Otto Energy Ltd. disclosed Thursday that its subsidiary Otto Energy Philippines Inc. signed a farm-in option agreement with Pryce Gases Inc. to earn a 10 percent working interest in Service Contract (SC) 55, offshore the Philippines. Following this farm-in, Otto will retain a participating interest of 68.18 percent in SC55.
Pryce Gases Farm-in Option
Pryce Gases, a subsidiary of the Philippine Stock Exchange listed entity, Pryce Corporation, has agreed to a farm-in option to SC55 to earn a 10 percent working interest by participating in the drilling of the Hawkeye-1 exploration well.
This farm-in option, along with the $24.5 million funding committed by BHP Billiton and the Red Emperor Resources NL farm-in announced in March for a 15 percent working interest, ensures that Otto is fully funded for the drilling of Hawkeye-1, which is estimated to cost between $30-35 million.
Maersk Venturer Mobilizes to Hawkeye Drilling Location
Load-out of the Maersk Venturer (UDW drillship) has been completed and the Maersk Venturer has mobilized to the Hawkeye drilling location. Drilling will commence over the coming weekend once the rig has been accurately located over the required drilling location.
Otto will report once the well has been spud and then only report upon material events. It is expected that the well will take approximately 2-3 weeks to be drilled to the reservoir interval, at which time Otto would report key information obtained during drilling.
Hawkeye Exploration Prospect
Hawkeye is a large turbidite clastic prospect identified on modern 3D seismic acquired in 2010. The Gross Prospective Resource Best Estimate for Hawkeye is 112 million barrels (Net Prospective Resource 65 million barrels to Otto). Success at Hawkeye will unlock a significant new hydrocarbon play in the deepwater Southern Palawan with material follow-up potential in the carbonate leads and prospects (Gross Prospective Resource Estimate around 11 trillion cubic feet (Tcf) and approximately 400 million barrels of Condensate) also identified on 3D seismic.
Matthew Allen, Otto’s managing director and CEO said: “Otto welcomes Pryce Gases to the SC55 joint venture. Along with our existing joint venture partners, TransAsia Oil and Energy Development Corporation and Red Emperor Resources, the SC55 joint venture looks forward to delivering the highly important Hawkeye-1 exploration well on behalf of the Philippine Department of Energy. The start of drilling at the Hakwye-1 exploration well is a very exciting time for Otto and we look forward to reporting the results of the well in the coming short period of time”.
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