Aker Wayfarer Vessel
Wet Christmas Tree
Flexible Lines
FPSO OSX-1
Campos Basin: Equipment Secured
29
Equipment
Wet Christmas Tree (WCT): Already installed
Umbilical Terminal Assembly (UTA): Contracted
Hydraulic Power Unit (HPU): Delivered in April, 2011
Flexible Lines: Contracted with Wellstream
Electrical Submersible Pump (ESP): Contracted with Baker
Services
Installation Vessel – Anchor System, Flexible Lines and Umbilicals: Contracted with WS and Aker
Mud line and Subsurface analysis for FPSO mooring and WHP piles: Contracted with FUGRO – already completed
Waimea Area Survey: Contracted with FUGRO
Critical equipment and services status Main equipment in place
80 kbpd of processing capacity & 950,000 barrels of storage capacity
Expected arrival: Mid 2011
Already installed
Produced by GE Oil & Gas
Already manufactured
Produced by Wellstream
Contracted with Aker
Campos Basin: Replicable Development Concept
Operational Expenditures(Leased Equipment)
Capital Expenditures
FPSOOil capacity: 100 K bpd
Liquid capacity: 160 K bpdOil will be offloaded
WHPCapacity: 30 wellsDrilling package ontopside
Drilling + CompletionDevelopment wells with dry completionGas will be reinjected, used for gas lift or power generationWater Injection
WHP Subsea Flow LinesPower line
Gas Lift lineService line
Water Injection lineProduction line
Test line
30
Opex<US$ 16/bbl
CapexUS$ 2/bbl
Note: Please see details in the Appendix slide: “Campos Basin: Typical Production Project”
FPSOs and WHPs Expected Deliveries
OSX-1 to be delivered in August 2011
OSX-2 and OSX-3 to be built in world-class Singaporean shipyards by SBM and Modec
OSX-4 and OSX-5 hulls already acquired by OSX
OSX-1
OSX-2
OSX-3
OSX-4
OSX-5
OSX-6
OSX-7
OSX-8
OSX-9
OSX-10
OSX-11
OSX-12
Unit 2011 … 2013 2014 2015 2016
WHP-1 and WHP-2 with detailed engineering ongoing (EPC awarded to Techint by OSX)
Unit 2013 2014
WHP-1
WHP-2
WHP-3
WHP-4
WHP-5
WHP-6
WHP-7
WHP-8
WHP-9
WHP-10
WHP-11
3rd Q
1st Q
1st Q
4th Q
1st Q
3rd Q
4th Q
4th Q
4th Q
2nd Q
3rd Q
2nd Q
1st Q
2nd Q
3rd Q
4th Q
4th Q
4th Q
1st Q
2nd Q
3rd Q
4th Q
4th Q
WHPsFPSOs
31Production equipment allocated to begin operations until 2013
Waimea
Waimea
Waikiki
Waikiki
Waimea
2014
Secured Production Equipment
FPSOs WHPs
OSX-1: Production capacity of 80 kbpd and storage of 950 kbbl Average Day rate of US$ 263 kArrival expected to Aug/11
OSX-2: Production capacity of 100 kbpd and storage of 1.3 Mbbl Expected Average day rate of US$ 290 kEPCI contract executed by OSX and SBM
OSX-3: Production capacity of 100 kbpd and storage of 1.3 Mbbl Expected Average day rate of US$ 290 kLOI already signed by OSX with MODEC
WHP-1: Capacity to drill up to 30 wellsFour production wells on-stream by the end of 2013Detailed engineering ongoing (EPC awarded to Techint by OSX)
WHP-2: Capacity to drill up to 30 wellsThree production wells on-stream by the end of 2013Detailed engineering ongoing (EPC awarded to Techint by OSX)
OSX-4: Production capacity of 100 kbpd and storage of 1.3 Mbbl Order placed for Leasing contract and EPCI under procurement
OSX-5: Production capacity of 100 kbpd and storage of 1.3 Mbbl Order placed for Leasing contract and EPCI under procurement
Two sister VLCC´s (Very Large Crude Oil Carriers) purchased on November, 2010 by OSX to be converted into FPSOs
32
OGX Strategy to Expedite Production
33
Expedite drilling process and accelerate production ramp-up
OGX plans to drill on average five horizontal wells prior to the arrival of the WHPs from semi-submersible rigs
Upon arrival of each WHP, pre-drilled wells should ramp-up plateau production in approximately three quarters
Pre-Drilling Strategy Available Drilling Resources
Ocean Lexington (Diamond):Daily Rate: US$ 335kMax. well depth: 20,000 ftContract Expires: Feb.2013
(+ one optional year)
Ocean Ambassador (Diamond): Daily Rate: US$ 260k Max. well depth: 20,000 ft Contract Expires: Sep.2012 (+ one optional year)
Ocean Quest (Diamond):Daily Rate: US$ 270kMax. well depth: 25,000 ftContract expires: Dec.2012 (+ one optional year)
Sea Explorer (Pride):Daily Rate: US$ 265kMax. well depth : 20,000 ftContract Expires: Nov.2011 (+ two optional years)
Ocean Star (Diamond):Daily Rate: US$ 310kMax. well depth: 25,000 ftContract Expires: Feb.2013 (+ one optional year)
Pride Venezuela (Pride):Daily Rate: US$ 265kMax. well depth: 20,000 ftContract Expires: Nov.2011
Given the significant number of discoveries and their similarities, OGX has the benefit of accelerating the procurement process through the use of Flex FPSOs
Flex FPSOs have capacity of processing oil for a broader range of APIs and GOR (gas/oil ratio)
Standard design (same characteristics for all FPSOs)
Capitalizes on economies of scale
Flex FPSOs
Campos Basin: Oil Production Ramp-Up
34
Equipment (Physical Delivery) OSX-1 (3Q11) - OSX-2 (2Q13)
OSX-3 (3Q13)
Project: Equipment (First Oil) Waimea: OSX-1 (Oct/11) Cont’ Waimea: OSX-1 Waimea: OSX-2 (3Q13)
Waikiki: OSX-3 (4Q13)
Additional Horizontal Production Wells On-stream
1 (OGX-26) 2 7
# of Cumulative Horizontal Wells On-stream
1 3 10
Installed Production Capacity 80 Kbpd 80 Kbpd 280 Kbpd
Oil Production Target (kbpd) ¹
50
20
150
2011 2012 2013
CAGR : 174%
Note:1 To be reached through the end of the period
35
Parnaíba Basin: Development Business Plan
Parnaíba Development
2 fields (Gavião Real & Gavião Azul)
1 production complex
Declaration of commerciality of two fields
already submitted to ANP
Initial production expected in 2H12
Low capital and operating costs
Total Capex of approximately of US$
450 M for production of 5.7 M m³per
day in 2013 (2.7 M m³per day net to
OGX S.A. or ~15 kboepd)
Low operating field life cost of less
than US$ 0.30/1,000 ft³ on average
Gas to be sold to MPX power plants
Energy generated by MPX’s power plants
will be sold to the energy markets
Project 1 1st gas: 2H12
23 production wells
Illustrative
OGX-46D
Wells
36
Parnaíba Basin: Project Development
MPX + Petrainvestments
OGX Maranhão (70%) + Petra (30%) investments
Manifolds
Short Gas Pipeline(<2 km)
Gas Thermal Power Plant
Transmission Lines
Production Facility for Dry Gas
Gathering System
Lines
A site to construct a power
plant in the PN-T-68 block has
already been acquired by
MPX
MPX has obtained an
installation license for 1,863
MW and an environmental
license for the development
of an additional 1,859 MW,
totaling 3,722 MW
Parnaíba Development Schematic Gas Thermal Power Plant Development
Capex field life
Total drilling cost: US$ 340 M (includes re-completion cost)
Total facilities1 cost: US$ 110M
Opex field life 2
Less than US$ 0.30/1,000 cubic feet
Notes:1 Facilities cost includes: gathering system (lines and manifolds), a production facility for dry gas and a very short pipeline2 Includes operating and maintenance of production facilities, lines, gas pipelines and wells
37
Production Targets
OGX Production Targets OGX Offshore Equipment Demand
FPSO
19 units12 units for Campos Basin discoveries
TLW
PW
HP
5 unitsexpected to be used in theEspírito Santo Basin (the only deep water blocks in OGX’s portfolio)
24 units 11 units for Campos Basin discoveries
Portfolio potential of 10.8 bn of recoverable boe: >10 years of production growth
Campos and Parnaíba discoveries (4.2 bn boe) can support 730,000 boepd of production level
Additional potential resources (6.6 bn boe) would allow OGX to reach and sustain a plateau of 1.4 million boepd from 2019 and beyond
In kboepd
Expected demand of 48 offshore units
Total of 23 units estimated for OGX’s Campos Basin discoveries (12 FPSOs and 11 WHPs)
Strategy to expedite development with production equipment contracted 2-3 years in advance
2011 2012 2013 2015 2019
CAGR : 70%
Campos and Parnaíba discoveries development
CAGR : 174%
20 50165
730
1,380
Long-lead offshore production items already secured (OSX-1, OSX-2 and OSX-3; WHP-1 and WHP-2)
Financial Overview
39
Current cash and proceeds from the recent unsecured notes offering, together with operating cash flows from 2011-2013 of approximately $0.5 -$1.0 billion, will be sufficient to cover OGX’s anticipated capital expenditures of approximately $4.0 - $5.0 billion through 2013, while maintaining liquidity of $1.0 - $1.5 billion
Current cash position of US$ 5.1 billion is sufficient to fund the development of Campos and Parnaíba discoveries until OGX reaches stable positive cash flow in 2014
Notes:1 As of March 31, 20112 Includes net financial results3 Represents 40% of Exploration capex (contemplating all OGX basins) and 60% of Development capex (contemplating Campos and Parnaíba discoveries only)
Financial Sources and Uses
Financial Highlights
$2.5 bn
$2.563 bn
$0.5 – $1.0 bn
($4.0 – $5.0 bn)
$1.0 – $1.5 bn
Current Cash ¹ Unsecured Notes Operating Cash Flows(2011-2013) ²
Capex (2011-2013) ³
Remaining Liquidity
OGX Financial Sources and Uses (2Q11 – 4Q13)
Cash Position of US$ 5.1 bn
US$ 2.563 Billion Notes Offering
40
OGX raised US$ 2.563 billion in a bond issuance in May 26, 2011
Largest non-investment grade offering ever by an O&G company
Final book of demand featured traditional HY investors that do not commonly invest in EM names
After in-depth diligence by the main rating agencies Moody’s, Fitch and S&P, OGX was rated B1, B+ and B with positive outlook
Transaction Highlights Summary of Terms
Investor Breakdown
Issuer: OGX Petróleo e Gás Participações S.A.
Guarantors: Subsidiaries with over 75% of OGX’s resources
Security Description: Senior unsecured notes
Distribution: 144A / Reg-S
Ratings: B1 / B (positive outlook) / B+
Size: US$2.563 billion
Tenor: 7 year NC4
Maturity: June 3, 2018
Coupon: 8.500%
Price: $100.00
Yield to Maturity: 8.500%
Use of Proceeds: Fund the appraisal and development of Campos Basin and other concessions
Europe18%
Ásia 3% Latam 1%
US78%
Appendix
Ongoing Drilling Activities
421OGX Maranhão has 70% W.I
Well Block Prospect Rig Coast Distance Water Depth Status Net Pay
AM OGX-39HP BM-C-41 Pipeline Horizontal Ocean Star 77 Km 128m In progress since 03/25 -
AR OGX-45D BM-C-40 Waikiki – 3 D Ocean Lexington 96Km 109m In progress since 05/04 -
AT OGX-47 BM-S- 59 Maceió Ocean Quest 110 Km 185m In progress since 05/24 Santonian: 51m
AV OGX-49 PN-T-68 Fazenda São José BCH-05 Onshore Block In progress since 06/24 -
AW OGX-50D BM-C-41 Waimea – 3 D Sea Explorer 84 Km 131m In progress since 06/25 -
AS OGX-51DP PN-T-68 Califórnia - 2 DP QG-1 Onshore Block In progress since 06/30 -
AX OGX-52 BM-C-41 Tambora Ocean Ambassador 93 Km 128m In progress since 07/04 -
AY OGX-53D BM-C-41 Waimea – 2D Pride Venezuela 84 Km 132m In progress since 07/10 -
Parnaíba Basin
OGX Blocks Oil & Gas Fields
Campos Basin Santos Basin
Concluded Wells (1 of 3)
43
Well Block Prospect Rig Coast Distance Water Depth Net Pay
A 1- MRK - 2B BM-S-29 Abacate Sovereign Explorer 130 km 100 m Oil &Gas shows
B OGX-1 BM-C-43 Vesuvio Ocean Ambassador 85 km 140 m Eocene: 57m
J OGX-9D BM-C-41 Vesúvio Direcional Ocean Ambassador 87 km 142 m Eocene: 60m
N OGX-13 BM-C-41 Vesúvio Vertical Ocean Lexington 87 Km 138m Eocene: 10m
C OGX-2A BM-C-41 Pipeline Ocean Ambassador 77 km 130 m
Eocene: ShowsCretac.: ShowsAlbian: 100mAptian: 50mBarremian: 15m
G OGX-6 BM-C-41 Etna Ocean Quest 82 km 137 m Albian: 74mAptian: 17m
D OGX-3 BM-C-41 Waimea Sea Explorer 83 km 130 m Albian: 80mApt./Barrem: 50m
I OGX-8 BM-C-41 Fuji Ocean Star 82 km 125 m Albian: 43mAptian: 44m
E OGX-4 BM-C-42 Kilawea Ocean Quest 79 km 150 m Eocene: 17m
F OGX-5 BM-C-43 Krakatoa Ocean Ambassador 79 km 145 mMaastric.: ShowsAlbian: 30mAptian: 20m
H OGX-7A BM-C-42 Huna Ocean Lexington 86 km 152 m Albian: >17mAptian: 35m
K OGX-10 BM-C-42 Hawaii Sea Explorer 79 km 158 mCenomanian: 11mAlbian: >13m Aptian: 40m
L OGX-11D BM-S-59 Natal Ocean Quest 84 km 180m Santonian: 75m
M OGX-12 BM-S-57 Niterói Ocean Star 95 Km 150m -
O OGX-14 BM-C-40 Peró Ocean Lexington 96 Km 104m Albian: 35m & 27m
P OGX-15 BM-C-41 Santa Helena Ocean Ambassador 78km 130m Albian: 32mAptian: 31m
Concluded Wells (2 of 3)
44
Well Block Prospect Rig Coast Distance Water Depth Net Pay
Q OGX-16 PN-T-681 California QG-1 Onshore block Devonian: Gas shows, 23m & 25m (column)
R OGX-17 BM-S-56 Belém Ocean Star 85 Km 136m Albian: 43m
S OGX-18 BM-C-40 Ingá Ocean Lexington 95 Km 105m Santonian: Oil showsAlbian: 12m (Oil column)
T OGX-19 BM-S-58 Aracaju Ocean Quest 112 Km 172m Santonian: 40m
U OGX-20 BM-C-41 Tupungato Ocean Ambassador 84 Km 132mMaastrichtian: 9m & 3mAlbian: 50mAptian: 42m
V OGX-21D BM-C-41 Waimea Direcional Sea Explorer 84 Km 134m Albian: 14m
W OGX-22 PN-T-681 Fazenda São José QG-1 Onshore block Upper Devonian: 49m Lower Devonian: 47m
X OGX-23 BM-S-58 Ilhéus Ocean Quest 107 Km 152m -
Y OGX-24 BM-S-56 Itagi Ocean Star 94 Km 140m -
Z MRK-3/ 4P BM-C-372 Carambola-A Blackford Dolphin 74 Km 134mSantonian: 14mAlbian: 43mAptian: 12m
AA OGX-25/ 27P BM-C-39 Waikiki Pride Venezuela 94 Km 105m Eocene: 8m (gas)Albian-cenomanian: 145m
V OGX-26HP BM-C-41 Waimea Horizontal Sea Explorer 84 Km 134m Albian: 1,000m (horizontal column)
AB OGX-28D BM-C-41 Illimani Ocean Star 80 Km 126m Albian: 24m
AC OGX-29/ 32 BM-C-39 Itaipu Ocean Lexington 86 Km 104m Oil shows
AE OGX-31 BM-C-41 Osorno Ocean Ambassador 79 Km 136m Albian: 48mAptian: 23m
Concluded Wells (3 of 3)
45
Well Block Prospect Rig Coast Distance Water Depth Net Pay
AJ OGX-36D BM-C-41 Pipeline D Ocean Star 77 Km 128m Albian: 60m
AH OGX-35 BM-C-39 Waikiki Direcional Ocean Lexington 89 Km 104m Albian-Cenomanian: 80m
AG MRK-5 BM-C-37 2 Carambola B Blackford Dolphin 80 Km 130m Albian: 17m
AF OGX-33 BM-C-41 Chimborazo Pride Venezuela 84 Km 127m Albian: 42m
AK OGX-37 BM-C-43 Potosi Ocean Ambassador 87 Km 140m Oil Shows
AO OGX-41D BM-C-39 / BM-C-40 Waikiki - 2 D Ocean Lexington 90 Km 110m Albian: 92m
AN OGX-40D BM-C-41 Pipeline - 2 D Sea Explorer 79 Km 130m Albian: 107m
AD OGX-30 BM-S-58 Salvador Ocean Quest 105 Km 151m Albian: 50m
AI OGX-34 PN-T-68 1 Bom Jesus QG-1 Onshore Block Devonian: 23m
AQ OGX-43D BM-C-41 Illimani -1 D Ocean Ambassador 80 km 140 m Albian: 50m
AO OGX-44HP BM-C-39/ BM-C- 40 Waikiki Ocean Lexington 90 Km 110m
Albian-Cenomanian: 1,063m (horizontal column)
AL OGX-38 PN-T-68 1 Fazenda São José BCH-05 Onshore Block Devonian: 43m
AS OGX-46D PN-T-68 1 Califórnia - D QG-1 Onshore Block Devonian: 15m
AU OGX-48 BM-C-41 Pipeline - 4 Ocean Ambassador 75 Km 128m Albian: 12m
AP OGX-42D BM-C-41 Pipeline -3 D Pride Venezuela 78 km 120m Eocene: 6mAlbian: 82m
¹ OGX Maranhão has 70% W.I.
² OGX has 50% W.I. and Maersk is the operator
Campos Basin: Typical Production Project
46
Typical Replicable Project Assumptions Campos BasinDistance from shore: 80 kmWater depth: 100 to 150 metersRecoverable volume: 500 million bbl (low Gas:Oil Ratio (GOR)): all gas produced will be used for power generation or gas reinjection, if applicableEquipment oil producing capacity:
1 FPSO: 100 Kbblpd1 WHP: 30 wells
Drilled wells: 16 horizontal production wells and 9 injection wells5 horizontal production wells pre-drilled from semi-submersible rig11 production and 9 injection wells drilled from WHP
Capex: estimated unit cost of approximately US$ 2 / barrelPre-drilled wells = US$ 50M (75 days per well)WHP drilled wells = US$ 20M (75 days per well)Well completion = US$ 15M (30 days per well)Package of sub-sea flow lines = US$ 65M
Opex: estimated unit cost lower than US$ 16 / barrelLeased equipment day rates with high local content (FPSOs US$ 350k / day & WHPs US$ 160k /day)Operating and maintenance expenditures of US$ 85k / dayVariable operating costs of US$ 3.5 / barrelAbandonment costs at end of field life of US$ 100M
Production profile: Achieve production plateau in 3 quartersPlateau maintained for an additional 4 years 20 to 22 years of production decline from the plateau thereafter
