Otto Energy starts new Galoc oil field drilling

MANILA, Philippines - Australian firm Otto Energy Ltd. has successfully started new drillings at the Galoc oil field in Northwest Palawan, the company said in a disclosure to the Australian Securities Exchange.

In its report, Otto Energy said it has already drilled 400 meters each for both Galoc-5H and 6H development wells.

The target is to complete drilling on both wells to 950 meters.

Drilling is expected to take approximately 115 days including the flowing of the wells for clean-up.

Otto Energy has mobilized the drilling rig “Ocean Patriot” from Singapore.

Galoc-5H and Galoc-6H drillings are part of the Galoc Phase II development approved by the drilling consortium last year.

The Galoc joint venture partners last year approved the Galoc Phase II development and expects first oil to flow in the fourth quarter of 2014.

Early this month, Otto Energy announced the entry of Kuwait Foreign Petroleum Exploration Co. (Kufpec) as partner in the Galoc project.

Otto Energy, the main operator of Galoc, holds a 33 percent working interest in the project. Kufpec assumed control of 26.84473 percent working interest in the joint venture project following its acquisition of Risco Energy Pte Ltd., the parent firm of Galoc Production Co.

The Galoc field consortium is eyeing first oil to flow from the drilling of two additional wells by the first half, bringing total daily production to about 12,000 barrels per day.

Total investment cost for Galoc Phase II project is $188 million of which Otto Energy’s share is $62 million representing its 33 percent interest.