Australia-based Otto Energy may leave the Philippines to focus on its North American assets, leaving joint venture partner Red Emperor Resources with an option to takeover more stake in SC 55.
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Map of SC 55, courtesy of Otto. |
According to Red Emperor’s Q4 report, Otto advised of its intention to exit the joint venture, which would leave Red Emperor with the option of either maintaining its 15% participating interest in SC 55, or be assigned a percentage of Otto Energy’s interest on a pro-rata basis. Should Red Emperor be assigned Otto’s piece, participating interest could be increased by up to 22.5% to 37.5%.
Red Emperor said it is considering its options and will advise the market accordingly.
SC 55 is a deepwater block located in the southwest Palawan Basin and covers an area of 9880sq km. The license was awarded to Otto in 2005. SC 55 is in the middle of a proven regional oil and gas fairway that extends from the productive offshore Borneo region in the southwest to the offshore Philippine production assets northwest of Palawan.
In late-December, Otto requested that a two-year moratorium be granted by the Philippines Department of Energy over SC 55, while the JV undertakes further technical studies and a quantitative interpretation (QI) study to gain a better understanding of existing and potential petroleum reservoirs during the moratorium period. A response from the government is anticipated this quarter.
In August, the Hawkeye-1 exploration well disappointed and was plugged and abandoned after logging hydrocarbons between 2710-2737m in a reservoir of variable quality. The upper reservoir section between 2710m–2724m was interpreted to be gas bearing at sub-commercial volumes. The second, poorer quality reservoir, between 2724–2737m provided evidence of fluorescence, usually an indicator of liquid hydrocarbons.
Although the well did not encounter gas in commercial quantities, it proved the presence of an active petroleum system in the contract area, which hosts the Cinco Prospect, as well as several other leads, Red Emperor said.
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