Oleo e Gas Partcpacs e Recprc Jdcl : 1Q17 Earnings Release

Rio de Janeiro, May 8th, 2017 - OGX Petróleo e Gás S.A. - Under Court-supervised Reorganization (Bovespa: OGSA3; OTC: OXPRY.PK) ("OGX P&G" or "Company") announces today its results for the first quarter of 2017, and subsequent events relevant to the market.

2017 began with an important milestone in the Company's Court-Supervised Reorganization, the execution, on January 10, of a Term Sheet establishing the main commercial terms of a settlement between the Company and the creditors of the Incremental Facility, the debenture holders of the DIP Facility and OSX-3 Leasing B.V. together with the OSX-3 Bonds' Trustee. Among the challenges that will be surpassed with the execution of the definitive settlement, the debt accrued with the abovementioned creditors, totaling more than R$2.1 billion in 1Q17, will be converted into equity.

After the implementation of mentioned agreement, OGX P&G's capital stock will be distributed as follows:

In addition to ensuring the Company's continuity, this measure will provide OGX new and solid growth opportunities.

As part of the settlement, OGX will maintain its operation in FSPO OSX-3 vessel, in the Tubarão Martelo Field. After the payment of royalties, 10% of net revenue from that Field will be deposited into an Escrow Account as collateral for the Disconnection and Abandonment Plan, as required by the ANP, the regulatory agency. If the monthly royalty-free revenue exceeds US$8 million after the deposit, 33.33% of the surplus will be transferred into the Escrow Account and 33.33% will be allocated to OSX-3 as payment for the leasing of the vessel. The final documents of the definitive settlement are expected to be signed in the second quarter of 2017.

As for the development of BS-4 Block, first oil is expected in early 2018, according to information provided by the operator. Given the successive delays in the arrival of FPSO Petrojarl I, the Company still owes R$92,404 million to the block's Consortium and continues to seek a potential buyer for its interest stake in the asset in order to prevent the ANP from intervening in the continuation of the consortium.

The efforts to gain efficiency and reduce costs and Brent oil prices above US$50.00 in 1Q17, together with all the measures taken by the Company in 2016, enabled the Company to honor its obligations and pay the costs inherent in its operations. Production in the Tubarão Martelo Field totaled 711.8 thousand barrels of oil and net cash generated by operating activities came to R$23.9 million in the period.

Atlanta is a post-salt Field located in BS-4 Block, in the Santos Basin. OGX P&G has a 40% interest in the consortium, in partnership with Barra Energia do Brasil Petróleo e Gás Ltda., with a 30% interest, and Queiroz Galvão Exploração e Produção S.A. ("QGEP"), the block's operator, also with a 30% interest.

According to information disclosed by the asset's operator, the arrival of FPSO Petrojarl I is expected for the fourth quarter of 2017. As a result, the first oil of the Early Production System ("SPA") in the Atlanta Field is expected for the beginning of 2018. In this first phase, potential production is estimated at 20,000 bbl/d, with two producing wells that are already drilled and equipped with submersible pumps and wet Christmas trees. According to the operator, the projection has a margin variation of +/- 10%, and the field production could be expanded with the installation of a third production well.

In Accordance to OGX Reorganization Plan, the sale of assets is one of the measures used to restructure the Company. The successive delays in the arrival of aforementioned FPSO Petrojarl I, and consequently the occurrence of the first oil in the SPA, significantly impact OGX P&G's cash flow projection, which is why the Company has been intensifying its efforts to find potential parties interested in acquiring part of its share in BS-4 Block. FPSO Petrojarl I will be chartered for five years, with a termination clause valid after the third year, and the Consortium has also contracted the necessary equipment and underwater solutions.

The investment of the consortium is estimated at US$127 million for 2017 and OGX P&G is responsible for 40% of this total.

In 1Q17, 711.8 thousand barrels of oil were produced, compared with 568.9 thousand barrels for the same period of the prior year. The chart below shows the evolution in the Company's quarterly production in barrels of oil, in the past five quarters. This unusual increase in production in the third quarter is due to the increase in pressure in reserves, which was caused by the accumulation of hydrocarbons and water during the production standstill period.

Total Production (thousand Bbl)

845

760712

568

1Q16 2Q16 3Q16 4Q16 1Q17

Production in the Tubarão Martelo Field began on December 5, 2013; the physical assets used in production have been operational for three years and all four wells are in operation.

Considering that the average estimated useful life of 2.5 years envisaged in the project for submerged centrifugal pumps has elapsed and that, despite all the diligence and caution of the Company's

technical operations team, there is a probability of failure in 2017, the Company has a Revitalization Project for the Tubarão Martelo Field, including interventions in three production wells, with the replacement of the respective submerged centrifugal pumps and the substitution of a production well still pending superior completion for one of the four production wells. The purpose of the Project is to extend economic useful life by increasing production. As the project requires a significant investment, the Company is considering the possibility of executing only the workover in order to prevent a sharp decline in oil production volume.

The table below shows the financial data for the operation in Tubarão Martelo Field:

In R$ thousands, except as indicated otherwise

Pursuant to the material fact disclosed on January 10, 2017 and the Term Sheet signed with the creditors involved, including OSX-3 Leasing B.V., owner of FPSO OSX-3 vessel, which operates in the Tubarão Martelo Field, all unpaid liabilities relating to the charter of the vessel will be settled by converting the credits into OGX P&G shares, which may include contracting the future charter until the redelivery of FPSO OSX-3.

Under the Agreement, OGX will retain the right to use FPSO OSX-3 vessel; however, when requested, the Company should take all necessary measures to conclude the redelivery process within 240 days from the request, and the same period is valid in case OGX P&G decides to terminate the charter agreement.