.OGX Sinks Most in Month After Cutting Drilling Fleet
OGX Petroleo & Gas Participacoes SA (OGXP3), the oil company controlled by billionaire Eike Batista, fell the most in more than a month after saying it started reducing its exploratory drilling fleet.
OGX fell 5.2 percent to 5.28 reais at 3:58 p.m. in Sao Paulo after falling as much #$%$9 percent, the most intraday since Sept. 14. It was the second-biggest decline on the benchmark Bovespa index.
The Rio de Janeiro-based producer returned the Ocean Ambassador drilling rig to Diamond Offshore Drilling Inc. (DO) as it focuses on developing fields where it struck oil in the past two years, OGX said in an e-mailed response to questions today. The company plans to start producing from a third well at the Tubarao Azul field in Brazil’s southeastern Campos Basin in the fourth quarter of this year.
OGX will reduce capital expenditures to about $1.2 billion in 2013 from $2 billion this year as it cuts spending on equipment rentals, Chief Financial Officer Roberto Monteiro said in a Aug. 15 conference call.
The reduction of the drilling fleet came earlier than investors were expecting and contributed to the share’s price drop, Erick Scott Hood, an analyst at Sao Paulo-based brokerage SLW Corretora, said in a telephone interview from Sao Paulo.
Thanks for posting this. I'm having trouble buying the return of rig reasoning. I reported the return of that rig on October 3rd here. See my posts related to 10-3-2012 Management Presentation. I find it hard to believe market is just catching on to this news which was implied in the 10-3-2012 presentation. Also, the slated end of contract for Ocean Ambassador has been 2012 and they published this for several years before dropping rig slide from presentation.
I guess one of the following is true a) there is another reason for the drop b) they don't follow this board the way they should c) the market is stupid or slow!
I also see this as good news, reduced capex and as they noted in 6-27-2012 conference call will not interfere with exploration plan previously laid out which was supposed to begin tailing off now and into Q1 & 2 next year anyway. Finally, they will still be able to do exploratory and development drilling with remaining 5 rigs.
Remember you heard this news here well ahead of market.
(translated): 10/18/14: CMA 42 (CMA) Nr. 1311800208 (EMP)
OGX: OGX Shares fall with rumor of return probes
São Paulo, October 18, 2012-OGX's actions, the oil group
EBX, operated with sharp drop caused by market rumours that the company may return over a probe this year. According to the analyst of SLW, Erick Scott, the company has been shown to be more interested in focusing on production of that holding. "This may be positive in the short term, but in the long run means less growth perspective," said the analyst.
Earlier, the action ON the OGX (jobs community) retreating 3.94%, to $ 5.35, with one of the largest volumes of scholarship, $ 110,623 million. Scott also says that part of the losses of the paper refers to operation on fall of oil futures contracts. In New York, the WTI contract for November fell back to $ 0.11 per cent, $92,01 per barrel. In London, the Brent contract for December operated in fall of 0.56%, to $ 112,58 a barrel.
Note: ok, this is ridiculous if true, there is one production well they did not complete yet, see my note on last presentation update, and they might be coming back to complete it. this thing trades on a whim and breath of air of rumour.