The Philippines' Department of Energy (DOE) granted a two-year moratorium on the work program for Service Contract (SC) 55 in the Palawan Basin in the Philippines to the joint venture until Dec. 23, 2017, operator Australia's Otto Energy Ltd. said Friday.
The SC55 joint venture will however undertake a specialized geophysical study in the interim period to determine if further drilling activity is warranted in the block.
Otto Energy drilled the Hawkeye-1 exploration well in 2015, but found the gas discovery to be non commercial for development. The operator has no plans to participate further in SC55 and will assign its stake to the remaining joint venture partners. Documentation to give effect to this assignment is being finalized.
"Otto is would like to thank the Philippines DOE for the support that it has given over the 10 years that Otto has operated in the Philippines. Whilst disappointing that SC55 has not delivered the significant discovery that was being sought, Otto has managed to undertake this large exploration program without exposing its balance sheet to the risk of the exploration outcome," Otto’s Managing Director, Matthew Allen said in the press release.
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