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“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.

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