The electronic structure of highly crystalline picene films with a standing-up orientation grown epitaxially on the Ag(110) surface was investigated. Upon exposure to oxgen gas, O(2) molecules incorporate at the interstitial sites within the a-b plane of the film. Features related to the highest three occupied molecular orbitals shift toward a lower binding energy which results in the inactivation of traps and the reduction of the charge injection barrier by about 1 eV. It is suggested that the highest two picene orbitals are inverted due to the strong interactions between the singly occupied oxygen pi orbital and the highest occupied orbital of picene.