Óleo e Gás Participações SA, the Brazilian oil producer currently under bankruptcy protection, received the first portion of a debt-in-possession financing package, according to a statement on Thursday. The company received $125 million in the so-called DIP loan, of a total $215 million that were pledged by creditors, the company added.
The company was formerly known as OGX Petróleo e Gás Participações SA.
The financing accord between Óleo e Gás and its creditors is a necessary step to carry out a debt-for-equity swap that will relieve Eike Batista, the founder of the company and a former billionaire, of control. Proceeds from the DIP financing will be used to repay a $50 million bridge loan extended to the company late last year, and for general corporate purposes. Currently, Óleo e Gás is struggling to pay for the costs of developing its most promising fields while it restructures operations to emerge from bankruptcy protection.
In a separate announcement, Óleo e Gás said average output at its Tubarão Martelo field’s 8-HP well was 3,969 barrels of oil equivalent a day. Production at the 44-HP well and the Tubarão Azul field was 6,827 boed and 3,719 boed, respectively.