MPX and OGX find gas in onshore block in the Parnaiba Basin

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MPX Energia S.A., a diversified utility company with a large portfolio of thermal energy projects, announced today that OGX Maranhão has identified the presence of gas in the Devonian section of well 1-OGX-16-MA, in the block PN-T-68, in the onshore basin of Parnaiba. OGX Maranhão, a joint venture between MPX (33.3%) and OGX Petróleo e Gás S.A. (66.6%), is the operator and holds a 70% stake in this block, while Petra Energia S.A. holds the remaining 30%.
“This discovery opens a new exploratory frontier in an onshore basin, the first in two decades in Brazil. It is important to note that this exploratory campaign was initiated in October 2009 and is conducted by Brazilian companies, obtaining important results in record time”, commented Mr. Paulo Mendonça, General Executive Officer of OGX.
“This discovery is an important milestone in establishing a gas-based thermal power generation complex in Brazil, which with its strategic location in close proximity to a robust integrated transmission system, will contribute to the future expansion of this segment and of MPX”, said Mr. Eduardo Karrer, Chief Executive Officer of MPX.
“Viva Brazil, viva the Brazilian intelligence”, commented Mr. Eike Batista, MPX’s controlling shareholder and Chairman.
After drilling the first 10 meters in the Devonian section with significant gas shows, in the depth of 1,654 meters, OGX Maranhão decided to conduct a Drill Stem Test. The flow started today, at 5:30 am. After 10 minutes, the presence of gas at the surface was identified and at 6:00 am the wellhead pressure was of 1,900 psi. The well was subsequently shut in for the first build up period. During the second flow, initiated at 8:00 am, the well was aligned to the burner, showing a 15 meter long flame.
With the seismic data recently acquired, 20 new prospects were already mapped, 5 of which located in the same trend of this discovery, indicating a great potential in part of the basin, where OGX Maranhão owns 7 blocks, in a total of 21,000 km². The drilling of well OGX-16, also known as the California prospect, is still in progress and is expected to continue to a maximum final depth of approximately 3,450 meters.
The OGX-16 well, located in the PN-T-68 block, is situated at approximately 260 kilometers of São Luis, the capital of the state of Maranhão. The rig QG-1 initiated drilling activities there on July 5, 2010.
The MPX Parnaiba power generation complex, a partnership between MPX (70%) and PETRA Energia S.A. (30%), consists of gas-fired plants that are expected to provide up to 1,863 MW of power. The complex will be fueled by the gas produced in the blocks and has already been granted the Preliminary License.