Brazil: OGX-3 Discovery Could Contain Up to 900MM Barrels

OGX has finished the Cased Hole Drillstem Test realized in the 1-OGX-3-RJS well, located in the BM-C-41 block, in the shallow waters of the southern part of the Campos Basin. OGX holds a 100% working interest in this block.

The well, OGX-3, was drilled to a depth of 4,084 meters, resulting in the detection of hydrocarbons in carbonate reservoirs of the Albian, Aptian and Barremian sections, as previously announced on December 18, 2009 and December 28, 2009. Based on the final well information combined with the 3D seismic data interpretation, OGX estimates recoverable oil volume of between 500 and 900 million barrels for all reservoirs.

Upon drilling completion, a Cased Hole Drillstem Test was performed in carbonate reservoirs of the Albian section of well OGX-3, in order to verify the reservoir's characteristics in dynamic conditions. The test data, pressures and permo-porosity conditions confirm the potential production of 3,000 barrels of petroleum per day in vertical well. OGX plans to develop this field through horizontal wells and it is estimated that this potential could be largely increased by up to five times per well, pointing to productivity gains.

Additionally, the test was conclusive, indicating good quality oil, estimated between 19 and 20° API. The static pressures measured are normal, with no indication of depletion. This test is part of an important step for the better understanding of both reservoir and of development of future production projects in the region.

Pride International's Sea Explorer, the rig used at OGX-3, will be mobilized to the next location, the Hawaii prospect, situated in the BM-C-42 block, also in the shallow waters of the southern part of the Campos Basin. The drilling of this well is expected to commence in the mid of February 2010.