Financially troubled Brazilian oil producer Oleo e Gas Participacoes, or OGPar, expects output from its flagship Tubarao Martelo field to peak at about 30,000 b/d in 2016, the company said Tuesday.
OGPar, formerly known as OGX, will invest $200 million-$500 million at the field over the next few years to drill two additional production wells and three injection wells at Tubarao Martelo, OGPar said. The new wells are expected to increase production at Tubarao Martelo to an average of about 25,000 b/d in 2016, up from output of 17,508 b/d in September.
OGPar currently pumps oil from four wells at Tubarao Martelo, with the fourth well starting output on September 4.
Tubarao Martelo holds proved and probable reserves of 78.5 million barrels, according to a recent report by certification firm DeGolyer and MacNaugton. Proved reserves have a 90% chance of being produced, while probable reserves have a 50% chance of recovery.
The challenging Tubarao Azul field, meanwhile, is expected to continue producing about 3,000 b/d until March 2015, OGPar said. OGPar recently reached a deal with OSX Brasil, the services company that owns the OSX-1 floating production, storage and offloading vessel at the field, to continue testing at Tubarao Azul until mid-December.
OGPar expects production at Tubarao Azul to trend steadily lower through the end of 2014 as the company recovers the last of the estimated 6 million barrels of 21 API rated oil from the field. The field's output is expected to fall to 2,900 b/d in October, 2,700 b/d in November and 2,500 b/d in December, OGPar said earlier this year.
Operational troubles at Tubarao Azul caused the financial woes that eventually led the company to file for protection from creditors in late 2013. The field was originally expected to peak at output of about 40,000 b/d, but fell well short of expectations amid a series of technical problems and low flow rates from production wells.
OGPar said it expects to emerge from protection from creditors in April 2015, but will remain under court supervision until about September 2015. The company's new OGX American depositary receipts are expected to start trading in New York in about 15 days, OGPar said.
OGX will be the holding company controlling oil producer OGPar, with creditors who participated in the debtor-in-possession financing round as part of bankruptcy proceedings retaining about 65% of the new firm and pre-bankruptcy creditors owning 25%, OGPar said.
Original OGX shareholders will retain 10%, with Brazilian entrepreneur Eike Batista -- once Brazil's richest man before the financial meltdown at his EBX Group of firms -- holding about half of those shares.
