Otto Energy announced the award of Area 8 Service Contract 69 offshore Philippines to the company's wholly owned subsidiary NorAsian Energy Limited for a 7-year period.
NorAsian, in partnership with Filipino partner TransAsia Oil & Energy Development Corporation, were selected from a competitive bid process for this prospective offshore exploration area.
SC69 is situated between the Islands of Cebu, Bohol and Leyte, and covers the eastern Visayan basin over an area of 7,040 kilometers squared. The block lies between the two sub blocks of SC51 where Otto already has an 80% working interest.
In 2007, NorAsia acquired 146 kilometers squared of 3D seismic data over two prospects in SC51. Area 8/SC69 offers significant follow-up potential in additional structures if initial drilling in SC51 proves successful.
SC69 has approximately 3,000 kilometers of existing 2D seismic and an active petroleum system as shown by abundant onshore oil seeps and seismic supported direct hydrocarbon indicators on prospects in the area.
The minimum committed exploration work program is split into five subphases over a term of seven years. NorAsian can choose to opt out of the permit at the end of any of the subphases if desired, without any penalty. There will be associated environmental studies that will be required before operations commence.
--Subphase 1 will consist of data gathering and G&G studies, including reprocessing of existing 2D seismic data.
--Subphase 2 will consist of either 2D or #d seismic acquisition.
--Subphases 3 and 4 both consist of either 3D seismic or drilling of one well.
--Subphase 5 consists of 1 firm well drilling commitment.
This is a minimum program only and if the prospectivity of the area is as good as believed, NorAsian and TransAsia may choose to accelerate the program once thorough environmental impact assessment studies are conducted; the community has been appropriately consulted; and activities sanctioned by the federal and local governments.
NorAsian and Otto are committed to protecting the environment and will be embarking on environmental baseline surveys and risk assessments to help guide its exploration and drilling programs. In undertaking these studies, NorAsian intends to work closely with local experts to best understand the ecological, social and cultural values of the area.
"Area 8 is considered to be very prospective and holds potentially significant value for Otto, particularly if we are successful in the adjacent SC51 block," said Otto CEO Alex Parks. "We have secured the permit on a minimal work program commitment, but plan to execute a proactive exploration program based on the technical merits of the area. Otto now occupies a key position in the oil and gas prospective East Visayan basin."
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