AFTER its offer was rejected early this month, Pryce Gases Inc. (PGI), a distributor of liquefied petroleum gas (LPG), has earned a 10-percent interest in Service Contract 55 (SC 55).
This, after a farm-in option agreement was signed between Otto Energy Philippines Inc., a subsidiary of Otto Energy Ltd. of Australia, and PGI.
“PGI has agreed to a farm-in option to SC 55 to earn a 10-percent working interest by participating in the drilling of the Hawkeye-1 exploration well,” Otto said.
The farm-in option, along with the $24.5-million funding committed by BHP Billiton and the Red Emperor Resources NL farm-in announced in March 2015 for a 15-percent working interest, ensures that Otto is fully funded for the drilling of Hawkeye-1, which is estimated to cost between $30 million and $35 million.
“Otto welcomes Pryce Gases to the SC 55 joint venture. Along with our existing joint-venture partners, Trans Asia Oil and Energy Development Corp. and Red Emperor Resources, the SC 55 joint venture looks forward to delivering the highly important Hawkeye-1 exploration well,” Otto Managing Director Matthew Allen said.
The start of the drilling will commence this weekend. Otto said it will report once the well has been spud. It is expected that the well will take approximately two weeks to three weeks to be drilled to the reservoir interval.
Early this month, Otto said it rejected an offer of PGI, saying that “negotiations are incomplete and the current offer by Pryce is not capable of acceptance.”
Otto now holds 68.18 percent in the SC 55 consortium. PNOC-Exploration Corp., on the other hand, holds 15 percent. Trans Asia’s Palawan55 Exploration & Production Corp. holds 6.82 percent and PGI, 10 percent.
SC 55 covers southwest Palawan. Otto Energy, operator of SC55, has tapped Maersk Drilling to drill the Hawkeye-1 exploratory well in SC 55.