OTTO ENERGY LIMITED - ASX: OEL

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Description

Otto Energy has experienced significant growth since it listed on the ASX in 2004. The Company has assembled a balanced portfolio of highly prospective onshore and offshore oil and gas projects across four countries: The Philippines, Turkey, Italy and Argentina. In October 2008, Otto transformed from sole explorer to an explorer/producer with production commencing at the Galoc oil field in the Philippines.

Philippines

Otto is currently one of the largest landholders of prospective acreage in the Philippines, through the Company's wholly-owned subsidiary NorAsian Energy Ltd. Otto has an 18.77% indirect interest in the Galoc Oil Field, located in Service Contract (SC) 14C offshore Philippines, via a 31.38% shareholding in the field Operator, Galoc Production Company WLL (GPC). GPC holds 59.84% equity in the Field. Otto became Operator of SC50, SC51 and SC55 following acquisition of NorAsian in 2005/06. In May 2008, the Philippines Department of Energy (DOE) awarded NorAsian the fourth permit for SC69.

SC50 (Otto 85%) holds the Calauit and Calauit South Oil Fields which were discovered in 1991/92. The fields lie in shallow water depths that range from 50m to 100m and the area is situated at the northeast of the oil and gas prolific Palawan Basin. v

SC51 (Otto 80%) is situated in the East Visayan Basin in the central Philippines. The area consists of a northern and southern part with the two areas being separated by a distance of approximately 80km. The large Argao & Bahay prospects are located in the south block, with over 9 additional leads recently defined from modern 2D and 3D seismic.

SC55 (Otto 85%) covers an area of 9,000km2 in the southwest Palawan Basin. It is a deepwater block in the middle of a regional oil and gas fairway, which extends from the productive region offshore Borneo in the southwest to the Philippine production assets in the northeast including the Malampaya oil and gas field, which is currently the largest producer of condensate and gas in the Philippines.

SC69 (Otto 70%) was awarded to Otto/NorAsian in May 2008, and is located offshore in the East Visyan Basin adjacent to SC51. It has more than 20 identified structures with oil and gas potential.

SC14C (18.28% indirect) Offshore northwest Palawan basin, SC14C is in midwater depths and contains the Galoc Oil Field. Galoc field commenced production in October 2008.

Turkey

Otto holds a 35 per cent interest in the Edirne Licence onshore Thrace Basin of Western Turkey. The Edirne licence was originally acquired by Otto in 2004 but is now a non operated asset, operated by joint venture partners Petroleum Exploration Mediterranean Int. (55%) and a local Turkish company Petraco (10%). To date, seven gas discoveries have been made on the licence for a total of approximately 10-20 Bcf (gross) of discovered gas. Well testing was successfully completed in June 2008 and testing has continued in June/July 2009. Otto Energy and its joint venture partners have awarded two contracts for the design and engineering of a gas processing plant and pipeline for the development of the Edirne gas fields in Western Turkey. The Turkish Energy Market Regulatory Authority (EMRA) granted the JV a wholesale gas licence. The JV will be the first to produce and sell onshore Turkish gas directly into the extensive "Botas" gas distribution network, which enables the sale of gas anywhere in Turkey for the best possible price, at a discount to the Botas price. Negotiations for Gas Sales Agreement is underway and then development of the field with production expected to commence in Q1 2010. This low cost exploration and development project is teamed with a good fiscal regime and a robust domestic gas price. It will become Otto's second producing asset and source of cash flow.

Italy

Italy is a new country entry for Otto into the established Po Valley area, which has good infrastructure and high gas prices. Otto Energy has 50% working interest in the onshore Bastiglia-Cento Exploration Permits. Otto's joint venture partner and field Operator is Ascent Resources Plc. The two adjacent Bastiglia-Cento Exploration Permits are considered highly prospective and have multiple hydrocarbon prospects and leads already identified from previous seismic data. The Joint Venture will be drilling targets between regional highs that all have established hydrocarbon fields found in the 1960/70s. The first well, Gazzata-1, was drilled during May/June 2009. The well intersected a series of sand/shale sequences below 2,300 metres and was drilled to a total depth of 2,840m. Wireline logs were run and interpretation of the log data did not indicate any commercial gas zones. The well was subsequently plugged and abandoned as a dry hole. The Joint Venture is currently reviewing data from the well logs with a view to ascertaining next steps for the future exploration programme.

Argentina

Otto confirmed in May 2008 that the Company was awarded the Santa Rosa Licence, located in the Cuyana Basin in the Province of Mendoza, Argentina, for a six-year exploration period. Otto has earned a 32.48% working interest in the licence. The farm-in agreement is with Canadian-listed Oromin Explorations Ltd, operator of the field, through the Argentina subsidiary Exploraciones Oromin S.A. The exploration well 'OLE.MD.SRE X-2001' was spudded on 15 July 2009 (Mendoza time). On 26 July 2009, the well reached a total depth of 1,270 m in basement. An initial electric logging evaluation confirmed that the well did not encounter hydrocarbons. The results suggest that the target reservoir zones are not present at this crestal well location. The Joint Venture will now study the well data and incorporate this in a regional data base to determine whether potential stratigraphic traps on the western flank of the Santa Rosa dome warrant further investigation.

Mine For

oil, gas

Location of operation(s)

Turkey, Philippines, Argentina, Italy

Address

32 Delhi St
WEST PERTH, WA, AUSTRALIA

Phone

(61 8) 6467 8800

Email

Website

http://www.ottoenergy.com

Last Updated

04/03/2010