The Brazilians can’t seem to miss.

A study team from the Rio de Janeiro State University set out to prove that deposits in the Atlantic Ocean off Brazil held less oil than the government estimated. Wow, were they ever wrong! Their final con- clusion was that the field likely contains greater than 120 billion barrels of reserves, more than double the Brazilian government’s estimate of 50 billion barrels.

Brazil isn’t alone in Latin America in boosting its petroleum output. Earlier this month the Paris-based International Energy Agency said it expects Colombia to hike its production of crude by 300,000 barrels per day within five years.

While Petrobras, with a market cap of more than $200 billion, a price barely north of eight times earnings and a recent dividend yield of 4.4%, represents a quintessential megacap energy play, an interesting newer and more speculative investment exists with a lucrative payoff if Brazil’s energy cornucopia continues to churn out new oil deposits.

According to the ANP (Agencia Nacional do Petroleo—Brazil’s national petroleum agency), the nation has approximately 1.9 billion acres of sedimentary regions across more than 40 sedi- mentary basins, of which 29 are considered to be the main basins for oil and natural gas exploration and production activities. Approximately 96% of these sedimentary areas are not yet subject to concession agreements — meaning that the over- whelming portion of the nation’s petro profits are yet to be realized.

Founded in June of 2007, OGX PETROLEO (PINK:OGXPY) is the largest private sector petroleum exploration firm in Brazil (the controlling interest in Petrobras is held by the government). OGX has established a leading position in the Brazilian oil and natural gas exploration and production sector by acquiring a diversified portfolio comprised of 34 exploratory blocks -- 22 offshore and 12 onshore.

In addition to acquiring exploration rights throughout its home country, in June 2010, OGX acquired five onshore exploratory blocks in Colombia.

Read more in the attached weekly update and ...

Happy trading this week!

Rudy

P.S. In the next few days, I will be sending you information about a special discount rate for new and renewal subscribers to Latin Stock Investing.

The market-leading stocks last week in Latin America included:

• Banco Macro SA (NYSE:BMA) +4.1%
• Cresud (NasdaqNM:CRESY) +2.7%
• Grupo Financiero Galicia S.A. (NasdaqSC:GGAL) +2.4%
• Companhia Paranaense de Energia (NYSE:ELP) +2.1%
• Banco Santander Brasil SA (BSBR) +2.0%