ÓLEO E GÁS PARTICIPAÇÕES S.A. CNPJ/MF: / Public Company B3: OGXP3

Transcription

1 ÓLEO E GÁS PARTICIPAÇÕES S.A. CNPJ/MF: / Public Company B3: OGXP3 OGX PETRÓLEO E GÁS S.A. CNPJ/MF: / Public Company B3: OGSA3 OGpar and OGX disclose information as part of the Settlement with creditors Rio de Janeiro, August 16 th, Óleo e Gás Participações S.A. ( OGpar ) (B3: OGXP3; OTC: OGXPY.PK) and OGX Petróleo e Gás S.A. ( OGX ) (B3: OGSA3; OTC: OXPRY.PK) (together, Companies ), announce to the market that, as part of the negotiations to implement the settlement disclosed by the Companies through material fact released on July 24 th, 2017 ( Settlement ), certain information, including a proposal for adoption of a new brand and name by OGX, were disclosed to certain creditors which took part in the Settlement, among them OSX-3 Leasing B.V. bondholders, DIP Financing debenture holders of the 1 st and 2 nd Series of the 3 rd Private Issuance of Convertible Debentures into Shares, with real guarantee, with additional fiduciary guarantee, and certain signatory creditors of the Export Pre-Payment Contract dated as of June 23 rd, Also, as part of the negotiations with such creditors, the Companies agreed that the information would be disclosed to all of the Companies shareholders and creditors and to the market in general, which is being fulfilled with the present notice to the market and its attachments ( Disclosed Information ). Important Note The Disclosed Information should not be regarded as an indication that the Companies or any other person considered, or now considers, this information to be predictive of actual future results, and does not constitute an admission or representation by any person that such information is material, or that the expectations, beliefs, opinions and assumptions that underlie these materials remain the same as of the date of this disclosure and the information or as of the date indicated contained in these materials may have been superseded by subsequent developments. Readers are cautioned not to place undue reliance on these materials and are referred to the Company s current public disclosure.

2 Projections/Forward Looking Information Projections, including with respect to cash flows, are included in the material set forth herein. Such projections have not been examined by auditors. The projections and other material set forth herein contain certain statements that are forward-looking statements. These statements are subject to a number of assumptions, risks, and uncertainties, many of which are and will be beyond the Companies control. These projections are considered as of the date indicated and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and the Company undertakes no obligation to update any such statements. The projections, while presented with numerical specificity, are necessarily based on a variety of estimates and assumptions which, though considered reasonable by the Companies, may not be achieved and are inherently subject to significant business, economic, competitive, industry, regulatory, market and financial uncertainties and contingencies, many of which are and will be beyond the Companies control. The Companies cautions that no representations can be made or are made as to the accuracy of the historical financial information or the projections or to the Companies ability to achieve the projected results. Some assumptions may prove to be inaccurate. Moreover, events and circumstances occurring subsequent to the date on which the Projections were prepared may be different from those assumed, or, alternatively, may have been unanticipated, and thus the occurrence of these events may affect financial results in a materially adverse or materially beneficial manner. Non-GAAP Information The financial information reflected in the Disclosed Information does not purport to present the Companies financial condition in accordance with accounting principles generally accepted in the United States or any other country. The Companies independent accountants have not audited or performed any review procedures on the Disclosed Information (except insofar as certain historical financial information may have been derived in part from the Companies historical annual financial statements). Funding Obligations The Companies have various contracts and other interests that it is required to comply with, some of which include funding obligations. In the event the Companies are unable to fund its obligations, its interests in certain key contacts and joint venture agreements may be compromised. The Companies reserve all of

3 their rights with respect to any legal or other arguments that may be asserted in connection with preserving their interests. Rio de Janeiro, August 16 th, 2017 Paulo Narcélio Chief Executive, Finance and Investor Relations Officer Óleo e Gás Participações S.A. OGX Petróleo e Gás S.A. Legal Notice This document contains Company-related statements and information that reflect the current vision and/or expectations the Company and its management have regarding its business plan. These include, among others, all forward-looking statements that involve forecasts and projections, indicate or imply results, performance or future achievements, and may contain words such as believe, foresee, expect, consider, is likely to result in or other words or expressions of similar meaning. Such statements are subject to a series of expressive risks, uncertainty and premises. Please be advised that several important factors can cause the actual results to diverge materially from the plans, objectives, expectations, estimations, and intentions expressed in this document. In no event shall the Company or the members of its board, directors, assigns or employees be liable to any third party (including investors) for investment decisions or acts or business carried out based on the information and statements that appear in this presentation, or for indirect damage, lost profit or related issues. The Company does not intend to provide to potential shareholders with a revision of the statements or an analysis of the differences between the statements and the actual results. Each investor must conduct and rely on its own evaluation, including of the associated risks, in making an investment decision. OGpar / OGX Contacts Investors: Paulo Narcélio Victor Rosenzvaig ri@ogpar.com.br Media: Cibele Flores cibele.flores@ogpar.com.br

4 Discussion Materials X

5 Post -Restructuring Issues Liquidity: The company has today a comfortable level of cash and very low risk of liquidity for at least the next 9-12 months. BS4 Current Status and Available Options: The company has two options regarding BS4: to sell the asset for a low price to any of the prospective buyers so far identified or to use financing to keep the asset. Outstanding BS-4 cash calls will be paid with RBL finance or with proceeds from the sale of BS-4 TBMT Revitalization, New OSX3 Charter and Abandonment Arrangement: There is value generation in revitalizing TBMT. The company acknowledges the challenge of finding an adequate structure for an extended use of the OSX3 vessel that offers proper incentive to the owners of the vessel and balances the interests of two groups of shareholders. Sale of Eneva Shares: Eneva s equity value has increased about 30% value in dollar terms in the last 6 months. But the company understands that the value of the Eneva shares are still traded at significant discount only 75% of book value. The controlling shareholders of Eneva are planning to re-ipo the company, what can be and alternative for a better exit in case OSX3 and the DIP/IF are prepared to wait another 6-months-to-a-year to dispose of their shares. G&A Reduction: The company is committed to reduce G&A as much as possible and proposes a 20% reduction in the next year. It is important to highlight that part of the reduction depends solely on management s action and part depends also on shareholders decisions. 2

6 Lessons Learned Cash Oriented: Recover of U$100 million of tax credits. Keep Value Assets: Participation in the merge of PGN into Eneva, generating significant added value (~from U$40MM to ~U$60MM). Comply with the Regulatory Agencies (ANP, IBAMA, etc): Operatorship class A. Divest of Exploratory Assets: U$1 billion regulatory liabilities resolved by the selling of pre-operational assets in Brazil and Colombia. Transparency : Successful commercialization efforts to reduce cargo costs (TBMT discount to $4,00* from $9,00/barrel). *Current Discount from last offload. For projections we are using $6/bbl discount 3

7 Key Assets Tubarão Martelo BS-4 (Atlanta and Oliva) Eneva S.A. (Ticker: ENEV3) Tax Credits OGPar: 100% stake and Operator Estimated net recoverable volume of ~70 Mboe NPV10 ~ U$50MM Current production of 7,5k bpd to the FPSO OSX-3, with four production wells Production currently generates positive cash flow Revitalization Project can extend production until Dec-20 Oil Quality: 21º API Water depth of 120 meters Concession contract: - OGPar: 40% stake - Queiroz Galvão (QGEP): 30% stake (operator) and Barra Energia: 30% stake Production scheduled for 1Q of 2018 with 20k bpd Project NPV10 of OGX s stake stands at USD279MM (oil at $50/brent) Estimated recoverable volume of 191 Mbbl (1P and 2P reserves) Oil quality: 13,5 15,5 º API Water depth ~1,500 meters OGX holds 6.22% of Eneva shares ~USD 64 mm (Mkt cap U$1,1 bi) Public Company listed on Novo Mercado and among the largest private power generation companies in Brazil Unique integrated gas-to-wire in Brazil. Net Revenue of U$ 281MM and Adjusted Ebitda of U$ 143MM in 1H 2017 Has approximately 2.4 GW of gross installed capacity in operation Trades ~75% of Book Value (Multiples is 2 X) Deferred Taxes of U$2.4bn - Save up through 30% of income tax - Non-lapse Credit PIS/COFINS Credit of U$ 40mm 4

8 Liquidity Cash Flow Week Current Month ago/17 ago/17 ago/17 ago/17 ago/17 set/17 set/17 set/17 set/17 out/17 out/17 out/17 out/17 out/17 Direct cashflow (US$ '000) 01-ago 06-ago 13-ago 20-ago 27-ago 01-set 10-set 17-set 24-set 01-out 08-out 15-out 22-out 29-out Revenues TBMT Opex TBMT (2.469) (2.803) (975) (975) (1.946) (1.817) (1.189) (1.189) (1.748) (1.507) (879) (879) (879) (1.204) Royalties TBMT (831) (788) (903) Cash flow asset level (2.469) (2.803) (975) (2.778) (1.817) (1.189) (1.189) (1.507) (879) (879) (879) (2.108) G&A (486) (135) (135) (135) (470) (888) (179) (179) (179) (853) (143) (143) (143) (143) Advisors (5) (20) (20) (20) (35) (25) (25) (25) (25) (10) (10) (10) (10) (10) Term Sheet Costs (2.951) (264) (417) Cash flow Corporate level (491) (155) (155) (155) (3.457) (913) (204) (204) (468) (863) (153) (153) (153) (570) Cash Flow from Operating Activities (2.960) (2.958) (1.130) (6.235) (2.730) (1.393) (1.393) (2.370) (1.033) (1.033) (1.033) (2.678) TBMT Abandonment Fund (2.470) (1.671) Cash Flow from Investing Activities (2.470) (1.671) Financial Expenses and FX Cash Flow from Financing Activities Cash Flow Generation (2.928) (2.958) (1.130) (8.705) (2.730) (1.393) (1.393) (2.370) (1.033) (1.033) (1.033) (2.678) Cash BoP Cash EoP

9 TBMT Revitalization Assumptions Brent at $50/bbl Well TBMT-4HP will replace 2HP in May/18 Capex: $15MM Sub Sea Lines and Installation + $15MM Well Completion - $2MM in Inventory Production until Dec/20 expected to be 9MM bbl (6MM bbl additional) FOB Discount BRENT - $6/bbl Abandonment Cost $61,5MM Charter - after 04/2018: 3% of TBMT Revenue after Royalties + 2/3 Excess Revenues over U$8MM/mth. 6

10 Cash Flow with Revitalization of TBMT Numbers in Millions Production Profile - TBMT Revenue Opex (68) (71) (71) (63) Royalties (12) (12) (10) (8) (=) Op. Cash Flow Eneva Shares To Closure Fund Capex - TBMT (3) (25) - - Closure Funds To TBMT (37) (6) - - (=) Investment Cash Flow (20) (32) - - Suppliers Credit Repayment - (3) (4) (0) TBMT Finance Repayment - (7) (9) (8) (=) Finance Cash Flow 6 13 (13) (8) (=) Cash Flow (2) 7

11 TBMT Financing: Term Sheet: Main Conditions A Judicial Recovery - Status and Key milestones 1 Clarify existing amount and estimated timelines for debt conversion to equity 2 Will there be any changes to the organizational structure? B 1 C 1 Production and Cash flow Please provide a Monthly company cash flow model for at least 3 years to include repayments of existing debt profile (principal and interest) Security arrangements What kind of support and or approval/consent is required from bondholders for the prepayment and security granted? D Conditions Precedents and Collaterals 1 Pledge over Oil in Place, Eneva Shares and Inventory of certain Equipment 2 New Charter Agreement with OSX3 FPSO 3 Consent from all bondholders for repayments of the prepayment structure 4 Life of the field extension on the off-take contract E Financial Conditions 1 Amount: U$22MM 2 Costs: Libor + 6% 3 Amortization Accordiningly to the off-loads 4 Grace Period: 6 months 8

12 Assumptions BS4 Current BS-4 Corporate Guarantees being supported by QGEP and Barra Energia: 80% Net Cash goes to compose the new Teekay s Escrow Remaining Balance is % Proposed new Guarantees: OGX will pay $12MM to Teekay in order to be release of this Guarantee The advanced payment of charter will de discounted of the daily rates 1st Oil on Feb/18 / Brent $50/bbl /FOB Discount BRENT - $11/bbl CAPEX Outstanding: $19MM 1 st Oil:$49MM 3 rd Well: $19MM Expected farmout is in July ( 3rd well capex could be reduced to$14mm) RBL to Finance cash calls - $100MM BS-4 Farm-Out of 30% for $200MM in Jun-2018 Farm-Out proceeds will complete TBMT Abandonment fund with $16MM 9

13 Cash Flow BS-4 (1st phase) Considers Farm-Out of 30% in jun-18 for U$200MM ($88cash calls +$12 TK+ $100 Asset Value) Numbers in Millions Production Profile - BS Revenue Opex (12) (21) (15) (16) (15) Royalties - (5) (3) (3) (2) (=) Op. Cash Flow (12) BS-4 Farm Out Teekay Escrow Capex - BS4 (49) (38) Closure Funds To TBMT - (16) (=) Investment Cash Flow (35) RBL Finance Repayment - (104) BS-4 Escrow Finance BS-4 Escrow Release (=) Finance Cash Flow 62 (66) (=) Cash Flow

14 Consolidated Cash Flow Considers Farm-Out of 30% in jun-18 for U$200MM Numbers in Millions Production Profile - TBMT Production Profile - BS TBMT Revenue Opex (68) (71) (71) (63) - Royalties (12) (12) (10) (8) - BS-4 Revenue Opex (12) (21) (15) (16) (15) Royalties - (5) (3) (3) (2) Corporate G&A (21) (17) (17) (17) (17) Restructuring Costs (8) (2) (2) - - Advisors (4) (1) (1) - - Others (2) (4) (=) Op. Cash Flow (2) Assets Sale TBMT Capex - TBMT (3) (25) Closure Funds To TBMT (37) (6) BS-4 Capex - BS-4 (49) (38) Closure Funds To TBMT - (16) (=) Investment Cash Flow (55) Suppliers Credit Repayment S.C. - (3) (4) (0) (0) TBMT Finance Repayment - (7) (9) (8) - BS-4 RBL Repayment RBL - (104) (=) Finance Cash Flow 68 (53) (13) (8) (0) (=) Cash Flow (1) (2) Cash BoP Cash EoP Abandonment Fund (39) (61) (61) (61) (61) 11

15 EBITDA FORECAST Considers Farm-Out of BS4 30% in jun-18 X Without Farm-Out With Farm-Out 30% in Jun-18 Without Farm-Out P&L P&L Numbers in Millions Numbers in Millions Tubarao Martelo Revenue Tubarao Martelo Revenue BS-4 Revenue BS-4 Revenue (=) Net Revenue (=) Net Revenue COGS COGS (92) (110) (92) (130) TBMT TBMT (80) (84) (80) (82) Opex Opex (68) (71) (68) (69) Royalties Royalties (12) (12) (12) (12) BS-4 BS-4 (12) (27) (12) (48) Opex Opex (12) (21) (12) (38) Royalties Royalties - (5) - (10) (=) Gross Profit (=) Gross Profit Corporate Corporate (34) (23) (34) (23) G&A G&A (21) (17) (21) (17) Restructuring Costs Restructuring Costs (8) (2) (8) (2) Advisors Advisors (4) (1) (4) (1) Others Others (2) (4) (2) (4) (=) EBITDA (=) EBITDA

16 Immediate Sale of BS4: Pros and Cons Reduce risks of BS4 project (water cut, FPSO size, no history of QGEP as operator) Burden of Cash Flow Deleverage Pros Cons Value destruction at current conditions. Loss of EBITDA of the project Loss of further upside in case of appreciation of oil price Execution Risk: Closing should occur up to 12 months after signing Sales proceeds of the offer so far received would not be sufficient to keep company alive in the long run Company is put in liquidation mode Management recommends to hold the asset until first oil, and work on a partial sale of 30% of the equity. Revenues from first oil and initial cash flow from BS4 will double the size of the company.

17 Cost Reduction for 2018 G&A Specific Items = U$2.6MM Corporate Vehicules = US$1MM Other - U$100k Audit and Material Fact Committees U$100k TOTAL : U$3.8MM 14