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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.

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