Otto Energy Limited, as operator of the Service Contract 51 (SC51) joint venture onshore the island of Leyte in the Philippines, provided the following update on preparations for drilling the Duhat-2 exploration well.
The contracted rig, Desco Rig-30, has commenced mobilization from Batangas to the port of San Isidro, after which it will proceed to the Duhat-2 drill site, less than 6.2 miles from the port. The rig and all other required equipment are expected to be on site and ready for drilling to commence by late July 2013.
Imminent Growth Catalyst
The Duhat-2 well is targeting a 5 square miles prospect on the San Isidro anticline that has been mapped to contain a mean Prospective Resource of 34 million barrels with a range of 1 to 88 million barrels. Nearby oil seeps indicate clear evidence of a working petroleum system in the area and drilling is supported by quality 2D seismic data, which has substantially de-risked the structure. Given the onshore location of Duhat-2, a discovery as small as 1 million barrels could be economic.
Potential for Early Production following Exploration Success
In the case of exploration success at Duhat-2, field development and production could occur as early as 2014 as part of an extended production test. Full-field development would then follow.
“Drilling of the Duhat-2 well demonstrates Otto Energy’s commitment to deliver value from our exploration portfolio which is focused on East Africa and the Philippines. Commencement of rig mobilisation for this well marks the start of our third operated well in 2013, alongside the 2 development wells being drilled for Galoc Phase II. Prudent financial management has allowed us to fully fund these activities without dilution of shareholder’s interests despite difficult market conditions. Duhat-2 is targeting an exciting large oil prospect with significant upside and the potential to deliver a second production asset for Otto in the near term. Given the low onshore drilling costs for Duhat-2, we have retained a significant 80 percent working interest without over exposing our balance sheet to a single opportunity," Otto CEO Gregor McNab said.
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