Otto Energy to start Leyte drilling in March

MANILA, Philippines –  Australia-based oil exploration firm Otto Energy Ltd. said yesterday it will soon start drilling in Service Contract 51 in Northwest Leyte.

“Barring any unforeseen delays, drilling is expected to commence by early March of 2011 and will take approximately 27 days to complete,” said Paul Moore, Otto managing director.

He said subsidiary NorAsian Energy Phils. Inc. had already commissioned Desco Inc. to deploy a land rig to be used for the exploration drilling.

SC 51 comprises two areas – onshore Leyte in the north and the islands of Cebu and Bohol in the south. Its prime feature is the Argao prospect, according to a 3D seismic study in 200 meters of water in the Cebu Strait.

In a disclosure to the Australian Stock Exchange, Moore said Desco will drill the Duhat-1 exploratory well in Northwest Leyte on the northern block of the service contract.

Desco is a local service provider of energy related businesses.

The Duhat-1 well is designed to reach a total vertical depth of 1,000 meters.

The well will test the hydrocarbon potential of the San Isidro anticline “primarily in Miocene Tagnacot Formation limestone and sandstone targets” where a resource potential of up to 62 million barrels recoverable oil has been identified.

According to Moore, the Department of Energy(DOE) gave the company the go-signal to proceed with the drilling of Duhat-1 well and will satisfy the work commitment of the joint venture under the third sub-phase of the service contract.

Otto, through NorAsian, owns 80 percent of SC 51 and is operator of the area which covers a total 3,320 square kilometers.

NorAsian’s partners in the contract area are Trans-Asia Oil and Energy Development Corp., Alcorn Gold Resources Corp. and PetroEnergy Resources Corp.

Earlier, Otto said it is in discussions with a prospective farm-in partner, which it did not identify, to participate in the Ducat-1 well upon agreement and satisfaction of conditions precedent to the agreement.