Otto Energy Step Closer to Area 7 (Philippines)

Otto Energy Ltd, has been named as the preferred bidder for Area 7 under the Fourth Philippine Energy Contracting Round.

The final award is subject to execution of the final form of the Service Contract and supporting documentation between Otto Energy and the Philippines Department of Energy. Upon execution, Otto will commit to reprocessing the existing seismic study with a minimum financial commitment of US$0.5 million within an initial period of 18 months.

Area 7 is an offshore block located in the southern part of the Mindoro Basin – Cuyo Platform, a continental rift basin offshore the Philippines. It covers around 8,440 km2 with water depths ranging from 100 metres to 1,300 metres. There is an existing 2D seismic data set of over 3,000 kilometres covering the block.

The petroleum play types identified in Area 7 are reef build-ups, fault blocks and anticlines. The reservoir intervals are Early Miocene to Pliocene carbonates and Early to Late Miocene carbonates and clastics. Source rocks are coaly and organic-rich claystones of Eocene to Middle Miocene. Middle Miocene carbonates and clastics provide the seal for the system.

Oil has been discovered with an Extended Production Test conducted in 1994 at the Maniguin wells near the block. The occurrence of oil seepages in the Mindoro Island region also confirms the presence of an active petroleum system in the area.

Otto Chief Executive Officer Gregor McNab said: “I look forward to successfully executing the final Service Contract documents for Area 7. The addition of this new exploration acreage is consistent with our strategy to build an integrated exploration, development and production company focused on South East Asia and East Africa. Area 7 has the potential to restock our existing, high impact, exploration prospect inventory that is already feeding our active drilling program through the rest of 2013.”

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Press Release, February 22, 2013