Otto Energy Limited (ASX:OEL)
Perth, May 1, 2009 AEST (ABN Newswire) - Otto Energy Limited (ASX:OEL)(PINK:OTTEF) announce an operations update from a quarterly reported ended 31 March 2009.
PHILIPPINES
Otto's working interests in all of its Filipino Service Contracts are held through Otto's 100% owned subsidiary, NorAsian Energy Limited ("NorAsian").
SC14C1 - Galoc Oil Field
Otto has a 31.38% shareholding in the Galoc Production Company W.L.L. ("GPC"). GPC is the Operator and holds 58.29% working interest in the SC14C1 license. This gives Otto an 18.28% indirect interest in the field. A subsidiary of the Vitol Group owns the remaining stake (68.62 %) of GPC.
Production from the Galoc Oil field recommenced on 25 February 2009, following a shutdown to repair and enhance the mooring and riser systems. Total gross production from the field for the quarter was 494,871 barrels.
At the end of the Quarter cumulative oil production, since start up in October 2008, had passed 1.3 million barrels. Since the recommencement of production in February the field has been producing at a rate of approximately 13,000 - 14,000 barrels of oil per day with a 95%-100% daily operating uptime. Benefits from infrastructure and operational improvements made during the shutdown include:
- Decreased operating expenditure through fuel cost savings;
- Increased production uptime; and
- A simpler process for more controlled disconnections (during typhoon season).
It is important to note that although the operational improvements undertaken will increase the FPSO's stability during inclement weather, they will not remove the need for disconnection from the system to occur when typhoons cross the field.
During the Quarter, the total volume of oil lifted from the FPSO was 207,764 barrels (50,670 barrels net effective share to Otto). Four offtakes of crude oil have been successfully completed between October 2008 and March 2009 at an average price of approximately US$44.40 per barrel. The fifth offtake is scheduled to take place in early May 2009.
Service Contract 55 (OEL 85%)
On 3 April 2009, Otto announced that the conditional heads of agreement ("HoA") to farm out 60% of its equity in SC55 to BHP Billiton Petroleum Pty Limited ("BHP Billiton") had lapsed. The HoA with BHP Billiton was conditional on a number of obligations including finalising farm-in and joint operating agreements and obtaining all necessary government and joint venture approvals by 31 March 2009. These necessary conditions and approvals were not achieved and consequently the HoA lapsed.
SC 50 - Calauit Oil Fields (OEL 99% WI)
Otto continues its discussions with the Philippines Department of Energy in relation to seeking an extension on its current sub-phase commitments.
SC 51 (OEL 80% WI)
Otto continues its discussions with the Philippines Department of Energy in relation to seeking an extension on its current sub-phase commitments.
SC 69 (70% WI)
Otto has received the seismic data reprocessed for SC69, which is now being interpreted by Otto's Geoscience team.
TURKEY (OEL holds 35% WI in the Edirne Licence)
Six commercial gas discoveries have been made to date with a number of prospective leads for follow up. During the Quarter, commercialisation of the project was progressed with Gas Sales Agreement negotiations underway. First gas sales are anticipated in Q4 2009.
During the Quarter Otto relinquished its interest in the Catalca and Ortakoy licences and the licenses were transferred to the Operator.
ITALY (OEL earning 50% WI)
Otto is earning a 50% Working Interest by funding one firm and one contingent well in the Cento-Bastiglia permits in the Po Valley, onshore Italy. The first exploration well Gazzata-1, is expected to spud mid May 2009. The Operator of the field is AIM-listed Ascent Resources Plc.
ARGENTINA (OEL earning 32.48% WI)
Otto is earning a 32.48% Working Interest by paying the first US$1.4 million of exploration expenditure in the Santa Rosa Permit. Thereafter, Otto will be paying its working interest share of the agreed work program and budget in 2009 for up to two onshore exploration wells, targeting oil.
Drilling is expected to commence in May/June 2009. The operator of the permit is TSE-listed Oromin Exploration Ltd.
CORPORATE
During the Quarter the Company completed an institutional placement of 73.9 million shares at $0.07 per share to raise $5.17 million.
The Company also secured an additional US$2 million in debt funding from two of its major Shareholders, Santo Holding AG and Molton Holdings Ltd increasing the total Shareholder Loans to US$7 million. Otto Directors also provided the Company with short term loan funds of $1.53 million.
The funds from the Shareholders and Directors loans are being used to meet short term expenditure commitments and will be repaid from the funds raised pursuant to the Entitlement Issue outlined below.
Subsequent to the end of the Quarter on 3 April 2009 the Company announced a restructured capital raising to raise up to $26.3 million which comprised:
- a 3 for 4 pro-rata Entitlement Issue at $0.05 per share to raise a maximum of approximately $21.2 million; and
- a placement at $0.07 per share to raise approximately $5.1 million (subject to necessary shareholder approvals).
For the complete Otto Energy Quarterly Report, please see the link below;
http://www.abnnewswire.net/media/en/docs/60585-ASX-OEL-445562.pdf
Contact
Jill Thomas
Investor Relations Manager
Tel: +61-8-6467-8800
Mobile: +61-439-440-016
Email: thomas@ottoenergy.com
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