9 January 2015
Manager of Company Announcements
ASX Limited
Level 6, 20 Bridge Street
SYDNEY NSW 2000
By E-Lodgement
SERVICE CONTRACT 55: PNOC-EC EXPRESSION OF INTEREST TO FARM-IN AND HAWKEYE EXPLORATION WELL PROGRESS
Otto Energy Ltd (ASX: OEL) ("Otto") is pleased to announce that PNOC Exploration Company (PNOC-EC) has expressed an interest in farming into SC55 for a 15% working interest.
The commercial terms of the farm-in have been agreed and will be finalised in a Farm-in Agreement to be entered into by Otto and PNOC-EC. The farm-in is only subject to approval by the Office of the President of the Philippines.
In addition to PNOC-EC, Otto continues to engage with other potential farm-in partners in the lead up to the drilling of the Hawkeye-1 exploration well, which is anticipated to take place during Q3 2015.
Otto has entered into commitments for long lead items required to drill Hawkeye-1, including well heads and casing.
The equipment required is currently available in SE Asia and can be sourced prior to the anticipated drilling window.
Otto is also seeking expressions of interest for drilling rigs suitable to drill Hawkeye-1. Final commitment to a drilling rig will be considered subject to suitable commercial terms being negotiated and completion of the farm-out program.
OTTO AT A GLANCE
• ASX-listed oil and gas company with a strategy to grow an integrated petroleum business through high impact exploration
• Focused on South East Asia and East
Africa
• Operator of the producing Galoc oil field in the Philippines, which provides cashflow
COMPANY OFFICERS Rick Crabb Chairman Ian Macliver Director Rufino Bomasang Director
John Jetter Director Ian Boserio Director Matthew Allen CEO Craig Hasson CFO
Scott Blenkinsop Chief Legal Counsel
Company Secretary
Hawkeye is a high impact opportunity, well defined on modern high quality 3D seismic and demonstrating an amplitude response consistent with a significant oil prospect. Hawkeye has a Best Estimate Oil In Place volume of 480 MMbbl and Best Estimate recoverable volume of 74 MMbbl net to Otto, post farm-down to PNOC-EC. There is further material upside contained in other identified prospects and leads in SC55.
Matthew Allen, Otto's CEO said: "Otto Energy is very pleased to welcome a partner of the quality of PNOC Exploration Company into SC55. PNOC-EC bring substantial experience in the Philippines oil and gas industry to the SC55 joint venture. We look forward to progressing the high impact exploration program with the Hawkeye-1 well in SC55 with PNOC-EC and our joint venture partners. Otto notes that the cost of this upcoming exploration program is likely to be considerably reduced as weaker oil prices impact on rig and contractor rates".
Head Office 32 Delhi Street, West Perth WA 6005 Australia PO Box 1414, West Perth, WA 6872 Australia T: +61 8 6467 8800 F: +61 8 6467 8801
Manila Office 32nd Floor Philamlife Tower, 8767 Paseo de Roxas, Makati City 1226, Philippines T: +63 2 773 2700 F: +63 2 773 2801 [email protected] ASX Code: OEL ABN: 56 107 555 046
Yours faithfully
Matthew Allen
Chief Executive Officer
Contact: Matthew Allen
Chief Executive Officer
+61 8 6467 8800 [email protected]
Media:
Matthew Gerber
MAGNUS Corporate and Financial Communication
+61 2 8999 1002 [email protected]
Persons compiling information about hydrocarbons
The reserve and contingent resource information in this report is based on information compiled by Mr Paul Senycia BSc (Hons) (Mining Engineering), MAppSc (Exploration Geophysics), who has consented to the inclusion of such information in this report in the form and context in which it appears. Mr Senycia is a full time employee of the Company, with more than 30 years relevant experience in the petroleum industry and is a member of The Society of Petroleum Engineers (SPE).
Reserves and Contingent resources have been estimated using both probabilistic and deterministic methods. Otto is not aware of any new information or data that materially affects the assumptions and technical parameters underpinning the estimates of reserves and contingent resources and the relevant market announcements referenced continue to apply and have not materially changed.
The estimated quantities of petroleum that may potentially be recovered by the application of future development projects relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.
Joint Venture Partners (post farm-down to PNOC-EC):
Participant
|
Participating
Interest %
|
Otto Energy Investments Ltd
(Wholly owned subsidiary of Otto Energy Ltd (ASX: OEL))
|
33.18
|
Otto Energy Philippines Inc.
(Wholly owned subsidiary of Otto Energy Ltd (ASX: OEL))
|
45.00
|
Palawan55 Exploration and Production Corporation
(Wholly owned subsidiary of Trans-Asia Petroleum Corporation)
|
6.82
|
PNOC Exploration Corporation
|
15.00
|
Head Office 32 Delhi Street, West Perth WA 6005 Australia PO Box 1414, West Perth, WA 6872 Australia T: +61 8 6467 8800 F: +61 8 6467 8801
Manila Office 32nd Floor Philamlife Tower, 8767 Paseo de Roxas, Makati City 1226, Philippines T: +63 2 773 2700 F: +63 2 773 2801 [email protected] ASX Code: OEL ABN: 56 107 555 046
Appendix:Hawkeye Prospect, offshore SW Palawan Basin, Philippines
SC55 contains a number of distinct exploration play types that provide material opportunities, including the Hawkeye turbidite clastic prospect and a significant carbonate gas/condensate trend that has the potential for an oil charge.
The Hawkeye prospect was identified on 2D seismic originally acquired by Otto in 2007 and further defined with the 600 km2 3D seismic acquisition in late 2009. Hawkeye contains:
• 'Best Estimate' STOIIP of ~ 480 MMbbl of oil; and
• 'Best Estimate' Net Prospective Resource of 74 MMbbl of oil.
Hawkeye is planned as a vertical exploration well to test the clastic late Miocene Pagasa formation. Hawkeye is a thrusted, four way closure with direct amplitude support evidenced on high quality 3D seismic acquired in late 2009. Otto plans a simple exploration well to target the Hawkeye structure. The well will be plugged and abandoned upon completion of drilling.
Otto has operated in the Philippines for over 10 years and regards the fiscal terms as amongst the best in
Asia. The Philippine fiscal terms assist with protection from low oil price outcomes.
Hawkeye Prospect
Areal Closure: 50km2
Hawkeye Flat Spot (DHI)
Second Flat Spot
(DHI)
Head Office 32 Delhi Street, West Perth WA 6005 Australia PO Box 1414, West Perth, WA 6872 Australia T: +61 8 6467 8800 F: +61 8 6467 8801
Manila Office 32nd Floor Philamlife Tower, 8767 Paseo de Roxas, Makati City 1226, Philippines T: +63 2 773 2700 F: +63 2 773 2801 [email protected] ASX Code: OEL ABN: 56 107 555 046