Otto Energy Ltd announced Wednesday that BHP Billiton has exercised the option to farm-in to Service Contract 55 (SC55).
Subject to joint venture and regulatory approval, BHP Billiton will earn up to 60% participating interest and assume operatorship of the block by reimbursing Otto's past costs and funding one offshore deepwater well by 2012, with an option to drill a second well in a subsequent phase by 2013. Otto Energy will retain a 33.18% interest following BHP Billiton's farm-in.
The farm-in option held by BHP Billiton was granted in January 2010, and Otto has worked over the past 16 months to acquire, process and interpret approximately 1,800 km2 of 3D seismic data in the block.
The extensive 3D seismic data indicates the presence of an active petroleum system coupled with a series of large to very large Nido Carbonate structures that supplement the Hawkeye prospect.
Otto's Managing Director Paul Moore said, "We are looking forward to continuing to work with BHP Billiton in Service Contract 55 as we move into the drilling phase of exploration activities. The past 16 months has been a very busy period for Otto as we have acquired, processed and interpreted a large volume of seismic data to identify a portfolio of significant oil and gas prospects. We have benefited from the co-operation shown by our joint venture partner, Trans-Asia, and also BHP Billiton."
"We now look forward to participating in this exciting offshore deepwater exploration program which will provide exposure for Otto's shareholders to material exploration in highly prospective, large structure opportunities."
Otto will submit the required assignment documents to the joint venture partner and the Philippine Department of Energy for approval of the transfer of participating interest to BHP Billiton.
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