21st Jan 2014 07:50
MELBOURNE (Alliance News) - Otto Energy Limited said Tuesday that it has executed final binding agreements with BHP Billiton Petroleum (Philippines) Corporation or BHPB to terminate the farm-out agreement between the two parties over Service Contract 55 or SC55, offshore the Philippines.
Otto noted that it has submitted a request to the Philippines Department of Energy or DOE for re-assignment of BHPB's 60% working interest to Otto, taking Otto's working interest in SC55 to 93.18%.
Following approval of the re-assignment by the DOE , BHPB will pay USD3 million to Otto, and Otto will lodge a Sub-Phase 4 work program and budget with the DOE, to drill the Hawkeye-1 exploration well.
BHPB will also pay USD24.5 million to Otto upon completion of drilling the first exploration well in SC55; and BHPB has no rights to any future exploration outcomes or obligations.
Otto noted that it has briefed the DOE of its intention to drill the 3D seismically defined and Direct Hydrocarbon Indicator supported Hawkeye-1 exploration well in Sub-Phase 4.
Hawkeye is a turbidite clastic reservoir target in 1,690 metres of water with top reservoir prognosed to be at 2,732 metres. Drilling could commence as early as fourth-quarter of 2014.
The permit provides a significant opportunity and a series of possible drilling targets in an exploration campaign that will be undertaken during the remaining terms of the service contact.
Copyright RTT News/dpa-AFX
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