Gulf Coast Package
Under a Joint Exploration and Development Agreement (JEDA) with Hilcorp Energy Otto committed to an eight well drilling program with an estimated cost of US$75 million (100%). Four wells in the program have been drilled as of 7 November 2019 - see below.
Otto will earn a 37.5% working interest by paying 50.0% of the costs of drilling and either setting casing or plugging and abandoning the well plus lease acquisition costs at each of the eight prospects.
Should either the Tarpon or Mustang prospects be successful then Otto has ground floor rights (ie pays only its working interest) to participate in the nearby Damsel and Corsair/Hellcat opportunities. These wells are in addition to the eight wells.
Under the JEDA Otto has a right of first offer to a subsequent Gulf Coast program, if Hilcorp elect to offer such a program to third parties.
About Hilcorp Energy
Founded in 1989, Hilcorp is one of the largest privately held oil and natural gas companies in North America. Hilcorp specializes in reinvigorating legacy oil and gas fields across North America; including in the US Gulf Coast, Alaska and the Rockies and currently produces approximately 325,000 boepd. To put this into context, Australia’s largest oil and gas company, Woodside, produces ~230,000 boepd.
Hilcorp has nearly 2,000 employees and has been consistently recognized for its strong culture, values and ethics both within the firm and in the communities in which it operates.
Otto is very pleased to be partnering with a Gulf Coast operator with proven capability to take exploration prospects into production.
Details of the Drilling Program
Four wells have now been drilled (Big Tex, Lightning, Don Julio 2 and Mustang) with Lightning being a discovery.
Lightning was a discovery with net pay of 180 feet which is significantly in excess of the pre-drill estimates.
The well is now in production. Further details on Lightning are covered in the production section of this website.
On 7 November 2019, Otto announced the Thunder Gulch #1 exploration well at Mustang was deemed non-commercial and will be plugged.
Through participation in the drilling of the Thunder Gulch #1 exploration well, Otto has earned a 37.5%
working interest in the leases covering the entire prospect as well as Corsair and Hellcat structures.
Refer to the ASX release “Otto Farms in to Eight Well Gulf Coast Package with Hilcorp” dated 31 July
2018 for further details on the overall Hilcorp Gulf Coast eight well program.