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GTU Process Plant View

The third production well in the field, TBAZ-1HP, is under completion and will begin connection to FPSO OSX-1 in the coming weeks. It is expected to come on-stream at the beginning of December.

The average daily production in October amongst all wells in the Tubarao Azul Field was 10.3 kboepd, which is in line with previous months.

In July, OGX made the final shipment delivery of approximately 800,000 barrels under the Company’s first sales contract with Shell, marking the commencement of the Company’s revenues generation after the declaration of commerciality in the Tubarão Azul Field, resulting in sales revenues of R$150.7 million.

On October 15, following the declaration of commerciality and the conclusion of the Extended Well Test (EWT), the fourth shipment of approximately 800,000 barrels was delivered to Reliance Industries Ltd., one of the world's largest refineries and India's largest private company.

The table below shows the pro-forma OSX-1 EBITDA after the delivery of the first shipments:

 
Delivered cargos        

1st 1

   

2nd 1

   

3rd 2

   

4th 3

    Total
Delivery Date 03/28/2012 4/21/2012 07/26/2012 10/15/2012
Operation Period 51 days 27 days 98 days 80 days
 

Production related to the shipments -

in barrels (bbls)

        547,376     246,809     789,774     809,495     2,393,454
 
R$ ('000)
Net Revenue 118,003 55,996 150,686 169,145 493,830
 
Sales Taxes         -     -     -     -     -
Royalties         (10,687)     (4,938)     (14,842)     (15,772)     (46,239)
Leasing         (24,078)     (13,222)     (52,708)     (41,998)     (132,006)
OSX Services         (13,944)     (7,236)     (28,071)     (22,499)     (71,750)
Logistics         (12,005)     (7,410)     (27,795)     (18,405)     (65,615)
Others         (871)     36     (1,183)     (1,529)     (3,547)
 
EBITDA 56,418 23,226 26,087 68,942 174,673
 
% EBITDA / Net Revenue 47.81% 41.48% 17.31% 40.76% 35.37%
EBITDA / barrel - (R$/barrel)         103.07     94.11     33.03     85.17     72.98
Notes:

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

2 Sale occurred after the Extended Well Test and declaration of commerciality - recorded as net revenues

3 Sale occurred after the Extended Well Test and declaration of commerciality - recorded as net revenues. Net figure of expenses associated with the sale of freight costs

 

As shown in the table above, the delivery of the third cargo presented an EBITDA / barrel relatively lower than the first and second cargos due to: i) lower production during the 98-day production period resulting from the need to close the OGX-26HP well for just over a month to allow for the replacement of the centrifugal submersible pump; ii) lower revenue (discount already applied) resulting from a decrease in oil prices (Brent) from USD 122 per barrel at the time of the first cargo to USD 95 per barrel at the time of the third cargo; iii) an increase in costs resulting from currency fluctuations upon the devaluation of the exchange rate by 14% rate from March 28 to July 26; and iv) an increase in logistics costs (boats and fuel) resulting from the IBAMA requirement to use support boats, which did not exist at the time of the first and second cargos.

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