OTTO Energy Philippines Inc. took in a new partner to drill Hawkeye-1 exploration well in southwest Palawan.
It said on Monday that a farm-in agreement was signed with Red Emperor Resources NL for the latter to earn a 15-percent working interest in Service Contract (SC) 55.
“Otto would like to welcome Red Emperor to the SC 55 joint venture. Along with our existing joint-venture partner, TransAsia Oil and Energy Development Corp. and Philippine National Oil Company-Exploration Corp. (PNOC-EC), the SC 55 joint venture looks forward to delivering the highly important Hawkeye-1 exploration well on behalf of the Philippine Department of Energy,” said Matthew Allen, CEO of Otto Energy Ltd., the parent firm of Otto Energy Philippines, in a report on Monday.
Otto Energy’s share now stands at 33.18 percent; 45 percent, Otto Energy Philippines; 6.82 percent, Palawa55 Exploration and Production Co., a wholly owned subsidiary of Trans-Asia Petroleum Corp.; and 15 percent, PNOC-EC.
This farm-in agreement, along with the $24.5-million funding committed by BHP Billiton and the expression of interest received in January 2015 from PNOC-EC for a further 15-percent working interest, ensures that Otto is fully funded and has mitigated significant financial risk associated with the drilling of Hawkeye-1, Otto Philippines said.
Otto earlier took over BHP Billiton’s interest in SC 55.
Drilling, which is scheduled in the third quarter of this year, will be conducted by Maersk Drilling. Detailed contractual arrangements with Maersk Drilling will be finalized in the coming weeks.
“Securing a drillship of the capability of the Maersk Venturer for the drilling is a major event for Otto. We are now finalizing preparations to begin drilling and we look forward to updating our shareholders in 2015 as this activity is undertaken,” Allen said.
All required long-lead items have now been procured and stored in yards in Labuan, Malaysia, Otto said.