2012 Fourth Quarter and Full-Year Results

RIO DE JANEIRO--(BUSINESS WIRE)--OGX Petróleo e Gás Participações S.A. (Bovespa: OGXP3), Brazil’s largest private oil and natural gas exploration company, announces its fourth quarter and full year results for 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

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

Luiz Carneiro, Chief Executive Officer of OGX, commented:

“2012 was a year of both significant achievements and major challenges for OGX. Only four years after its creation, OGX hit a historical milestone in 2012 as it initiated oil production in the Tubarão Azul Field, in the Campos basin. Over the course of the year, we achieved total delivery of 2.4 million barrels from Tubarão Azul, posting revenues for the first time of R$325 million. Building on this in early 2013, we continue to develop with great efficiency the Tubarão Martelo Field, also in the Campos Basin, where we have already drilled and made the lower completion of six production wells, and we also began commercial gas production in the Gavião Real Field, in the Parnaíba Basin, in January 2013.

Alongside these great successes, OGX faced some important challenges. Production levels in the first two producing wells in Tubarão Azul (OGX-26HP and OGX-68HP) stabilized in 2012 at a rate of 5,000 barrels of oil equivalent per day. In January 2013, we connected our third production well in Tubarão Azul, TBAZ-1HP. After roughly three months of production, TBAZ-1HP has not stabilized yet, while the first two wells are jointly producing slightly below an average of 10,000 barrels of oil equivalent per day. We remain absolutely focused on optimizing the total recoverable volume of the field in accordance with industry best practices, but also acknowledge that our estimated volume of recoverable barrels in the field should be reduced.

In parallel to the development of our fields, we made further advances in our exploration campaign, resulting in important oil discoveries such as Tulum and Viedma, also in the Campos Basin. We recently declared three more fields commercial: Tubarão Tigre and Tubarão Gato in the Pipeline accumulation and Tubarão Areia in the Fuji-Illimani accumulation, and we continue our studies on how to best develop them. We also submitted new Discovery Evaluation Plans (PAD) for other accumulations in the Campos and Santos basins, aiming to retain these areas for additional studies and analysis. In our onshore activities, we declared commercial the Bom Jesus accumulation (Gavião Branco Field), in the Parnaíba Basin. Furthermore, we acquired a stake in Block BS-4, in Santos Basin, demonstrating our awareness of accretive business opportunities in Brazil, which we believe will contribute to the growth of our portfolio in the near future.

With a strong portfolio of assets, planned capex of US$1.3 billion in 2013, a team of experienced and energetic professionals and opportunities to reshuffle our base through asset divestment, acquisition of new assets and strong partnerships, OGX is fully prepared to address the challenges ahead as we continue to develop our business."

OPERATIONAL HIGHLIGHTS

Production:

OGX’s production activities are progressing:

• Attained total production volume of 3.2 million barrels of oil in the Tubarão Azul Field (Campos Basin) in 2012 (907 thousand barrels of oil in 4Q12, 9.6% higher than the previous quarter)
• Sale of 2.4 million barrels of oil in 2012, distributed in four different cargos
• Sale of 1.2 million barrels of oil in 2013, distributed in two cargos
• Third production well in the Tubarão Azul Field (Campos Basin), TBAZ-1HP, was connected to FPSO OSX-1 and commenced production on January 4, 2013
• Drilled and made the lower completion of six production wells in the Tubarão Martelo Field (Campos Basin). The first well is projected to come on-stream late 2013 after the arrival of FPSO OSX-3
• Final stage of reservoir engineering for FPSO OSX-2 installation, with delivery scheduled for 2H13
• Concluded the drilling and completion of all 16 production wells planned for the Gavião Real Field (Parnaíba Basin), which are now in the process of connecting to the Gas Treatment Unit (GTU)
• Achieved first gas production at the end of November 2012 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, in the Gavião Real Field

Exploration:

OGX continued its successful exploratory campaign in the fourth quarter.

• Presented Declaration of Commerciality for the Pipeline, Fuji and Illimani accumulations to the National Petroleum, Natural Gas and Biofuels Agency (ANP). The fields will be named Tubarão Gato, Tubarão Tigre and Tubarão Areia, with total estimated volume of oil in place of 823 million barrels of oil (P50)
• Presented Declaration of Commerciality for the Gavião Branco Field (formerly the Bom Jesus accumulation) to the ANP. OGX estimates a total volume in place between 0.2 and 0.5 Tcf of gas for this field
• Submission of Discovery Evaluation Plans (PADs) to the ANP for Vesúvio, Viedma, Tulum and Itacoatiara accumulations in the Campos Basin and for Curitiba, Belém and Natal accumulations in the Santos Basin
• Submitted the winning bid for a block in the Lower Magdalena Valley Basin upon participating in Colombia’s National Agency of Hydrocarbonates (ANH) auction
• Obtained Operator A qualification from the ANP, allowing OGX to operate blocks in deep waters and ultra-deep waters, in addition to shallow waters and onshore

Other:

• Agreement with Petrobras to acquire a 40% participating interest in Block BS-4, located in the Santos Basin in November 2012
• Eike Batista, controlling shareholder of OGX, granted the Company in October 2012 an option to require him to purchase up to US$1.0 billion of new common shares of OGX at a price of R$6.30 per share, conditional upon the Company’s additional capital requirement and the absence of more favorable alternatives
• Issuance of Senior Unsecured Notes with a ten year term for US$1.063 billion in March 2012
• Secured R$600 million bridge loan through its subsidiary OGX Maranhão for the development of the Gavião Real and Gavião Azul fields in January 2012
• New senior management team with extensive experience put in place under Luiz Carneiro, who joined OGX in June, 2012, as the company turns the corner from explorer to producer

SHORT TERM OUTLOOK

Drilling of exploratory wells and current field development

With the end of the exploration concession periods for the Campos and Santos Basins, the Company aims to obtain an extension for the areas which we believe have great potential.

The following table provides details of the areas which we have declared commercial (the Pipeline, Fuji and Illimani accumulations), as well as those for which we have submitted PADs (Vesúvio, Viedma, Tulum and Itacoatiara accumulations in the Campos Basin, and Curitiba, Belém and Natal accumulations in the Santos Basin):

Declarations of Commerciality – Campos Basin
Field	Accumulation	Block(s)	Total estimated volume of oil in place (mmboe)
			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

PADs – Campos Basin
Accumulation	Block(s)	Commitment	Deadline
Vesúvio	BM-C-43, BM-C-42, BM-C-41 and BM-C-38	- 1 appraisal well - Seismic reprocessing	2H13
Viedma^1	BM-C-41, BM-C-38 and BM-C-37	- 1 appraisal well	2H13
Tulum^1	BM-C-37 and BM-C-38	- 1 appraisal well	2H13
Itacoatiara^1	BM-C-39	- Additional geophysics studies	2H13
Peró/Ingá	BM-C-40	- Seismic reprocessing	1H13
Tambora/Tupungato	BM-C-41	- Seismic reprocessing	1H13

PADs – Santos Basin
Accumulation	Block(s)	Commitment	Deadline
Natal^1	BM-S-59	- Seismic reprocessing	1H13
Curitiba^1	BM-S-58	- Drill-Stem test (OGX-94DA)	2H13
Belém	BM-S-56	- Drill-Stem test (OGX-17)	2H13

Notes:

¹Pending PAD approval from ANP

In addition to the areas in the Campos and Santos Basins comprised in the submitted PADs, OGX will also:

• Drill two prospects in the Espírito Santo Basin in 2013, together with Perenco, the operator of the blocks, and ten wells in the Parnaíba Basin
• Continue to develop the Tubarão Martelo field preparing for OSX-3’s arrival and conclude studies for OSX-2’s development area
• Start drilling the first development well in the Atlanta Field (BS-4 Block) in 2H13 using Ocean Star rig from OGX fleet

Capex

After acquiring a stake in Block BS-4, we revised our 2013 capex budget from US$1.2 billion to US$1.3 billion to account for the development of the post-salt field, Atlanta, which is scheduled to commence with the drilling of the first production well in the second half of the year. As the Company gradually reaches the end of its exploration campaign in the Campos and Santos basins, we are downsizing our rig fleet, which reflects a reduction of our 2013 capex, compared with the previous year.

Upcoming Events

OGX has several important events planned for the coming months, including:

• Ramp up gas production with the synchronization of the fourth TPP turbine in the Parnaíba Basin
• Commence the execution of the PADs by drilling appraisal wells and performing tests in the Campos and Santos basins
• Continue the exploration and wildcat campaigns in the Parnaíba and Espírito Santo basins
• Update our resource evaluation report
• Receive the FPSOs OSX-2 and OSX-3 expected to arrive in the 3Q13 and first production wells expected to come on-stream by the end of the year

OPERATIONS REVIEW

PRODUCTION

CAMPOS BASIN

• Total production volume of 3.2 million boe in the Tubarão Azul Field in 2012 (907 thousands boe in 4Q12, 9.6% higher than the previous quarter)
• Sale of 2.4 million barrels of oil in 2012, distributed in four cargos
  • 547 thousand barrels of oil to Shell, in March 2012
  • 247 thousand barrels of oil to Shell, in April 2012
  • 790 thousand barrels of oil to Shell, in July 2012
  • 809 thousand barrels of oil to Reliance, in October 2012
• Sale of 1.2 million barrels of oil in 2013, distributed in two cargos
  • 779 thousand barrels of oil to ENAP, in January 2013
  • 425 thousand barrels of oil to BP, in February 2013
• Connection start-up of the third production well in the Tubarão Azul Field, TBAZ-1HP
• Drilling and lower completion of six production wells in the Tubarão Martelo Field
• Final stage of reservoir engineering for FPSO OSX-2 installation, with delivery scheduled for 3Q13

Tubarão Azul Field Development

Since commencing production on January 31 2012, the Tubarão Azul Field has produced more than 3.9 million barrels of oil and delivered six shipments. Average daily production in the thirteen months of production from January 31, 2012 to February 28, 2013 was 10.2 kboepd, and, in the fourth quarter, average daily production in the first two production wells, OGX-26HP and OGX-68HP, was 10.2 kboepd, in line with expectations and with stable flows rates of above 5.0 kboepd on average per well.

After the first three months of operation, TBAZ-1HP well, the third well connected to FPSO OSX-1, has not stabilized yet, while the first two wells are jointly producing at an average of approximately 10,000 barrels of oil equivalent per day, showing no interference from the TBAZ-1HP well. Based on this result, we believe that the area where TBAZ-1HP is producing demonstrates a higher geological compartmentalization reflected in a lower flow rate compared to the other section of the reservoir. OGX’s technical team is analyzing the reservoir behavior with the data obtained on the TBAZ-1HP’s area to define the next steps on the development of this field.

The Company continues to seek best industry practices in order to optimize the total recoverable volume of the field.

In 2012, we produced 3.2 million barrels of oil and delivered 2.4 million barrels of oil, distributed in four different cargos, with the last shipment of approximately 809 thousand barrels delivered on October 15, 2012 to Reliance Industries Ltd., one of the world's largest refineries and India's largest private company, resulting in sales revenues of R$175 million in 4Q12.

During 2013, we delivered the fifth and the sixth shipments of approximately 779 thousand barrels and 425 thousand barrels, respectively, the first to ENAP (Chile) on January 5, and the last to BP on February 7.

The table below shows the pro-forma OSX-1 EBITDA after the delivery of the six shipments. The table demonstrates that OGX has succeeded in improving its pro-forma EBITDA margin while reducing logistics costs:

Delivered cargos	2012										2013
	1st ¹		2nd ¹		3rd		4th		Total 2012		5th		6th		Overall Total
Delivery Date	03/28/2012		4/21/2012		07/26/2012		10/15/2012				5/1/2013		7/2/2013
Operation Period	51 days		27 days		98 days		80 days				73 days		39 days
Production related to the shipments - in barrels (bbls)	547,376		246,809		789,774		809,495		2,393,454		779,110		425,313		3,597,877
R$ ('000)
Sales Revenues	118,003		55,996		150,686		174,707		499,392		165,000		89,634		754,026
Sales Taxes	-		-		-		-		-		-		-		-
Royalties	(10,687	)	(4,938	)	(14,842	)	(15,772	)	(46,239	)	(15,351	)	(8,685	)	(70,275	)
Leasing	(24,078	)	(13,222	)	(52,708	)	(41,998	)	(132,006	)	(39,116	)	(20,868	)	(191,990	)
OSX Services	(13,944	)	(7,236	)	(28,071	)	(22,499	)	(71,750	)	(25,194	)	(12,471	)	(109,415	)
Logistics	(12,005	)	(7,410	)	(27,795	)	(18,405	)	(65,615	)	(8,355	)	(4,310	)	(78,280	)
Freight cost on sales	-		-		-		(5,831	)	(5,831	)	(3,877	)	(1,577	)	(11,285	)
Others	(871	)	36		(1,183	)	(1,529	)	(3,547	)	(2,394	)	(1,200	)	(7,141	)
EBITDA	56,418		23,226		26,087		68,673		174,404		70,713		40,523		285,640
% EBITDA / Revenues	47.81	%	41.48	%	17.31	%	39.31	%	34.92	%	42.86	%	45.21	%	37.88	%
EBITDA / barrel - (R$/barrel)	103.07		94.11		33.03		84.83		72.87		90.76		95.28		79.39

Note:

¹Sales occurred during the Extended Well Test and before the declaration of commerciality - not accounted in Results and recorded as a reduction of "Fixed Assets"

As shown in the table above, since the delivery of the fourth cargo to Reliance, we were able to resume and improve our pro-forma EBITDA margin, mainly as a result of higher and stabilized production in the first two wells and a better realized oil price.

The following table demonstrates the effective daily rates (in USD) of each of the costs associated with the FPSO OSX-1 operation, related to the operation period in each of the delivered cargos:

Daily Cost (USD '000)	2012										2013
	1st cargo		2nd cargo		3rd cargo		4th cargo		Avg. 2012		5th cargo		6th cargo		Overall Average
Leasing	(268	)	(262	)	(268	)	(259	)	(264	)	(263	)	(263	)	(264	)
OSX Services	(155	)	(143	)	(143	)	(139	)	(145	)	(169	)	(157	)	(151	)
Logistics	(134	)	(147	)	(141	)	(113	)	(134	)	(56	)	(54	)	(108	)
Others	(10	)	1		(6	)	(9	)	(6	)	(16	)	(15	)	(9	)
Total	(567	)	(551	)	(557	)	(520	)	(549	)	(504	)	(489	)	(531	)

As demonstrated in the table immediately above, the daily logistics cost has been reduced mainly as a result of lower diesel consumption in FPSO OSX-1 as the gas produced there is being used as energy in the platform.

The OSX Services (O&M costs), however, showed a slight increase in 2013 due to rental expenses related to the Centrifugal Submersible Pump (CSP) used on the TBAZ-1HP well.

Tubarão Martelo Field Development

Following the declaration of commerciality of the field and OGX’s submission of a Development Plan, the ANP granted the Company authorization to begin drilling the production wells in this field. OGX already drilled and made the lower completion of six horizontal production wells (TBMT-2HP, TBMT-4HP, TBMT-6HP, OGX-44HP, TBMT-8H and TBMT-10H). FPSO OSX-3 is scheduled to arrive by 3Q13 and its first production well is expected to come on-stream by 4Q13.

PARNAÍBA BASIN

• Revenue generation commenced in January 2013, starting with gas dispatch for the synchronization of the first Parnaíba I Thermo Power Plant (TPP) turbine
• Achieved first gas production at the end of November 2012, with the commissioning of the Gas Treatment Unit (GTU)
• Average net gas production of 3.2 kboepd and 5.5 kboepd in January and February, respectively
• Received all necessary licenses to begin natural gas production
• Concluded the drilling and completion of all 16 production wells planned for the project
• Secured R$600 million bridge loan through its subsidiary OGX Maranhão for the development of the Gavião Real and Gavião Azul fields in January, 2012

Gavião Real and Gavião Azul Field Development

In 2012, we had a number of significant achievements in the Parnaíba Basin. OGX began natural gas production in the Gavião Real Field during the commissioning of the GTU in November 2012, hence, becoming the first company to develop a gas production project in this basin. We also started gas dispatch for the synchronization of the first Parnaíba I TPP turbine in January 2013, marking the integration of natural gas production with power generation and initiating the project’s revenue generation.

In a 12-day production period in January and with only one turbine operating, we registered an average net gas production of 3.2 kboepd (0.5 M m³/d), while in February, operating with 2 turbines since February 9^th, we registered an average net gas production of 5.5 kboepd (0.9 M m³/d). The third turbine was synchronized with the system on March 16, 2013.

During 2012, we accelerated the project’s implementation, concluding the construction of the plant and most of the facilities for the GTU operation. We also obtained all necessary licenses (preliminary, installation and operation) authorizing the commencement of natural gas production in the Gavião Real and Gavião Azul fields.

The GTU commissioning was initiated at the end of November 2012, and lasted approximately two months. Performance was in-line with our expectations. In addition, the drilling and completion of all 16 production wells planned for this phase of the project have been concluded, and the wells which are not yet producing are in the process of connection to the GTU. We also concluded the drilling of the water disposal wells, GVR-15D and GVR-16D, which will be completed soon.

The table below shows the pro-forma GTU EBITDA after the first two months of operations. The EBITDA margin of approximately 73% reflects the asset’s profitability, still leaving space for margin increase with the full ramp-up of our production with the final commissioning of the two remaining turbines.

GTU Parnaíba	Jan-13		Feb-13		Total
Operation Period¹	6 days		31 days
OGX Maranhão gas production - in Mm3	3.62		35.42		39.04
R$ ('000)
Revenues²	4,259		18,504		22,763
Sales Taxes³	(433	)	(2,088	)	(2,521	)
O&M	(1,089	)	(1,246	)	(2,335	)
Royalties & Landowners' right	(272	)	(1,038	)	(1,310	)
EBITDA	2,465		14,132		16,597
% EBITDA / Revenue	57.88	%	76.37	%	72.91	%
EBITDA / Mm3 - (R$/Mm3)	681.71		398.97		425.16

Notes:

¹ Closing date for accounting numbers: 25^th day of the month

² Gross revenue composed by gas sales revenue and GTU rental revenue

³ Sales taxes composed by: PIS/COFINS/ICMS

EXPLORATION

CAMPOS BASIN

In 2012, we concentrated our exploration efforts on completing the assessment of the Waimea, Waikiki and Pipeline complexes. Simultaneously, we drilled new prospects, focusing on the BM-C-37 and BM-C-38 blocks, thus far relatively unexplored areas.

Significant progress was made in this basin, resulting in the Declarations of Commerciality of the Pipeline, Fuji and Illimani accumulations, for which the proposed names are Tubarão Tigre, Tubarão Gato and Tubarão Areia fields. OGX estimates a total volume of oil in place of 823 million barrels (P50) for the three fields. Following the submission of the Declaration of Commerciality, we will submit the fields’ Development Plans.

During the fourth quarter, the main focus of OGX’s exploratory campaign was drilling in the BM-C-37 and BM-C-38 blocks, once we received the environmental license in October 2012. With two rigs drilling wildcat wells simultaneously, we concluded the Viedma, Cozumel, Tulum and Cancun prospects. Important discoveries of oil in sandstone reservoirs were made in the Viedma and Tulum prospects, which motivated us to submit PADs to the ANP to continue the assessment of the area’s potential. However, we have not identified the presence of hydrocarbons in Cozumel or Cancun.

Furthermore, we have received from the ANP the approval of the PADs for the Vesuvio, Krakatoa and Honolulu areas, allowing OGX to extend the exploration period for these accumulations. In the meantime, we submitted PADs to the ANP for the Viedma, Tulum and Itacoatiara areas, and are now waiting for the approval for additional time.

For Viedma, we recently received the approval to drill the first appraisal well committed in the PAD and have just commenced drilling in the beginning of March (OGX-109).

PARNAÍBA BASIN

During 2012 we continued to advance our exploration campaign in the region as we pursued new areas. We have drilled 13 wells in this basin, nine of which were wildcat wells. We discovered gas in four new areas: Fazenda Axixá (OGX-77), Fazenda São Francisco (OGX-82), Basílios (OGX-97) and Esperantinópolis (OGX-102). We currently have two rigs focused on drilling exploratory wells.

We initiated the drilling of four new wells in 2013: three wildcats: OGX-105, Rocha Lima prospect, a dry well; OGX-107, Fazenda Chicote prospect where we notified gas discovery; and OGX-110, São Raimundo prospect, also with gas discovery. Besides, we commenced the drilling of a wildcat adjacent to the OGX-88 (Bom Jesus) discovery, denominated as Fazenda Santa Isabel (OGX-108), also with gas discovery.

After drilling and discovering gas in four exploratory wells in the Bom Jesus accumulation, we presented to the ANP the Declaration of Commerciality for the area in January, 2013. The Bom Jesus accumulation will be named the Gavião Branco Field and the field’s Development Plan will be submitted to the ANP soon. OGX estimates a total volume in place between 0.2 and 0.5 Tcf of gas for this field.

In February 2013, we notified to the ANP a gas discovery in the Fazenda Chicote prospect (OGX-107), in which approximately 66 net pay meters of gas were identified in the Poti Formation (Devonian section). In March 2013, OGX performed a drill-stem test in the well OGX-107 and obtained a gas flow rate of 3.2 million cubic meters per day in Absolute Open Flow (AOF). The test also confirmed a low gas condensate ratio (GCR), indicating dry gas and demonstrating the similarity of these results with the previous tests carried out in the Gavião Real and Gavião Branco fields, allowing us to continue drilling appraisal wells in this area. This well is located approximately 20 km from the Gavião Branco Field, and is approximately 50 km away from the Gavião Real Field.

SANTOS BASIN

In 2012, we achieved conclusive results through our exploratory campaign in the Santos Basin after analyzing the full set of data gathered from our discoveries and tests which led us to submit to the ANP PADs for the Curitiba, Belém and Natal accumulations. The PADs should enable us to extend the exploration period for additional tests and eventual new appraisal wells which will enhance our understanding of the economic viability of the projects. The Company will perform drill-stem test in the Curitiba accumulation in the coming months.

At the same time, although we have confirmed and reported to the ANP microbiolite limestone with presence of gas and light oil on the OGX-85 well (Fortaleza accumulation), the Company decided not to continue its development and returned the BM-S-57 block to the ANP. In September 2012, the Company also returned the BM-S-29 block to the ANP.

In November 2012, as part of our continuing process of portfolio management, we acquired Petrobras’ 40% participating interest in Block BS-4, located in the Santos Basin. The BS-4 block encompasses two post-salt oil fields known as Atlanta and Oliva, located 185 kilometers off the Brazilian coast at a water depth of approximately 1,500 meters, with oil quality from 14º to 16º API. The consortium is formed by Queiroz Galvão Exploração e Produção SA, which holds the operatorship and a 30% participating interest, and Barra Energia do Brasil Petróleo e Gás Ltda., which also holds a 30% participating interest. In January 2013, the consortium received ANP approval for its Development Plan for the Atlanta Field and the first production well is expected for the second half of 2013 using Ocean Star rig, from our current fleet.

ESPÍRITO SANTO BASIN

We plan to resume our exploratory campaign in the coming months together with Perenco, our partner and operator of the blocks. We will commence drilling one exploration well in each block, BM-ES-39 and BM-ES-40, both of which are considered new and promising areas for oil and natural gas.

In March 2013, OGX decided to return the BM-ES-37 block to the ANP, in which OGX had a 50% stake. In October 2012, the Company also returned the BM-ES-38 block to the ANP.

COLOMBIA

In 2012, OGX finalized the acquisition of 2D and 3D seismic data in the VIM-5 block and also initiated the 3D seismic processing. In October 2012, we participated in Colombia’s 2012 ANH Round, and submitted the winning bid for another block in the Lower Magdalena Valley Basin, VIM-19, approved by ANH.

OTHER OGX HIGHLIGHTS

Exploration and Development Equipment

In accordance with our plan to gradually return our drilling rigs as a part of our transition to a production-focused campaign in the Campos and Santos basins, in February 2013, we returned the Ocean Lexington rig upon completion of the drilling of the Tulum well and the expiration of our contract with Diamond Offshore. We also returned the Ocean Ambassador rig in September 2012.

Going forward, we expect to share one of our rigs with Perenco during 2013 (OGX 50%/Perenco 50%) and with QGEP (OGX 40%/Consortium 60%) for the development of Atlanta field.

Our rig count between 2013 and 2015 is projected to be:

Year	2013	2014	2015
Average number of rigs in fleet	3.2	2.4	1.4

Operator A Qualification

In October 2012, OGX obtained Operator A qualification from the ANP, allowing the Company to operate blocks located in deepwaters and ultra-deepwaters, in addition to shallow waters and onshore, where Operator B already operates.

Controlling Shareholder Put Option

In October 24, 2012, OGX’s controlling shareholder, Eike Batista, granted the Company the right to demand his subscription of up to US$1.0 billion new common shares of OGX at a price of R$6.30 per share (the “Option”). The Option, which expires after April 30, 2014, is conditional upon the Company’s additional capital requirement and the absence of more favorable alternatives, which will be determined by the majority of the independent board members on the Company´s Board of Directors.

The option reflects Mr. Batista’s confidence in the technical expertise and quality assets of the Company, as well as the new opportunities that the oil and gas industry offer to OGX.

People Management

At the end of 2012, OGX had 381 employees and 6,481 third party service providers responsible for conducting all administrative, exploration and oil and gas production activities, up approximately 13% from the previous year. In addition to our strategy of contracting internationally respected suppliers to conduct operating activities, we maintain a high-performance, streamlined structure focused on managerial excellence and with broad experience in the oil and gas sector.

FINANCIALS

The financial and operational data below is presented on a consolidated basis, in accordance with the International Financial Reporting Standards (IRFS) issued by the International Accounting Standards Board – IASB and, in reais (R$), except where otherwise indicated.

Sales Revenues

The Company’s sales in 2012 totaled R$499 million. Of this total, R$174 million corresponded to the shipments sold during the EWT phase and R$325 million earned after the conclusion of the EWT and the Declaration of Commerciality for the Tubarão Azul Field with the sale of two shipments of approximately 1,600 thousand barrels booked as sales revenue.

Net Income

We ended 2012 with net losses of R$1.2 billion, largely without an impact on cash (R$762 million). This result is chiefly due to expenses of R$691 million relative to dry wells and sub-commercial areas and foreign exchange variation expenses of R$364 million.

Cash Spending

OGX spent US$611 million in the fourth quarter. Compared to the previous quarter, the Company’s expenditure increased slightly, in particular due to the development in the Tubarão Azul and Tubarão Martelo fields. The exploration expenses rationalization process that the Company has begun should have a higher impact on our 2013 first quarter earnings results.

Cash Position

OGX ended the year with a cash position of approximately US$1.7 billion, which is in line with our expectations taking into account the disbursement of US$270 million with the acquisition of the stake in block BS-4.

Exploration Expenses

Exploration expenses increased R$38 million year-on-year. This variation was primarily the result of the intensification of seismic campaigns in the Parnaíba Basin and Colombia.

General and Administrative Expenses

General and administrative expenses decreased R$30 million year-on-year, driven by the R$8 million reduction in expenses with profit sharing.

Dry and Sub-commercial Wells

In 2012, the Company posted an expense of R$691 million with dry wells and sub-commercial areas. Of this amount, R$213 million accounts for previously capitalized expenses in the BM-S-29 block, which was returned in August of 2012, and R$20 million capitalized expenses in the BM-ES-38 block, returned in October of 2012. The remaining balance refers to dry or sub-commercial wells.

Foreign Exchange Expense

In 2012, the Company posted net foreign exchange expenses of R$364 million, compared to net expenses of R$72 million in 2011; an increase of R$293 million.

This foreign exchange expense is almost entirely non-cash and due to a net foreign exchange exposure of US$2.4 billion. Despite the loss in U.S. dollars exceeding income, the Company opted not to contract hedge instruments for this non-cash exposure as it plans to settle this dollar-denominated liability through revenue from oil sales to be booked in the same currency, production of which began on January 31, 2012. Thus, the net foreign exchange exposure will be protected by a natural hedge to be generated by oil sales.

Financial Result

The R$213 million financial expense in 2012 is explained by: (a) the un-capitalized interest on financing of R$435 million, partially offset by (b) gains on financial investments of R$231 million; and (c) other net financial income of R$9 million.

Cost of Goods Sold

The R$225 million cost of goods sold incurred with the oil sales after the EWT is broken down as: (a) expenses with leasing of R$95 million; (b) O&M services of R$51 million; (c) logistics of R$46 million; (d) royalties of R$31 million; and (e) others of R$3 million.

Cash and Cash Equivalents

Cash and cash equivalents totaled R$3.4 billion (equivalent to about US$1.7 billion) on December 31, 2012, down R$2.0 billion from December 31, 2011. This decrease is chiefly due to: (a) CAPEX of R$4.3 billion; (b) BS-4 block acquisition for US$270 million (R$575 million), partially offset by (c) capital raising in 1Q12 of R$2.5 billion; (d) EBITDA from FPSO OSX-1 of R$174 million; and (e) restitution of withholding income tax on financial applications of R$156 million.

Property, Plant and Equipment (CAPEX)

Property, plant and equipment represented by capital expenditures during the exploration and development phases include expenses related to drilling campaigns and acquisition of E&P equipment. From December 31, 2011 to December 31, 2012, this balance increased by R$3.9 billion.

Loans and Financing

The R$3.3 billion increase in the balance of loans and financing between December 31, 2011 and December 31, 2012 is due to the transactions listed in the loans and financing table in the appendix.

Income Statement
						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

Note:

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

Balance Sheet
					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

Fixed Assets
	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

Loans and Financing
	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)

Conference Call:

Wednesday, March 27 at 12:00 (Brasília Time Zone); 11:00 A.M. (EST)
Telephone (Brazil): [phone]
Telephone Toll-free (US): [phone]
Telephone (US): [phone]
Code: OGX
Webcast in Portuguese: www.ccall.com.br/ogx/4t12.htm
Webcast in English: www.ccall.com.br/ogx/4q12.htm

Audio will be available three hours after the conference call on the IR website: www.ogx.com.br/ri
The conference call will be conducted in English with simultaneous translation to Portuguese.

ABOUT OGX

OGX Petróleo e Gás SA is focused on oil and natural gas exploration and production and is conducting the largest private-sector exploratory campaign in Brazil. OGX has a diversified, high-potential portfolio, comprised of 26 exploratory blocks in the Campos, Santos, Espírito Santo, Pará-Maranhão and Parnaíba Basins in Brazil, and 5 exploratory blocks in Colombia, in the Lower Magdalena Valley and the Cesar-Ranchería basins. The total extension area is of approximately 4,600 km² in sea and approximately 36,700 km² on land, with 24,500 km² in Brazil and 12,200 km² in Colombia. OGX relies upon an experienced management team and holds a solid cash position, with approximately US$1.7 billion in cash (as of December 2012) to fund its E&P investments and new opportunities. In June of 2008, the company went public raising R$6.7 billion, which at the time was the largest amount ever raised in a Brazilian IPO. OGX is a member of the EBX Group, an industrial group founded and under the leadership of Brazilian entrepreneur Eike F. Batista, who has a proven track record in developing new ventures in the natural resources and infrastructure sectors. For more information, please visit: www.ogx.com.br/ri

LEGAL NOTICE

This document contains Company-related statements and information that reflect the current vision and/or expectations the Company and its management have regarding its business plan. These include, among others, all forward-looking statements that involve forecasts and projections, indicate or imply results, performance or future achievements, and may contain words such as “believe,” “foresee,” “expect,” “consider,” “is likely to result in” or other words or expressions of similar meaning. Such statements are subject to a series of expressive risks, uncertainty and premises. Please be advised that several important factors can cause the actual results to diverge materially from the plans, objectives, expectations, estimations, and intentions expressed in this document. In no event shall the Company 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. The Company 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.