Otto Cites Contingent Resources for Western Turkey's Edirne License
Otto Energy Limited advised that the Company has estimated the contingent resources at 8.5bcf (mid case), in the Edirne License, located in the Thrace Basin of Western Turkey.
The play concept and geological interpretations to date have resulted in six discoveries made in the six structures drilled. The as yet undrilled structures also have the potential for a further 15.7 bcf of gross prospective resources (mid case). Otto's updated estimate on the volumetric Gas Initially In Place (“GIIP”) ranges for the prospects are stated below with recoverable estimates based on a 70% recovery factor (RF). The resource estimates include the results from the recent drilling program completed in July 2008. Whilst robust, these figures are internally generated by Otto and have not yet been independently certified.
The main reservoir target in the Edirne License is at depths of between 250 and 500 meters, with the hydrocarbon accumulations being modest in size, but with proven multiple pay zones.
All six discoveries on the licence are in close proximity to each other and there are also a number of to yet]to]be drilled leads and prospects on the block with amplitude anomalies. Such proximity will allow cost]effective multiple]pool development of the field quickly and at relatively low]cost.
All four gas discoveries drilled in the 2008 drilling campaign encountered substantially greater net gas pay than
the pre]drill estimate, with three of the wells testing at rates of between 1.93 and 3.8 mscf/d (one well was
not tested at this time as it will not be part of the initial development; it will be tested in the next drilling
program). These are excellent flow rates given the shallow pools and hence low reservoir pressures.
The project is proceeding rapidly to commercialization with Front End Engineering and Design (FEED) study
underway. First gas sales are expected mid]2009. Based on production rates of 8]10MMscf/d, it is estimated
the cash flow stream net to Otto will be approximately US $5]10 million per year once on production.
Otto CEO Alex Parks said, "The gross resource estimates of 24.2 Bcf (mean case), gives us confidence that we
have a commercial gas project capable of development. With Turkey's robust domestic gas price of over
US $14.00 per thousand cubic feet, this development should prove very profitable and we look forward to it
being Otto's second producing asset commencing approximately mid 2009."
The partners in the Edirne Gas Project are Otto Energy (35%) and Joint Operators Incremental Petroleum
(55%), and Turkish partner Petraco (10%).
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