South Marsh Island 6 (SMI-6)


Ownership: 50.00% - Earning via staged farm-in with Byron Energy Ltd (Operator)
Status: Exploration
Location: Offshore Gulf of Mexico
Area: 20.23 km2

The SM-6 #2 well located at the South Marsh Island Block 6 was drilled to a depth of 8,084 feet (2,464 metres) Measured Depth in March 2016, and was temporarily plugged and abandoned. Unsuccessful attempts were made to free a stuck drill pipe in the initial well bore and a resulting bypass (side-track) operation also became stuck.  After an extensive review of both stuck drill pipe incidents, it was the conclusion of both Byron and Otto that it was not viable to deepen the well to the primary target in the G20 sand interval, approximately 320 feet (100 metres) below the current depth of the well.
Following completion of post well engineering, drilling and geology studies, Otto and Byron have decided not to attempt to re-enter the SM6 #2 well and complete drilling down to the G20 sand target interval as the activity is deemed high risk.
As the well did not reach the primary target of the G20 sand interval, Otto has not earned a working interest in SMI-6 and is not required to reimburse Byron for past costs.
The well has been drilled at a cost below the gross pre-drill cost estimate of US$8.0m and Otto’s funding will not exceed the US$5.3m outlined in prior announcements.  Otto’s share of costs to subsequently plug and abandon the SM-6 #2 well are expected to be approximately US$100,000.