UPDATE 1-Batista's Oleo e Gas says has new oil resources in Brazil basins

Tue Dec 17, 2013 1:44pm EST

* New resources with partners in Ceara, Potiguar basins

* Tubarao Martelo to peak at 30,000 barrels/day -company

By Sabrina Lorenzi

RIO DE JANEIRO, Dec 17 (Reuters) - Oleo e Gas Participacoes SA, the oil company controlled by Brazilian tycoon Eike Batista, said on Tuesday that it and its partners have 421 million barrels of recoverable oil in offshore areas they control in Brazil's Potiguar and Ceara basins.

The announcement, at a meeting with investors, comes as the company seeks to convince creditors to agree to a restructuring of more than $5 billion of debt as part of Latin America's largest ever bankruptcy filing.

The recoverable oil includes 277 million barrels in the Ceara Basin, the company, formerly known as OGX Petroleo e Gas Participacoes SA, told investors at a presentation in Rio de Janeiro. Oleo e Gas's share of the Ceara oil and gas is 118 million barrels, the company said.

In the Potiguar basin, Oleo e Gas owns 50 percent of the POT-M-762 block with Exxon Mobil. In the Ceara Basin, it owns 30 percent of the CE-M-661 block with France's Total and Queiroz Galvão Exploração e Produção and 50 percent of the CE-M-603 block with Exxon.

The estimate comes as the company ramps up output from its second offshore oil field and seeks to convince investors and creditors to approve its reorganization.

The offshore field, Tubarao Martelo, will produce 30,000 barrels a day of oil at its peak, Oleo e Gas reserves manager Armando de Almeida Ferreira said at the event without saying when that level of output will be reached.

"Lets avoid production estimates at this point, we will wait until Tubarao Martelo's output has stabilized," Chief Executive Paulo Narcelio Amaral said at the event.

Failure to meet production targets at the company's first field, Tubarao Azul, in early 2012, led to a more than 90 percent decline in the value of Oleo e Gas e shares and the downfall of Batista's EBX industrial group.

According to a June 30 report from DeGolyer and MacNaughton, a Dallas-based oil resource certification company, peak production of proven and probable reserves in Tubarao Martelo is expected in 2017 with 7.59 million barrels of output, or an average of about 21,000 barrels a day.

The company began output from two wells in the Tubarao Martelo field earlier this month and it expects to have its third and fourth wells producing in April and May, Amaral said on Tuesday.

Shares of Oleo e Gas fell 4.6 percent to 0.21 reais in afternoon trading in Sao Paulo on Tuesday, on track for their lowest close since Dec. 5.

The company said six of seven planned wells in the field have been drilled.

In addition to helping Oleo e Gas produce enough revenue to win approval for a restructuring plan, oil output from Tubarao Martelo can also guarantee the survival of sister company OSX Brasil SA, Amaral said.

OSX, also controlled by Batista, is counting on its OSX-3 production ship in Tubarao Martelo for nearly all its income. Rental fees owed to OSX, which come due in January will be paid, he added.

The company also expects 25,000 barrels a day from its Atlanta and Olivia fields from a provisional production system. A more permanent system should boost that to 80,000 barrels a day in 2018.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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