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Publish Date : 18-Mar-2014

Otto Energy Ltd., gained control in Service Contract in Palawan the approval of the Department of Energy (DoE).

Otto said the DoE approved the reassigned of 60% equity in SC 55 from BHP Billiton Petroleum Corp. to Otto, taking Otto's interest to 93.18%.

Otto executed a final binding agreement with BHPB for the transfer of interest after the latter decided to withdraw from the contract.

The binding agreement provides reassignment, BHPB should pay Otto about $3 million.

The BHPB will also to pay $24.2 million to Otto during the drilling of the first exploration well in SC 55.

The Australian firm that it poised to introduce a new joint venture to participate in the drilling of the Hawkeye-1 exploration well.

Otto is targeting qualified partners with deepwater experience to join the exploration program and several suitable companies with SE (Southeast) Asia operations have commenced technical due diligence review of the available data.

The company started planning and preparations for the drilling of the exploration well which is targeted late this year.

Otto invited expressions of interest from drilling rig owners to determine availability of drilling units to drill the Hawkeye-1 exploration well the required timeframe.

Securing DoE approval for the reassignment of 60% equity and operatorship of SC55 is an important step in progressing our exploration program in this high impact area.

The combination of SC55 and the funding arrangement secured by Otto meaning that it will offer a very attractive exploration opportunity a farm-out campaign.

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