RIO DE JANEIRO (Reuters) - Shares of Brazilian oil company OGX OGXP3.SA plummeted nearly 30 percent on Wednesday after a disappointing production forecast for its only productive field.
Already skittish about a stagnant Brazilian economy after a decade-long investment boom, investors in recent days have begun shedding holdings in one sector that symbolizes much of the recent optimism for Latin America’s largest economy: oil.
Shares in state-run oil company Petrobras PETRF.SA fell nearly 9 percent on Monday after the company detailed rising costs and production shortfalls as it gears up to tap massive new offshore oil fields.
Wednesday’s plunge in OGX shares comes after the company gave a disappointing production forecast for its Tubarao Azul field, where it began pumping its first crude this year.
The company, controlled by Brazilian billionaire Eike Batista, is part of an empire he created in recent years, parlaying investor interest in Brazilian commodities into a string of successful public offerings for ventures in everything from oil to coal to shipbuilding.
OGX, in a regulatory filing on Tuesday, said it aims to produce 5,000 barrels of oil equivalent per day from the field, far below analysts’ expectations.
“Such volume creates high uncertainty over the company’s recoverable oil potential, as well as the maximum volume potential on its producing systems,” JPMorgan said in a research note.
“In addition, such an announcement will likely further damage investor sentiment, already hurt by the recent sequential guidance misses,” the bank added.
OGX’s stock fell as low as 5.91 reais on Wednesday and last traded at 6.24 reais, down 25.2 percent from Tuesday’s close.
Reporting by Walter Brandimarte; Writing by Paulo Prada; editing by John Wallace