Bloomberg News

QGET Tumbles After Dry Oil Well in Santos Basin

June 01, 2012

QGEP Participacoes SA (QGEP3) fell to the lowest since its initial public offering after drilling a dry hole in an area that holds Brazil’s biggest oil fields.

QGEP plummeted 16 percent to 8.29 reais, the lowest since it sold shares in February 2011.

QGEP and Petroleo Brasileiro SA (PETR4), Brazil’s state-controlled oil company that operates the Ilha do Macuco well, will study data and decide in the second half of the year the next steps for the area, QGEP said in a statement today. The well cost QGEP $70 million, Chief Executive Officer Lincoln Guardado said today in a conference call with analysts.

Dry holes have a “very big impact” on QGEP because it doesn’t have many exploration areas, Auro Rozenbaum, an analyst at Banco Bradesco SA (BBDC4), said in a telephone interview from Sao Paulo today.

The well is located in Brazil’s so-called pre-salt region in deep waters of the Atlantic Ocean where Brazil has found more oil than any other country in the past decade. QGEP has a 30 percent stake in the block and Petrobras owns the rest.

Petrobras dropped 1.7 percent to 18.80 reais.

To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net


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