South Marsh Island 70/71 (SMI-70/71)

South Marsh Island 70/71
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Ownership: 50.00% - Earning via staged farm-in with Byron Energy
Status: Exploration
Location: Offshore Gulf of Mexico
Area: 12.16 km2

Otto exercised its option to participate in the drilling of one well in SM 71 which lies in a water depth of 131 feet. Combined production from the SM 70 & SM 71 licences totals 5.9mmbo and 16Bcf of gas.

Through the drilling of the SM-71 #1 well in April-May 2016, Otto has earned a 50% participating interest (equal to a 40.625% revenue interest) in the licences with net 2P reported reserves of 2,271 Mboe to Otto.

Drilling of SM-71 #1 intersected four separate hydrocarbon bearing sand intervals of which three will ultimately be completed. The well bore has been temporarily suspended awaiting tie-in to production infrastructure. Otto expects that first production will be delivered in January 2018 from SM 71. Additional follow-up opportunities around this salt dome are being progressed.

In 2016 the joint venture procured a tripod platform to be modified for use at the SMI-71 location.

The manned structure will have the capacity to produce 4,500 Bopd and 5.0 MMcfpd of gas.  Access to adjacent oil and gas sales trunk lines are available on SM 71 and those lines will be utilized for oil and gas export once production commences. Refurbishment of the jacket section of the platform is complete and construction of the deck portions is well underway.

The joint venture plans to initially complete the SMI-71 #1 well in the D5 Sand with expectations of recording initial flow rates of 1,500 to 2,000 bopd (gross field production) similar to those recorded on the adjacent SM 72 and SM 73 blocks. In addition to the completion of the SMI-71 #1 well there is potential to drill up to four additional development wells, some of which will target Prospective Resources in the B65 interval which has scope to double the present on block reserves base. Interpretation of post drill seismic inversion data shows promising results defining the D5 sand extent and delineating the future B65 sand targets, the B65 sands contain a 2.3 MMboe Net Prospective Resource.