Otto reported an announcement by the Galoc Production Company (GPC) regarding approval to commence the Front End Engineering and Design (FEED) work and the acquisition of new 3D seismic in support of the planned Phase II development at the Galoc Oil Field (Galoc).
The FEED work will determine the exact locations and number of additional wells to be drilled, expected to commence in 2013. The new 3D seismic will support the placement of Phase II wells in the reservoir and de-risk capital expenditure.
Otto currently owns an 18.78% holding in Galoc through GPC. Otto has entered into an agreement to increase its interest to a direct 33.00% in Galoc, including 100% ownership of GPC, and to assume control of the operator of the field. Completion of the agreement is scheduled to occur prior to 30 September 2011.
Otto's Acting CEO Matthew Allen said, "These two approvals are key steps in the Phase II development of the Galoc Oil Field which we are currently on track to sanction in mid-2012. Given Otto's recent agreement to assume control of the operator and become the largest shareholder in Galoc, the development of Phase II is a core focus for Otto and we are very pleased with progress to date.
"The Galoc Oil Field recently produced its eight millionth barrel of oil and delivered its 23rd cargo. With the upgrade of the mooring and riser system for the FPSO Rubicon Intrepid expected to occur in the fourth quarter of 2011, the field's performance continues to reinforce our confidence in its reserves and future production."
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