2012 RESULTS PRESENTATIONRio de Janeiro | March 27, 2013
2012 HIGHLIGHTS
1
2012 HIGHLIGHTS AND SUBSEQUENT EVENTS
3
OGX reaches production stage:
OGX hit a historical milestone in 2012 initiating oil production, only 4 years after its creation. Production in the Tubarão Azul Field reached
3.2 million barrels and 2.4 million barrels were sold in 2012
OGX posted revenues for the first time of R$325 million
Efficient development of the Tubarão Martelo Field; six production wells drilled and lower completed
Commercial gas production in the Gavião Real Field started in January 2013
Important advances in exploration campaign:
Three more fields declared commercial in the Campos Basin within the Pipeline and Fuji-Illimani accumulations; Bom Jesus accumulation
(Gavião Branco Field) in Parnaíba Basin (onshore) declared commercially viable
New Discovery Evaluation Plans (PAD) submitted for other accumulations in the Campos and Santos basins
Further oil discoveries such as Tulum and Viedma in Campos Basin and a gas discovery in Parnaíba Basin (Fazenda Chicote)
Reassessment of initial estimates:
Production in the first two producing wells in Tubarão Azul stabilized at a rate of 5,000 boepd per well in 2012
Third production well in Tubarão Azul connected in January 2013 has not stabilized yet, while the first two wells are jointly producing
slightly below 10,000 boepd on average in 2013
OGX fully prepared to continue to develop the business in 2013:
Development of recently acquired stake in Block BS-4, in Santos Basin
Planned capex of US$1.3 billion to leverage OGX’s asset portfolio
Opportunities to reshuffle the base through asset divestment, acquisition of new assets and strong partnerships
FINANCIAL & OPERATIONAL HIGHLIGHTS
2
5
FINANCIAL HIGHLIGHTS
First revenue stream achieved in 2012
KEY FINANCIAL METRICS 4Q 2012 2012
Revenues (R$ mm) ¹ 175 325
EBITDA – Pro forma (R$ mm) (38) (343)
Net Profit (Loss) (R$ mm) (286) (1,173)
Realized oil price per barrel (US$) ¹ 104 99
CAPEX (R$ mm) (1,150) (4,336)
Cash Position (US$ mm) 1,655 1,655
Production volume (kboepd) 10.2 9.8 ²
Revenues of R$325 million booked in
2012 from 3rd and 4th offloads
Delivery of 2.4 million barrels in 2012
and 1.2 million barrels in 1Q13
Cash position of R$3.4 billion
(~US$1.7 billion) as of December 31,
2012
Average production volume of 9.8
kboepd in the year
Notes:
¹ Refers to the cargos booked as revenues after the Extended Well Test (EWT) conclusion and the Declaration of Commerciality
for the Tubarão Azul Field
² Production volume from January 31, 2012 to December 31, 2012
Disciplined cash management focused on maintaining flexibility for ongoing operations and
additional opportunities
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Notes:
¹ Considers average exchange rate equivalent to: BRL 1.77/USD (1Q12); BRL 1.96/USD (2Q12); BRL 2.03/USD (3Q12); BRL 2.06/USD (4Q12)
² Considers end of period exchange rate equivalent to: BRL 1.88/USD (4Q11); BRL1.82/USD (1Q12); BRL 2.02/USD (2Q12); BRL 2.03/USD (3Q12); BRL 2.04/USD (4Q12)
³ Final stage of GTU assembly and two additional rigs
2,862
1,655
708
394 (2,310)
4Q11 4Q12Financing activities
Operating activities
Investing activities
Cash Flow (US$ million)1,2 Cash Spending – Accrual Basis (US$ million)1
OGX has the option to require controlling shareholder Eike Batista to purchase up to
US$1.0 billion of new common shares of OGX at a price of R$6.30 per share
CASH POSITION
653
460 483 550
567 9
81
5638 52
734
521588 611
1Q12 2Q12 3Q12 4Q12
Capex
SG&A/G&G
Additional Parnaíba Capex³
4Q12 & 2012 OPERATIONAL HIGHLIGHTS: PRODUCTION
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Campos Basin:
907,000 barrels of oil produced in 4Q12 at an average daily production of 10.2 kboepd
Total production volume of 3.2 million boe in the Tubarão Azul Field in 2012
3rd production well in Tubarão Azul Field on-stream since January 4, 2013
Produced more than 3.9 million barrels of oil and delivered six shipments until Feb/13
Average daily cost of ~US$531 thousand per day
Parnaíba Basin:
Concluded the drilling and completion of all 16 production wells planned for the Gavião Real Field
Achieved first gas production at the end of Nov/12 with the commissioning of the Gas Treatment Unit (GTU) in the
Gavião Real Field
Average net gas production of 3.2 kboepd and 5.5 kboepd in January and February 2013, respectively
Production advancing
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OPERATIONAL HIGHLIGHTS: CAMPOS BASIN
Tubarão Azul Field Development
Average Quarterly/Monthly Production (kboepd)
Tubarão Martelo Field Development
Concluded the drilling and lower completion of 6 horizontal
production wells (TBMT-2HP, TBMT-4HP, TBMT-6HP, OGX-
44HP, TBMT-8H and TBMT-10H)
FPSO OSX-3 scheduled to arrive by 3Q13
Tubarão Martelo Field scheduled to come on-stream by 4Q13
Exploration wells drilled
Production wells drilled
Exploration wells drilled
Production wells drilled
BM-C-41
TUBARÃO
AZUL
Effective Production Days
1Q12 2Q12 3Q12 4Q12 Jan-13 Feb-13
OGX-26HP 60 79 57 92 29 28
OGX-68HP - 47 92 92 29 28
TBAZ-1HP - - - - 26 28
Total 60 126 149 184 84 84
Average per offshore well
(kboepd)11.0 9.1 9.3 10.2 4.9 3.8
11.0
9.1 9.310.2
13.2
11.3
BM-C-39
BM-C-40
TUBARÃO
MARTELO
35D
TBMT-10H
TBMT-4HPTBMT-6HP
TBMT-2HP 44HP
TBMT-8H
25
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OPERATIONAL HIGHLIGHTS: PARNAĺBA BASIN
Gavião Real Field Development
Three turbines synchronized as of March 16, 2013;
average net gas production of 5.5 kboepd (0.9 M m³/d)
in February 2013
Available production capacity of up to ~6 Mm³/day;
future available production capacity of up to 7.5
Mm³/day
GTU EBITDA margin of approximately 73% leaves space
for margin increase with full production ramp-up
including final commissioning of two remaining turbines
estimated to be fully operable by March and April 2013,
respectively
3.2
5.5
Jan-13 Feb-13
Average Monthly Production (kboepd)
4Q12 & 2012 OPERATIONAL HIGHLIGHTS: EXPLORATION
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Campos Basin:
Declaration of Commerciality of Pipeline and Fuji-Illimani accumulations (Tubarão Tigre, Tubarão Gato and Tubarão Areiafields)
Submitted PAD for Vesúvio, Viedma, Tulum and Itacoatiara accumulations to ANP
Parnaíba Basin:
Declaration of Commerciality of Bom Jesus accumulation (Gavião Branco Field)
Three new discoveries in the basin:
• 66 meters of net pay gas in Fazenda Chicote accumulation with drill-stem test indicating gas flow rate of 3.2 Mm³/d (AOF)
• 24 meters of net pay gas in Fazenda Santa Isabel accumulation
• 27 meters of net pay gas in São Raimundo accumulation
Santos Basin:
Submitted PAD for Belém, Curitiba and Natal accumulations to ANP
Returned blocks BM-S-57 and BM-S-29 to ANP
Other Basins:
Resuming exploratory campaign in Espírito Santo Basin by drilling two wells in 2013
Plan to commence drilling of first exploration well in Colombia in 1H14
70% success rate in exploratory and appraisal program in 2012
New Fields Declared Commercial
PAD (Discovery Evaluation Plan)
Areas Returned to the ANP
Fields already Declared Commercial
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Santos Basin – New PADsCampos Basin – New Fields and PADs
EXPLORATION HIGHLIGHTS
Notes:
¹ Pending PAD approval from ANP
Accumulation Block Deadline
Natal1 BM-S-59 1H13
Curitiba1 BM-S-58 2H13
Belém BM-S-56 2H13
PADs – Santos Basin
Commitment
- Seismic reprocessing
- Drill-Stem test (OGX-94DA)
- Drill-Stem test (OGX-17)
P90 P50 P10
Tubarão Tigre Pipeline BM-C-41 314 461 675
Tubarão Gato Pipeline BM-C-41 50 71 101
Tubarão Areia Fuji/Illimani BM-C-41 157 291 563
Total 521 823 1,339
Declarations of Commerciality – Campos Basin
Field Accumulation Block
Total estimated volume of oil
in place (mmboe)
COMPANY OUTLOOK
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2013 OUTLOOK
2013 Annual estimate:
~US$1.3 billion
2013 Capex Breakdown
Development
75%
Exploration
25%
2013 Estimated Capex
Development
Tubarão Martelo: Preparing for arrival of FPSO OSX-3
Tubarão Tigre, Tubarão Gato and Tubarão Areia:
Finalizing reservoir engineering
BS-4: First well to be drilled by 2013YE
Exploration
Campos Basin: Three wells committed in PADs by
2H13
Santos Basin: Drill-stem tests and seismic
reprocessing
Parnaíba Basin: ~10 wells in 2013
Espírito Santo Basin: Two wells in 2013
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UPCOMING EVENTS
Other Key EventsEvents by Basin
Third party resources report
Arrival of FPSOs OSX-2 and OSX-3
• Production expected to come on-stream by
2013YE
Campos Basin:
Drill appraisal wells and perform tests as execution of
the PADs
Parnaíba Basin:
Ramp-up of gas production with the commissioning of
the remaining TPP turbine
Continue the exploration campaign with the drilling of
wildcat wells
Santos Basin:
Perform tests as execution of the PADs
Espírito Santo Basin:
Continue the exploration campaign with the drilling of
two wildcat wells
APPENDIX
FINANCIAL STATEMENTS
16Note:
¹ This balance does not include parts of COGS related to depreciation, amortization and royalties that are disclosed in specific lines of the table above
R$ ('000)
INCOME STATEMENT 2012 2011 ∆ 4Q12 4Q11 ∆
Net revenue 325,393 - 325,393 174,707 - 174,707
Cost of goods sold (COGS) ¹ (224,802) - (224,802) (100,203) - (100,203)
Exploration expenses (227,350) (189,775) (37,575) (54,784) (64,618) 9,834
Sales expenses (5,831) - (5,831) (5,831) - (5,831)
General and administrative expenses (210,732) (240,733) 30,001 (52,121) (61,080) 8,959
EBITDA (343,322) (430,508) 87,186 (38,232) (125,698) 87,466
Depreciation (part of COGS) (31,838) (4,504) (27,334) (17,173) (1,465) (15,708)
Amortization (part of COGS) (11,859) (5,938) (5,921) (4,522) (1,768) (2,754)
Stock option (54,663) (56,989) 2,326 (7,372) (34,512) 27,140
Dry/subcommercial wells/areas (691,474) (236,055) (455,419) (231,238) (236,055) 4,817
EBIT (1,133,156) (733,994) (399,162) (298,537) (399,498) 100,961
Financial revenue 265,382 417,322 (151,940) 43,145 71,573 (28,428)
Financial expense (478,790) (216,853) (261,937) (149,637) (83,683) (65,954)
Net financial results (213,408) 200,469 (413,877) (106,492) (12,110) (94,382)
Currency exchange (364,292) (71,644) (292,648) 1,788 (67,453) 69,241
Derivatives 16,385 (122,705) 139,090 (1,909) (40,890) 38,981
EBT (1,694,471) (727,874) (966,597) (405,150) (519,951) 114,801
(-) Income tax 508,595 217,989 290,606 119,444 187,364 (67,920)
Net profit (loss) for the year- Pro forma (1,185,876) (509,885) (675,991) (285,706) (332,587) 46,881
OGX Campos Merger 13,102 - 13,102 - - -
Net profit (loss) for the year- Book value (1,172,774) (509,885) (662,889) (285,706) (332,587) 46,881
Attributed to:
Non controlling interests (34,109) (27,720) (6,389) (12,803) (10,553) (2,250)
Controlling shareholders (1,138,665) (482,165) (656,500) (272,903) (322,034) 49,131
FINANCIAL STATEMENTS
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R$ ('000)
BALANCE SHEET Dec 31, 2012 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011
ASSETS LIABILITIES AND EQUITY
Current assets Current Liabilities
Cash and cash equivalents 3,381,326 5,367,451 Trade payables 925,513 431,931
Marketable securities - 52,290 Taxes, contributions and profit sharing payable 22,894 26,070
Escrow deposits 14,963 39,039 Salaries and payroll charges 58,921 54,507
Taxes and contributions recoverable - 78,137 Loans and financings 84,534 22,301
Derivative financial instruments 26,350 8,879 Derivative financial instruments 1,416 -
Oil inventories 118,027 - Accounts payable to related parties 100,845 96,692
Other credits 94,686 27,934 Other accounts payable 20,096 87,807
3,635,352 5,573,730 1,214,219 719,308
Noncurrent Liabilities
Loans and financings 7,960,166 4,750,113
Provisions 210,887 11,743
8,171,053 4,761,856
Noncurrent Assets Shareholders’ Equity
Inventories 206,511 390,071 Capital stock 8,821,155 8,810,307
Taxes and contributions recoverable 215,311 278,810 Capital reserves 178,793 274,109
Deferred income taxes and social contributions 791,893 282,693 Earnings reserves - -
Credits with related parties 179,454 139,386 Currency translation adjustments 42,571 19,588
Retained earnings (deficit) (1,343,306) (289,444)
Fixed assets 10,027,389 6,172,783
Portion attributed to controlling shareholders 7,699,213 8,814,560
Intangible assets 2,060,438 1,512,724 Portion attributed to non-controlling interests 31,863 54,473
13,480,996 8,776,467 7,731,076 8,869,033
Total Assets 17,116,348 14,350,197 Total Shareholders’ Equity 17,116,348 14,350,197
FINANCIAL STATEMENTS
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R$ ('000)
LOANS AND FINANCING
Balance as of December 31, 2011 (4,772,414)
(-) New fundings (2,536,892)
(-) Accrued interests (608,572)
(-) Currency exchange (714,834)
(+) Interest paid 565,682
(+) Funding costs 39,032
(-) Amortization of funding costs (16,702)
Balance as of December 31, 2012 (8,044,701)
R$ ('000)
FIXED ASSETS
Balance as of December 31, 2011 6,172,783
(+) CAPEX
Campos Basin 2,707,599
Santos Basin 706,817
Parnaíba Basin 477,697
Espirito Santo Basin 49,650
Pará Maranhão Basin 46,902
Colombian Basins -
Corporate 347,511
4,336,175
(+) Borrowing costs 173,136
(+) Asset retirement obligation 146,302
(-) Gross margin EWT (79,644)
(-) Disposals (98)
(-) Depreciation (49,892)
(-) Write off Dry/Subcommercial wells (671,373)
Balance as of December 31, 2012 10,027,389
Recommended