Oleo e Gas Participacoes : OGX and OGPAR execute a settlement term sheet with certain Creditors

ÓLEO E GÁS PARTICIPAÇÕES S.A. - Em Recuperação Judicial CNPJ/MF: 07.957.093/0001-96 Public Company - BOVESPA: OGXP3 OGX PETRÓLEO E GÁS S.A. - Em Recuperação Judicial CNPJ/MF: 08.926.302/0001-05 Public Company - BOVESPA: OGSA3 Material Fact - OGX and OGPAR execute a settlement term sheet with the holders of OSX-3 Senior Secured Callable Bond Issue 2012/2015 issued by OSX 3 Leasing BV and certain lenders of the DIP Facility and Incremental Facility - Rio de Janeiro, January 10th, 2017 - Óleo e Gás Participações S.A. - Em Recuperação Judicial (BM&FBovespa: OGXP3; OTC: OGXPY.PK) and OGX Petróleo e Gás S.A. - Em Recuperação Judicial (BM&FBovespa: OGSA3) ("OGpar" and "OGX", respectively, and jointly, the "Companies"), in accordance with article 157, paragraph 4th of Law No. 6,404/76 and CVM Instruction No. 358/02, and further to the Material Fact of October 28, 2016, inform their shareholders and the market that on the date hereof, the Companies have executed an indicative term sheet which sets out the key commercial terms of a settlement ("Term Sheet" and "Settlement", respectively), among them and (i) OSX Brasil S.A.

- Em Recuperação Judicial, OSX Serviços Operacionais Ltda. - Em Recuperação Judicial and OSX Construção Naval S.A - Em Recuperação Judicial; (ii) OSX-3 Leasing BV (" OSX-3" ); (iii) Nordic Trustee ASA, as the Bond Trustee for the OSX-3 Senior Secured Callable Bond Issue 2012/2015 and as assignee of OSX-3 (the "OSX-3 Bond Trustee" and the "OSX-3 Bonds", respectively); (iv) certain holders of the OGX 3rd issuance of secured debentures, convertible into shares, with additional fiduciary collateral, in three series (as amended or supplemented from time to time, the "DIP Facility"); and (v) certain lenders under the Export Pre-Payment Agreement dated as of June 23, 2014 (the "IF Lenders" and the "Incremental Facility", respectively).

The Settlement's terms and conditions set forth in the Term Sheet are consistent with the terms and conditions proposed by the Companies and announced to the market in the Material Fact of October 28, 2016, essentially consisting in the conversion of (i) any and all outstanding amounts under the Incremental Facility; (ii) all unpaid charter liabilities (which may include charter hire for a future period until redelivery of the FPSO OSX-3 to OSX-3) ("Unpaid Charter"); and (iii) the DIP Facility (prior to or immediately after the conversion of the Incremental Facility and the Unpaid Charter into equity) into OGX equity.

As of December 31, 2016, the outstanding amounts under the DIP Facility, the Incremental Facility and unpaid charter amounted to R$ 1.057 billion, R$ 318.7 million and R$ 1.068 billion (respectively).

OGX capital stock, upon full implementation of the Settlement will be as follows:

OSX-3	32.50%
IF Lenders	15.58%
DIP Facility Lenders	46.92%
OGPAR	1.29%
Current shareholders	3.71%

Following the conversion of all claims into OGX equity as described above, OGX will approve and implement a reverse stock split targeting a price per share of between R$10.00 and R$20.00, details of which will be announced in the future.

Also as part of the Settlement, 33.33% of the Eneva shares owned by the Companies - the Companies currently hold an equity stake of 6.22% of Eneva's capital stock - will be placed in an escrow account to secure the Companies' obligations for the future abandonment of the Tubarão Martelo field and redelivery of the FPSO OSX-3 pursuant to the Settlement; 8.31% of the Eneva shares owned by the Companies will be transferred to the IF Lenders; and 25.02% of the Eneva shares owned by the Companies will be transferred to those lenders under the DIP Facility who decide to participate in the Settlement. All DIP Facility holders will be offered the opportunity to participate in the Settlement.

The Settlement also includes that, upon future request by the OSX-3 Bond Trustee or OSX-3, the Companies will take the necessary steps to redeliver the FPSO OSX-3 within 240 days from such request. OGX will also have the right to terminate the charter contract and redeliver the FPSO OSX-3 to OSX-3 upon 240 days written notice. Upon service of a redelivery notice, OGX will have to take the necessary steps to stop oil production in the Tubarão Martelo field, including implementing a Disconnection Plan and a Decommissioning Guarantee, both of which are to be in form and content acceptable to OSX-3, the OSX-3 Bond Trustee and the ANP as a condition of the Settlement.

OSX-3 has also been granted an option to acquire OGX's rights and interest in the Tubarão Martelo field for the higher of (i) US$1.00 or (ii) the aggregate amount of capital expenditure incurred by OGX solely in relation to physical disconnection of the FPSO OSX-3 following service of a redelivery notice. Such option will be exercisable until the FPSO OSX-3 is actually redelivered and its implementation is subject to the approval of ANP. Upon full exercise and consummation of the option, OSX-3 will be the sole responsible for all fees, costs and expenses associated with the FPSO OSX-3 going forward.

OGX has also agreed to contribute 10% of all revenue after the payment of royalties derived from the Tubarão Martelo field into an escrow account as security for the costs of abandonment of the Tubarão Martelo field and redelivery of the FPSO OSX-3 (the "Escrow Account"). Further, OGX has also agreed to contribute 33.33% of monthly revenue in excess of US$8 million after the payment of royalties and the 10% contribution to each of the Escrow Account and OSX-3 as payment of charter hire under the Charter Contract. The remaining 33.33% of excess revenues shall be retained by OGX to meet its on-going operating expenditure.

The Settlement also determines that the proceeds of the Eneva shares retained by OGX (33.33% of the Eneva shares owned by the Companies) shall be available to meet operating costs of BS-4. Also, 10% of the proportional gross revenue proceeds attributable to OGX from the sale of oil produced at BS-4 after the payment of obligations with respect to royalties shall be placed into the Escrow Account.

Also as part of the Settlement, all existing disputes among the parties will be initially suspended and later discharged and terminated, upon closing of the transaction, with a complete reciprocal release among the parties thereto.

The implementation of the Settlement is subject to the execution of the definitive documentation and to certain conditions precedent and customary approvals, including formal approval by the Companies' financial creditors, as well as regulatory approvals.

The Companies will keep the shareholders and the market informed of the implementation of the Settlement.

Legal Notice:

This document contains Company-related statements and information that reflect the current vision and/or expectations the Company and its management have regarding its business plan. These include, among others, all forward-looking statements that involve forecasts and projections, indicate or imply results, performance or future achievements, and may contain words such as "believe," "foresee," "expect," "consider," "is likely to result in" or other words or expressions of similar meaning. Such statements are subject to a series of expressive risks, uncertainty and premises. Please be advised that several important factors can cause the actual results to diverge materially from the plans, objectives, expectations, estimations, and intentions expressed in this document. In no event shall the Company or the members of its board, directors, assigns or employees be liable to any third party (including investors) for investment decisions or acts or business carried out based on the information and statements that appear in this presentation, or for indirect damage, lost profit or related issues. The Company does not intend to provide to potential shareholders with a revision of the statements or an analysis of the differences between the statements and the actual results. Each investor must conduct and rely on its own evaluation, including of the associated risks, in making an investment decision.

OGpar / OGX Contacts: Investor Relations

Márcia Mainenti Victor Rosenzvaig [e-mail]

[phone]

Media:

Cibele Flores [e-mail]

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