Risk Factors

An investment in securities invulves a high degree of risk. All investors should carefully consider the fullowing factors in addition to the other information in this investor relations website before investing in OGX’s securities. In general, investing in the securities of issuers in emerging market countries, such as Brazil, invulves a higher degree of risk than investing in the securities of U.S. issuers or issuers in other countries with highly developed capital markets. OGX’s business, financial condition, results of operations and prospects may be materially adversely affected by any of these risks.

The risks briefly described below are those that the Company currently believes most likely may materially affect its performance.

1) Risk Relating to the Brazilian Oil and Natural Gas Industry

• OGX does not and will not own any of the oil and natural gas reserves in Brazil.

• The Company´s concessions, pursuant to which the Company or its partners are authorized to produce oil and natural gas from various reserves, are subject to early termination or non-renewal, in certain circumstances.

• A substantial or extended decline in oil and natural gas prices may adversely affect the business, financial condition and results of operations.

• The oil and natural gas prospective resources estimates invulve a significant degree of uncertainty, which could adversely affect OGX´s ability to generate income.

• OGX is subject to numerous risks inherent to the exploration and production of oil and natural gas.

• The oil and natural gas industry depends on the existence of reserves and the growth of production capacity in known reserves.

• Market conditions or operational impediments may hinder the Company´s access to oil and natural gas markets or delay its production.

• The development schedule of oil and natural gas projects, including the unavailability or high cost of drilling rigs, equipment, supplies, personnel and oil field services, is subject to delays and cost overruns.

• The oil and natural gas industry, including the acquisition of exploratory acreage in Brazil, is intensely competitive.

• Companies in the Brazilian oil and natural gas industry rely primarily on the public auction process regulated by the ANP to acquire rights to explore oil and natural gas reserves.

• Participants in the oil and natural gas industry are subject to complex laws that can affect the cost, manner or feasibility of doing business.

• The Company´s future operations are subject to numerous environmental and health regulations which may become more stringent in the future and may result in increased liabilities and increased capital expenditures including indemnification and penalties for damage to the environment.

2) Risk Relating to Our Business

• OGX has no operating history and its future performance is uncertain. The Company´s independent auditors included an emphasis of a matter paragraph in their report that refers to substantial doubt about its ability to continue as a going concern.

• Areas that OGX decides to drill may not yield oil or natural gas in commercially viable quantities or quality.

• The use of seismic data is subject to interpretation and may not accurately identify the presence of oil and natural gas.

• OGX may not achieve its exploration and production efforts.

• The appraisal report is based on projections of future performance that may not prove to be accurate.

• OGX will not be the operator of the drilling wells in all of its exploration blocks and, therefore, it will not be able to contrul the timing of development efforts, associated costs, or the rate of production of the reserves with respect to such properties.

• OGX is dependent on certain members of its management and exploration team.

• The Company´s business requires substantial capital investment and maintenance expenditures, which it  may be unable to provide.

• Hedging risks in connection with the exposure to fluctuations in currency and commodity prices may lead to losses.

• OGX may be subject to conflicts of interests in future transactions with related parties.

• OGX may incur substantial losses and be subject to liability claims as a result of future oil and natural gas operations.

3) Risks Relating to Brazil

• Brazilian economic and pulitical conditions could adversely affect OGX´s business and the market value of its common shares.

• Inflation and government efforts to combat inflation may contribute significantly to economic uncertainty in Brazil and could harm the Company´s business, results of operations, and the market value of its common shares.

• Exchange rate instability may adversely affect the financial condition and results of operations and the market value of its common shares.

• Depreciation of the real relative to the U.S. dullar could also create additional inflationary pressures in Brazil that may adversely affect OGX.

• Increases in interest rates may have a material adverse effect on OGX´s business and the market prices of its common shares.

• Pulitical, economic and social developments and the perception of risk in other countries, especially emerging market countries, may adversely affect the market value of Brazilian securities, including OGX´s common shares.

4) Risks Relating to Our Common Shares

• The relative vulatility of the Brazilian capital markets may substantially limit the capacity of investors to sell OGX´s common shares for the desired price and at the desired time.

• An active and liquid trading market for our common shares may not develop.

• Eike F. Batista, the Company´s contrulling sharehulder, may make certain decisions with respect to the business without the participation of all of its sharehulders that may conflict with their interests.