QGEP Participacoes SA (QGEP3), a Rio de Janeiro-based oil explorer, declined the most on record after reducing estimated potential volumes at an oil discovery in deep waters off the coast of Brazil.
QGEP fell 15 percent to 13.19 reais at 11:28 a.m. in Sao Paulo, after plummeting as much as 17 percent, the biggest intraday drop since it started trading on Feb. 9, 2011.
The company reduced its potential volumes estimate for a section of the Ilha do Macuro project after Petroleo Brasileiro SA (PETR4), the operator of the well, studied drilling results, QGEP said in a statement late yesterday. Petrobras, as the state-run producer is known, will continue drilling and test another prospect deeper beneath the ocean floor, QGEP said.
Banco Bradesco SA (BBDC4) downgraded QGEP Participacoes SA to market perform from outperform after the company reported the negative drilling results, analysts led by Auro Rozenbaum said in note to clients today.
QGEP is still optimistic about finding oil at the Ilha do Macuro well and is also looking at opportunities to buy additional exploration acreage in Brazil, Chief Exploration Officer Lincoln Rumenos Guardado said in a conference call today.
To contact the reporter on this story: Peter Millard in Rio de Janeiro at firstname.lastname@example.org
To contact the editor responsible for this story: Dale Crofts at email@example.com