OGX: Parnaiba Natural Gas Find Estimated at 15T Cubic Feet

RIO DE JANEIRO (Dow Jones Newswires), Aug. 16, 2010

OGX said Monday that a recent natural gas discovery could hold as much as 15 trillion cubic feet of the clean-burning fuel.

The potential resource is located across the seven exploration blocks OGX holds in the Parnaiba Basin in Brazil's north, with 20 prospects similar to the well that contained the first natural gas find announced last week, the company said.

"OGX estimates that this potential volume could correspond to a production capacity of approximately 15 million cubic feet of natural gas per day," OGX said.

Natural gas output at that level would help reduce Brazil's dependence on neighboring Bolivia for natural gas supplies. Brazil imports about 30 million cubic meters of natural gas daily via pipelines from its Andean neighbor.

The size of the discovery caused OGX to ramp up exploration efforts in the new frontier, the company said. OGX now plans to drill 15 wells in the region, up from previous plans for seven wells. Total investments in the exploration blocks will now be set at between 600 million Brazilian reals ($339 million) and BRL700 million, OGX said.

The oil company holds a 70% stake in the PN-T-68 block where the discovery, dubbed California, was made through its OGX Maranhao subsidiary. Petra Energia S.A. has the remaining 30% share.

OGX holds stakes in 29 exploration blocks in the Campos, Espirito Santo, Para-Maranhao, Parnaiba and Santos basins.

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