Otto Energy Abandons Duhat-1 Well in SC51

Otto Energy Limited, as operator of the Service Contract 51 joint venture onshore the island of Leyte in the Philippines, provided the following update on the Duhat-2 exploration drilling campaign.


At 1500 hours local time July 25, Desco Rig 30 was drilling ahead at approximately 656 feet (200 meters) when the well started to flow high pressure water at high flow rates into a lined surface pit via a diverter valve. Upon analysis, the flow was comprised of brackish water with very low trace gas readings. Standard industry safety practice was followed to shut-in the well using heavy weight mud and the onsite drilling team implemented these procedures immediately

The flow of water from a highly permeable interval was initially stopped using heavy weight mud. Over the intervening period further intermittent flow occurred until the well was finally stopped and a cement plug emplaced July 26. Otto further advises that there have been no injuries to any personnel and no identified impacts on the local environment as a result of the flow of water from the well. A continuous monitoring system has been put in place, and Otto is in regular contact with local communities and the authorities, who have been fully appraised of the situation.

Forward Plan

Otto has reviewed the flow and pressure information obtained since drilling commenced at Duhat-2 and the forward plan is to plug and abandon the well. This is primarily a safety based decision as the identified risks of drilling ahead in this location have been deemed unacceptable which has been supported by the Department of Energy.

The presence of a high pressure, water bearing, permeable section was not seen in the Duhat-1 well located some 1,444 feet (440 meters) away. Seismic data through both the Duhat-1 and Duhat-2 wells provided no warning of the presence of this overpressure interval. Accordingly, this significant new information will be reviewed in detail and will be considered in any future decisions regarding forward work programs on SC51.


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