OGX NEGOTIATES WITH PARTNERS TO MINIMIZE DELAY IN THE PRODUCTION OF THE OLIVIA AND ATLANTA FIELDS.

July 24, 2017

OGX Petróleo e Gás, which is under judicial reorganization, has published a relevant fact to inform the market the latest information about the Consortium for the exploitation of Campo de Oliva. The company reported that the parties involved decided to renegotiate certain existing terms, conditions and warranties relating to the FPSO charter for the development of the Atlanta Field in order to enable the production of oil and gas.

OGX entered into a set of agreements including parties directly and indirectly involved in chartering the FPSO. The agreements will enter into force after the completion of certain post-signature procedures. The consortium is formed by it, QGEP Participações, Barra Energia do Brasil Oil and Gas, OGX Netherlands Holding, Teekay Offshore Partners. The objective, according to the company, is to minimize the impacts related to the delay in the production of the FPSO Petrojarl I, which is destined to operate in the block.

Among the main developments of the OGX renegotiation are the establishment of a business solution for the partial amortization of payments owed by OGX of approximately US $ 14 million and the replacement of the guarantee originally agreed with Teekay to cover the obligations of the charter, which provided for recurring deposits in favor of Teekay, for the granting of a guarantee directly to QGEP and BE through the receivables related to 80% of the net result that OGX is entitled to as a result of the sale of oil produced in the Atlanta Field through a deposit in account for the purposes of the obligations assumed by the consortium with Teekay.

The agreements resulting from the renegotiation also establish the reduction of the FPSO charter value in the initial 18 months of production. After the first 18 months of production, the original daily rate will come into effect, and will include a variable component linked to oil prices, enabling Teekay to recover the difference.

OGX holds a 40% stake in the Atlanta and Oliva Fields, in partnership with QGEP (30%) and BE (30%). The Atlanta Field production development project is in the implementation phase, with production scheduled to begin in the first quarter of 2018, as announced by QGEP, which is the operator of the BS-4 Consortium.

OGX reinforces that it is making efforts to dispose of its stake in Block BS-4 to potential interested companies.