OGX To Sell Oil License Stakes

July 9
4:14 AM 2013

OGX Petroleo & Gas Participacoes (OGXP3) in talks regarding sale of stakes in crude oil block licenses that owned by OGX. The purpose of the sale is to avoid running out of cash for funding needed.

OGX, controlled by Eike Batista, will be left with about $13 million by year's end if it will not receive the US$250 million cash investments from Petroliam Nasional Bhd. The cash investment will serve as initial payment for the acquisition of the 40 percent stake in the Tubarao Martelo field.

A bank estimate was released a day after OGX announced that it may shut down its only producing oil field in the coming year. OGX also announced that three other fields under its wing are not commercially viable.

OGX is required to pay the Brazilian oil regulator 377 million reais or US$166 million in the so-called bid bonuses for the licenses it acquired in May.

Due to the current issues, OGX's shares have declined 89%, the most among the 263 oil and gas producers in the Americas worth at least US$100 million.

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