Otto Energy confirms new Galoc oil find

MANILA, Philippines - Australian firm Otto Energy Ltd. said drilling at the Galoc-5H well in northwest Palawan has successfully yielded oil, confirming the potential of the well.

“The Galoc-5H well has successfully flowed oil to surface from the Galoc Clastic Unit (GCU) with the well flowing at a rate of 6,300 barrels per day (bopd),” Otto Energy said yesterday.

The company said it successfully conducted the operations using the drilling rig Ocean Patriot.

With the initial results, Otto Energy said “initial oil deliverability potential from Galoc-5H under normal field operating conditions is expected to be between 8,000 and 12,000 bopd with final operating rates to be set according to optimum facility and reservoir management constraints.”

Furthermore, the company said results from the flow test are in line with the forecast overall field production rate of 12,000 bopd to be delivered once Phase II is brought in to production in late November.

The forward plan now is to move to Galoc-6H, install the subsea tree and commence clean-up and flow testing, it added.

The Galoc joint venture partners approved last year the Galoc Phase II development and commenced drilling last June. The consortium expects first oil in the fourth quarter of 2014.

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

The Phase II development, which has the support of the joint venture, will require the drilling of two subsea wells, tied back to the existing floating production, storage and offloading facility.

Otto Energy holds a 33-percent direct ownership in the Galoc project through Galoc Production Co. Other partners are Nido Production Ltd., Oriental Petroleum & Minerals Corp., Linapacan Oil Gas & Power Corp., Philodrill Corp. and Forum Energy Philippines.