OTTO Energy Ltd. of Australia has secured from the Department of Energy (DOE) an extension of its permit to drill the Hawkeye-1 exploration well in southwest Palawan.
“Otto Energy is pleased to announce that the Philippines Department of Energy has granted an extension of Sub Phase 4 of Service Contract (SC) 55 for a period of 12 months,” it said on Wednesday.
The extended contract is set to expire on December 23, 2015.
“Securing the Department of Energy extension of Sub Phase 4 is an important step in progressing our exploration program in this high impact area. The combination of the excellent prospectivity of SC55 and the funding arrangement secured enables Otto to offer a very attractive exploration opportunity as part of a farm-out campaign. We look forward to providing an update on these discussions in the near term,” Otto CEO Matthew Allen said.
Otto Energy earlier said there are a number of companies with operations in Southeast Asia that are interested for a joint venture partnership in the drilling of the Hawkeye-1 exploration well.
“The company continues its farm-out process to secure quality joint venturers to participate in the drilling of the Hawkeye-1 exploration well and looks forward to being able to provide an update on these discussions in the near term,” it said, adding that planning and preparation for drilling of Hawkeye in 2015 has commenced.
Otto is taking over the BHP Billiton Petroleum (Philippines) Corp.’s (BHPB) 60-percent interest in SC55. This will bring Otto’s equity interest to 93.18 percent.
The DOE has already approved the reassignment of BHPB’s stake to Otto. Last January Otto has executed agreements with BHPB to terminate the farm-out agreement for SC55. The key terms of the agreements include the re-assignment approval by the DOE and the payment of $3 million, representing the reassignment, and $24.5 million to Otto, upon completion of the first exploration well in SC55.