29 October 2014

Manager of Company Announcements

ASX Limited

Level 6, 20 Bridge Street

SYDNEY NSW 2000

By E-Lodgement

Kilombero Seismic Identifies Evidence of Multiple New

Structures

Otto Energy Limited ("Otto", ASX:OEL) is pleased to provide an update on the current seismic survey being carried out in the Kilombero Basin, Tanzania. Otto Energy Tanzania Pty Ltd (a wholly owned subsidiary of Otto) has a 50% participating interest in the Kilosa-Kilombero licence.

The seismic survey is being carried out by Otto's joint venture partner and Operator Swala Oil and Gas (Tanzania) Plc, a wholly owned subsidiary of Swala Energy Limited ("Swala", ASX:SWE).

A copy of Swala's announcement of today follows this announcement.

Otto shares Swala's assessment that:

1. The survey provides first evidence of multiple structures along the western basin boundary fault.

2. The seismic data supports the view of the similarities between the Kilombero and Lokichar Basin in Kenya, where Tullow Oil and Africa Oil have made a significant number of discoveries.

OTTO AT A GLANCE

• ASX-listed oil and gas company with a strategy to grow its oil and gas business across exploration, development and production

• 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 Company Secretary

Matthew Allen, Otto's CEO said: "We share Swala's excitement

in the early results of the Kilombero seismic survey given the

similarities that are emerging with the large oil discoveries being made in the Lokichar Basin in Kenya. The ongoing seismic acquisition and subsequent interpretation is intended to mature these possible new structures to prospect status and they could become drilling candidates for the planned 2015 drilling program.

Otto is very encouraged by this new data and how the Kilombero basin is maturing and looks forward to delivering, with our operator Swala, the first exploration well in 2015 to test the prospectivity of this emerging new basin."

Yours faithfully

Matthew Allen

Chief Executive Officer

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

Contact: Craig Hasson

Chief Financial Officer

+61 8 6467 8800

[email protected]

Media:

Matthew Gerber

MAGNUS Investor Relations + Corporate Communication

+61 2 8999 1002

[email protected]

Swala Announcement Follows.

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

SWALA ENERGY LIMITED ACN 161 989 546

ASX Release (ASX: SWE) 29th October 2014

Kilombero Seismic Showing Evidence of Multiple Structures

Swala Energy Limited ("Swala" or "the Company") is pleased to announce that the seismic survey being carried out in the Kilombero Basin by Swala Oil and Gas (Tanzania) Plc ("Swala Tanzania") has provided the first evidence of multiple structures - a 'string of pearls'- along the western basin boundary fault. Swala has a 29.2% net interest in the Kilosa-Kilombero licence in central Tanzania. Otto Energy Limited (ASX: OEL) has a 50% participating interest in the Kilosa-Kilombero licence.
The seismic survey was planned after the 2013 seismic survey suggested structural similarities between the Kilombero Basin and the Lokichar Basin in Kenya, where Tullow Oil (LSE:TLW) and Africa Oil (AOI:TX) have made a significant number of discoveries. The 2013 seismic survey also identified the Kito Prospect. As per the Company's ASX release of the 11th December 2013, the Kito Prospect could contain P50 Best Estimate contingent resources of 60.4mmbbls net to Swala Tanzania (35.3mmbbls net to Swala).
The first line of the current seismic survey acquired in the Kilombero Basin, Line 101, extends along the strike of the main bounding fault. Initial interpretation of the data suggests the presence of four new structures, each being 5-10km long. At the northern end of Line 101, just beyond the Kito Prospect, the data show that one of the identified reservoir horizons is rising, potentially indicating the presence of another structural closure (See Figure 1).
The data supports the initial views on the similarities between the Kilombero and Lokichar Basins (see Figure 2). The Kilombero structures are interpreted as roll-over anticlines against the major north-south fault on the western side of the basin (and lying behind the section shown). These anticlines are of similar structural style to those in the Lokichar Basin, many of which are now discoveries, such as Ngamia-1 and Twiga South-1.
The seismic survey will now acquire a series of infill dip seismic lines across the structures to test the extent to which they extend into the basin. The survey will extend to the eastern and northern sides of the basin to determine any further structural leads and this will be followed by further dip lines over any leads. Swala expects the survey will be completed by the end of the year after which the results will be interpreted in order to select one or more targets for a 2015 drilling programme.
Dr. David Mestres Ridge, Swala's CEO said "These early results of the Kilombero seismic survey are particularly exciting and the similarities with the Lokichar Basin are extremely encouraging given the enormous success that has been achieved there to date. The seismic survey has so far identified five possible structures in addition to the Kito Prospect and we believe further dip lines will cement these into firm drilling candidates and that the extension of Line 101 further north will result in more structures being identified."

Swala Energy Limited

70C Kishorn Road, Mount Pleasant, WA 6153, Perth, Australia

Telephone: + 61 (0)8 6270 4700 Fax: + 61 (0)8 6314 4675 www.swala-energy.com

Figure 1: Seismic composite Strike line (101-001) along the Kilombero main bounding fault.

Figure 2: Cross section across the Lokichar Basin, showing the structural similarity between this basin and the Kilombero Basin. Discoveries, leads and prospects are highlighted. (source Africa Oil Presentation, Africa Oil Week 2013). (The vertical scales is similar to Figure 1)

For further information please contact:
Swala Energy Limited
David Mestres Ridge (CEO) T: +61 8 6270 4700 [email protected] www.swala-energy.com
Walbrook Investor Relations
Ben Knowles
T: +61 8 6189 2231
M: +61 426 277 760 [email protected]

Swala Energy Limited

70C Kishorn Road, Mount Pleasant, WA 6153, Perth, Australia

Telephone: + 61 (0)8 6270 4700 Fax: + 61 (0)8 6314 4675 www.swala-energy.com

About Swala:

Swala Energy Limited is an Australian oil and gas company listed on the Australian Securities Exchange ("ASX") under the ticker code "SWE". Swala's holdings are predominantly in the world- class East African Rift System with a total net land package in excess of 18,000km2 in Kenya, Tanzania and Zambia. New discoveries have been announced in a number of licences along this trend, including Ngamia, Twiga and Etuko, which extend the multi-billion barrel Albert Graben play into the eastern arm of the rift system. Swala has an active operational and business development programme to continue to grow its presence in the promising hydrocarbon provinces of Africa.

Swala Energy Limited

70C Kishorn Road, Mount Pleasant, WA 6153, Perth, Australia

Telephone: + 61 (0)8 6270 4700 Fax: + 61 (0)8 6314 4675 www.swala-energy.com