Service Contract 55, Offshore Palawan
Ownership: Otto Energy 78.18% (and Operator), Red Emperor 15%, Palawan 55 6.82%
Location: Offshore - Palawan Basin, Philippines
Area: 9,880 km2
Hawkeye prospect on track to be drilled in July 2015
Fully funded for drilling of Hawkeye-1 well following successful farm down process and $US24.5m funding from BHP Billiton
'Best Estimate' Net Prospective Resource of 89MMbbl
Success at Hawkeye will unlock a significant new hydrocarbon play in the deep water Southern Palawan region
Material follow up potential already mapped on 3D seismic*
Service Contract 55 (SC55) is a deep-water block located in the southwest Palawan Basin, covering an area of 9,880km2. The block is in the middle of a proven regional oil and gas fairway that extends from the productive Borneo offshore region in the southwest, to the offshore Philippine production assets northwest of Palawan. SC55 is not located in disputed territory.
SC55 contains a number of distinct exploration play types including the Hawkeye turbidite clastic prospect and the material Cinco carbonate gas/condensate prospect, as well as a number of follow-up leads.
Hawkeye contains a 'Best Estimate' STOIIP of ~ 480 MMbbl of oil and a 'Best Estimate' Net Prospective Resource of 89 MMbbl of oil.
Cinco contains a 'Best Estimate' GIIP of 2.4 Tcf with a 'Best Estimate' Net Prospective Resource of 1.3 Tcf of gas and 45 MMbbl of associated condensate (Condensate Gas Ratio 35 bbls/MMscf). The Net Prospective Resources reflect working interest post re-assignment for Otto of 93.18% and excludes Government Share of profit oil.
The arithmetically aggregated gas/condensate prospect and lead inventory including Cinco, contains a 'Best Estimate' GIIP of ~ 17 Tscf with a 'Best Estimate' Net Prospective Resource of ~ 9 Tscf of gas and 320 MMbbl of condensate.
Service Contract 55 (SC55) was awarded to Otto Energy Investments Ltd (a subsidiary of Otto Energy) in 2005, shortly after Otto Energy’s listing on the ASX in 2004.
The Hawkeye prospect was identified on 2D seismic originally acquired by Otto in 2007 and further defined with the 600 km 3D seismic acquisition in late 2009.
The Cinco gas/carbonate prospect was identified as part of an 1,800 km 3D seismic program undertaken by BHP Billiton in 2010 that focused on a trend of carbonate prospects and leads,
with Cinco being analogous to the Malampaya producing gas/condensate field in the Philippines.
In May 2011, BHP Billiton exercised an option to farm-in to SC55. The farm-in agreement resulted in Otto transferring 60% working interest and operatorship of SC55 to BHP Billiton, in return for a carry on two deep-water offshore wells and reimbursement of prior costs incurred in the contract area.
In November 2013, BHP Billiton advised Otto of its intention to withdraw from the SC55 licence, and later that month Otto secured the right to reassume BHP's 60% working interest. As part of the termination agreement BHP Billiton agreed to fund US$24.5million of the costs toward the drilling of an exploration well, which Otto will call upon for the drilling of Hawkeye.
Otto has conducted a successful farm out process which has introduced Red Emperor Resources as 15% joint venture partner in SC55, with PNOC expressing interest in a 15% interest.
Having completed drilling planning operations including well design, planning studies and procurement Otto has secured the Maersk Venturer ultra deep-water drill ship to drill the Hawkeye well. The company is currently conducting final preparations for the drilling with expected spudding of the Hawkeye-1 well in late July 2015.