RIO DE JANEIRO - -Brazilian independent oil producer OGX Petroleo e Gas Participacoes SA (OGX) will reduce capital expenditures next year as the company cuts the number of drilling rigs that will be tapping exploration prospects, Chief Financial Officer Roberto Monteiro said during a conference call Wednesday.
OGX will spend about $1.2 billion in 2013, down from expected investments of about $2 billion in 2012, Mr. Monteiro said.
The smaller fleet of drilling rigs needed next year was a "natural transition" as the company winds down its exploration campaign, Mr. Monteiro said. OGX has already drilled more than 100 wells, and is now in the process of evaluating data gathered as the initial exploratory phases for its concessions comes to a close, the executive said.
Decreased exploration spending will also help the company maintain its cash position and avoid going to capital markets for additional funding, Mr. Monteiro said.
"We don't see the company accessing debt markets in the future," Mr. Monteiro said, although the executive added that financial markets were open to the company should they need to raise funding.
An alternative to a bond issue or other financing could be the forward sale of oil from the company's crude production, Mr. Monteiro noted. "Using a small fraction of future production, we can anchor an oil sale that will bring a lot of cash for us," the executive said.
While OGX is always evaluating possible acquisitions or the sale of a stake in its portfolio, the company is not currently in talks with anybody about a potential deal, Mr. Monteiro said. "Farm-outs and farm-ins are natural things in this industry," he said.
Copyright (c) 2012 Dow Jones & Company, Inc.
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