During August Otto undertook the drilling of the Hawkeye-1 exploration well. The well reached total depth of 2,920m below the rig rotary table around the middle of the August.

The primary target Miocene reservoir was intersected at 2,712m. Hydrocarbons were logged between 2,712m and 2,740m in good quality reservoir and cutting returns provided indications of fluorescence consistent with liquid hydrocarbons. Below 2,740m, a fluid contact was observed, with indications of good quality reservoir but water bearing.

The Hawkeye well was then, as planned, plugged and abandoned.

The drilling program was executed smoothly, ahead of schedule and ahead of budget. Otto was fully carried on the cost of drilling the Hawkeye well.

The Hawkeye well has proven the existence of hydrocarbons in SC55. The hydrocarbon size discovered is at the very low end of expectations and is not economic to develop. Otto will now incorporate the results from the well into our understanding of the other prospects, including Cinco, in SC55 and determine if further activity is warranted.

The Cinco prospect was identified as part of the 2010 1,800 km2 3D seismic program undertaken by BHPBP that focused on a trend of carbonate prospects and leads. Cinco is analogous to the Malampaya producing gas/condensate field, which is located 400 km north east of the permit. Cinco contains

• 'Best Estimate' GIIP of 2.4 Tcf; and

• 'Best Estimate' Net Prospective Resource of

1.1 Tcf of gas and 38 MMbbl of associated condensate (Condensate Gas Ratio

35 bbls/MMcf), assuming 78.18% working interest for Otto and net of Government Share.

The Joint Venture entered Years 3 and 4 of the Pangani and Kilosa-Kilombero Production Sharing Agreements, involving a commitment to drill one exploration well in each contract area before February 2016 and the acquisition of additional seismic data. In August, the Tanzanian regulator approved an extension to the initial exploration term. Drilling of the first wells must now be undertaken prior to February 2017.

Kilosa-Kilombero Permit

A total of 110 km of 2D seismic was acquired over the Kilombero basin in 2013. Results suggest the presence of a Neogene-age basin with a maximum depth to basement in excess of 3,000m. The age of the sediments recorded (based on low seismic velocities) appears to be similar to that of sediments observed in the now proven oil basins of Lokichar (Kenya) and Lake Albert (Uganda), where Africa Oil (TSX.V:AOI) and Tullow Oil (LSE: TLE) have had significant success.

Dip lines across the basin suggest the presence of both structural traps and traps against the main basin- bounding fault, with possible Direct Hydrocarbon Indicators (DHIs or 'Flat Spots') observed at several levels at the crest.

A 2014 program to acquire 430 km of additional 2D seismic data across the Kilombero basin was undertaken during Q4 2014. The focus of the program was to:

1. Provide additional lines across the 'Kito' prospect that may become a drillable target.

2. Cover other portions of the basin which according to the initial 2013 seismic data and earlier remote sensing data have the potential to contain additional leads and prospects.

The new 2D data has been processed and detailed technical evaluation of same was completed during Q3 2015. Kito well planning is now underway.

Pangani Permit

A total of 200 km of 2D seismic has been acquired over the Mvungwe and Moshi basins.

The results from the survey show that the Moshi basin in the north of the permit appears to be a basin with sedimentary fill of probable Neogene age. Further evidence from the seismic survey suggests that the basin is fault-bounded, some 25 km wide, and with basin fill to between 2,000 and 3,000m depth.

During Q3 2014, a further 200 km of 2D seismic data was acquired across the Moshi basin area. The focus of this survey is to better understand the geometry of the basin and firm up structures for drilling.

Processing of the new data has been completed and a thorough technical analysis was completed during Q3 2015.

Moshi Basin

Pangani PSA

Recent seismic data reveals a significant Neogene basin in both Contract Areas

Kilombero Basin Kilosa Kilombero PSA

50 km

Kito prospect approx. location

In August 2015, Otto acquired the right to earn an interest, through staged capital injections, in a substantial acreage position on the highly prospective, oil prone, onshore Alaskan North Slope held by Great Bear Petroleum Operating ('Great Bear').

Through its agreements with Great Bear, Otto acquired an 8% and 10.8% working interest (equivalent to 58,334 net acres) in two areas of Alaskan North Slope exploration acreage held by Great Bear.

Great Bear is a private exploration company focused exclusively on exploring and developing conventional and unconventional resources on the North Slope of Alaska.

Great Bear is the dominant exploration acreage holder in this highly prospective basin; holding 579,374 gross acres in a major play fairway south of the Prudhoe Bay and Kuparuk fields. Great Bear has undertaken significant exploration work on the acreage since 2011 with a cumulative spend in excess of US$200 million, supported by generous tax rebates from the State of Alaska.

This work includes:

• Acquisition and processing of approximately 1,800 km2 of 3D seismic data.

• Drilling of two unconventional stratigraphic test wells which cored three primary unconventional targets. Results from these wells indicate that the majority of the Great Bear acreage is expected to be liquids rich. These wells also encountered light oil in various conventional formations.

• Drilling of a conventional exploration well (Alkaid-1) which specifically targeted a 3D defined Brookian reservoir. The Alkaid well results are under evaluation.

The extensive, modern 3D seismic coverage, existing well control and proximity to the all-weather Dalton Highway and Trans-Alaskan Pipeline System (TAPS) means that the Great Bear joint venture is well positioned to test numerous prospects during the 2015/16 and 2016/17 northern winter drilling seasons.

On 30 September, Otto elected to make a further staged payment to Great Bear securing tenure to the acreage and concluding the farmin obligations.