KAR 0.88% $1.13 karoon energy ltd

another big brazilian discovery

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    lightbulb Created with Sketch. 20
    fyi announced last evening...not too far north of Karoon's blocks in similar depth water.


    OGX Gains on Find of Up to 2 Billion Barrels of Oil (Update1)
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    By Helder Marinho and Paulo Winterstein

    Dec. 23 (Bloomberg) -- OGX Petroleo & Gas Participacoes SA rose to the highest in more than a week after it said an offshore Brazilian well could hold up to 2 billion barrels of recoverable oil in what may be the companys biggest discovery.

    OGX rose 1.6 percent to 15.93 reais at 10:01 a.m. New York time in Sao Paulo trading after saying yesterday that its 1-OGX- 2A-RJS well in the BM-C-41 block off Brazils coast has an estimated 1 billion to 2 billion barrels. A close at that share price would be the highest since Dec. 11.

    The company said it finished drilling the well, which found signs of hydrocarbons in five different sections and showed high quality reservoirs. OGX, controlled by Brazilian billionaire Eike Batista, raised 5.87 billion reais ($3.3 billion) in an initial share sale in June 2008 as investors anticipated it could match state-controlled Petroleo Brasileiro SAs success at finding crude.

    The company is showing that the bet investors made way back during the IPO is succeeding, said Nelson Rodrigues de Matos, an oil analyst at Banco do Brasil SA in Rio de Janeiro.

    OGX was reiterated overweight at JPMorgan Chase & Co. and maintained a buy at Raymond James & Associates Inc. Under a best case scenario, OGX may have twice as much reserves in the exploration block as consultant DeGolyer & MacNaughton estimated, Raymond James analyst Ricardo Cavanaugh wrote in a note today.

    OGX owns 100 percent of the BM-C-41 block, which is in shallow waters of Brazils Campos Basin. The company announced Oct. 14 that its BM-C-43 block, also in the Campos Basin, may hold between 500 million and 1.5 billion barrels of crude.

    The 1-OGX-2A-RJS well confirms the vast oil potential of the southern part of the Campos Basin, Chief Executive Officer Paulo Mendonca said in the statement. OGX expects the region will become a major oil producing region in Brazil, he said.

    The company said yesterday it plans to move the Ocean Ambassador rig to the BM-C-43 block to start drilling another well before the end of the year.

    OGX, which plans to drill 79 wells by 2013, has estimated its potential resources at 6.7 billion barrels of crude and equivalents. The company has rights on 29 exploratory blocks in Brazil.

    To contact the reporter on this story: Helder Marinho in Rio de Janeiro at [email protected] Winterstein in Sao Paulo at [email protected]
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