Otto Energy Ltd

Reserves at 30 June 2026: 1P 1.4 MMboe (down 21%), 2P 2.0 (down 15%), 3P 5.1 (down 11%). Declines are broadly in line with FY26 production of 355 Mboe, with only minor downward revisions. Updates the 30 June 2025 figures.

resource reserve update

Otto launched a formal process to evaluate selling its Gulf of America assets, the SM 71 oil field and GC 21 well, using PetroDivest as adviser. Aim is returning proceeds to shareholders. No timetable set and no assurance of a sale.

asset acquisition disposition

Justin Clyne confirmed as permanent Chairman, ending his interim status that began 1 October 2025. He has been a director since October 2024. This closes the open question of a permanent chair.

director officer appointment

Justin Clyne became Interim Chairman from 1 October 2025, replacing Geoff Page, who stays as a director and chairs the Audit and Risk Committee. The chair remains interim, not permanent.

director officer appointment

Chris Dorros appointed permanent CEO from 25 August 2025, filling the gap left by Trajanovich. Pay is US$350,000 a year plus incentives and a bonus of 2% of gross returns to shareholders.

director officer appointment

30 June 2025 reserves: 1P 1.8 MMboe (-10%), 2P 2.5 MMboe (-24%), 3P 5.8 MMboe (-3%). Contingent and prospective resources fell to 2.0 MMboe from 8.7 following the ST 48 relinquishment. Lightning and GC 21 proved reserves rose.

resource reserve update

June quarter: the A$38.4m (A$0.008/share) capital return was paid 16 June, leaving cash at US$14.9m with no debt. US$2.4m F5 insurance settled. Production fell to 1,320 boe/d as the F5 well was shut in, since it produced only gas.

quarterly activities report

Acting CEO Phil Trajanovich resigned effective 12 July 2025, about a year after taking the role. The board has begun a search for a new CEO.

director officer appointment

Otto received a draft ATO class ruling: part of the A$0.008 payment will be a dividend and the rest a return of capital. The draft is not binding; the 16 June payment timetable is unchanged.

security holder rights change

The F5-ST Bypass well began production on 30 November 2024, but is mostly gas: about 3 MMscf/d with only 10 bbl/d of oil, against a 500-1,500 bbl/d oil target. Otto says the oil potential is uncertain and it is too early to forecast.

production update

The F5-ST Bypass well reached 7,219 ft, finding 133-177 ft of net pay in the D5 sand, plus 24 ft (I3) and 14 ft (I2). Otto will complete it at about US$3m more; production is expected in November.

drilling result

The F5-ST well at SM 71 found hydrocarbon pay: 133 ft in the main D5 sand, plus 22 ft (I3) and 13 ft (I2). Drill pipe then stuck and the hole was cemented off (about US$2m net loss); Otto will join a US$1.7m net bypass well.

drilling result

At Otto's request, trading was suspended from 21 October 2024 pending an announcement on F5-ST drilling results. A trading halt had been granted on 17 October. The result itself is not yet known; suspension is expected to last until 22 October at most.

other

Otto will join the F5-ST sidetrack well at SM 71 (50% WI), targeting 500-1,500 bbl/d oil with a stated 60% chance of success. Otto's share is US$2.85m dry-hole and US$5.65m completed cost, funded from cash. Spud expected late September or early October 2024.

drilling scheduled

At 30 June 2024, net 1P reserves fell 18% to 2.0 MMboe, 2P fell 32% to 3.3 MMboe and 3P fell 15% to 6.0 MMboe, mainly from production and GC 21 and SM 71 downgrades. Resources unchanged at 8.7 MMboe.

resource reserve update

The company says it has concluded its strategic review because offers did not match its assessment of value, and will focus on existing assets and returns to shareholders. Cash was US$40.5m, with revenue US$6.1m and 1,690 boe/d. The SM 71 F3 well was shut in indefinitely in May.

quarterly activities report

CEO Steve Herod resigned to pursue other interests. Chief Commercial Officer Phil Trajanovich became Acting CEO on US$315,000 a year, and the board said filling the role internally would accelerate Otto's cost-cutting initiative.

director officer appointment

Chairman John Jetter, a director since 2007, will retire on 30 June 2024. Non-executive director Geoff Page becomes Interim Chairman from 1 July. A change of chair during the unfinished strategic review.

director officer appointment

The board will return up to A$40.0m (A$0.008 per share) to shareholders in early 2024, from existing cash, subject to approval at the 30 November AGM. Described as the first step of the strategic review; a sale is still being assessed.

capital raising announcement

FY23 net loss after tax was US$7.0m (FY22: US$15.5m profit), after a US$19.8m non-cash GC 21 impairment. Revenue was US$33.4m, down from US$40.6m. Cash US$25.9m, debt-free, hedges closed. Strategic review continues with negotiations ongoing.

annual report

At 30 June 2023, net 1P reserves fell 35% to 2.4 MMboe, 2P fell 18% to 4.8 MMboe and 3P fell 10% to 7.0 MMboe, mainly from production and GC 21 downgrades. Resources rose 257% to 8.7 MMboe, driven by ST 48.

resource reserve update

Otto received US$5.8m as an interim payment on its insurance claim for damage during the September 2022 GC 21 recompletion. The maximum claim is US$8.7m net to Otto; further payments are not assured. This partly offsets the GC 21 cost overruns.

other

With the strategic review well progressed, Mike Utsler's contract was terminated by mutual agreement. Steve Herod, a Petrohawk co-founder, becomes CEO, John Jetter becomes Non-Executive Chairman and Paul Senycia deputy. Herod has a bonus of up to US$300,000 for a liquidity event by 1 March 2024.

director officer appointment

The GC 21 intervention opened the lower DTR-10 sand, and the well now flows about 1,400 bbl/d oil and 1,000 Mscf/d gas, up from 800 bbl/d oil from the upper zone alone. Cost was US$2.1m net to Otto, below the earlier US$2.8m estimate.

well test result

GC 21 began flowing 22 March at about 800 bbl/d oil and 400 Mscf/d gas, but only the upper DTR-10 sand is contributing. A further intervention is planned at US$2.8m net to Otto, and FY23 production guidance is cut to 0.75-0.85 MMboe.

production update

Otto launched a formal strategic options review, including a possible partial or full sale of the company or assets, with Seaport Global and Adelaide Equity Partners advising. The board says the share price does not reflect value; no timetable or assurance of a deal.

other

GC21 recompletion suspended after loop currents and Hurricane Ian; first production slips to Q1 2023 and Otto's cost rises to US$12-16m from US$5.9m. Offsetting: Oyster Bayou South oil lifted to 1,100 bbl/d, Vick #1 started 26 September, and ST 48 awarded to Otto.

production update

Otto made its final repayment and is debt-free, with hedges rolled off. Macquarie facility extended from November 2022 to 31 December 2023, with US$10m Tranche A-2 undrawn and US$20m Tranche B available. Cash US$24.9m at 30 September.

debt financing

FY22 (to June 2022): working interest revenue up 29% to US$51.1m, net profit after tax US$15.5m (loss in FY21). Production fell 24% to 2,315 boe/d. Cash US$26.8m, debt US$2.3m after US$9.2m repaid; Eaves, Mosquito Bay West and Oyster Bayou South called commercial discoveries.

annual report

Oyster Bayou South began flowing at 807 bbl/d oil and 4.6 MMscf/d gas (8/8ths) versus an expected 150 bbl/d. With Mosquito Bay West, about 700 boe/d net to Otto, a 33% lift on the June quarter's 2,117 boe/d. SM 71 F2 recompletion succeeded; Eaves still awaiting meter.

production update

At 30 June 2022, net reserves were 1P 3.7 MMboe, 2P 5.8 and 3P 7.8, each about 10% lower than a year earlier as production outpaced additions. Post year-end, Oyster Bayou South added 0.4 MMboe. Otto says it replaced about 90% of FY22 production on a proved basis.

resource reserve update

Mosquito Bay West began flowing at about 700 boe/d (8/8ths) from one sand, with a condensate ratio well above Otto's estimate. SM71 F2 and GC21 recompletions have started. Oyster Bayou South and Vick #1 production are still to come. The ST 48 lease sale was reinstated by US legislation.

production update

Oyster Bayou South (30% WI) found 68 ft of net gas pay, in line with Otto's pre-drill mid case. Production is expected in Q4 2022. Otto calls it the third straight exploration success, and says the two Castex wells cost US$6-7/boe to find and develop.

drilling result

Mosquito Bay West (30% WI) found 111 ft of net gas pay in five sands, well above Otto's pre-drill mid case. First production is expected in Q3 2022. This is the second exploration success after Eaves, and Otto holds about US$30m cash.

drilling result

Otto will take 30% WI in two Louisiana state-waters exploration wells, Mosquito Bay West and Oyster Bayou South, for US$1.7m each dry-hole cost, spudding May 2022 from cash. The ST 48 lease win was invalidated by a US judge in January; an appeal has been lodged.

drilling scheduled

Vick #1 (Eaves, 10.3125% WI) found gas/condensate pay: 12 ft net in the Yegua and 16 ft net across three Wilcox sands. It will be completed as a producer, with production expected early Q1 2022 and completion cost to Otto about US$0.1m. Offsets the Schindler dry hole. Figures were later corrected (see 7 January).

drilling result

Schindler #2 reached 13,658 ft and hit the Wilcox target with 11 gas shows, but the sands were too tight to produce. The well will be plugged and abandoned at a cost to Otto of US$0.9-1.0m. This is a dry hole for the first of the two new Texas wells.

drilling result

Otto is the apparent high bidder, at the US$125,000 minimum, for the South Timbalier 48 lease in the Gulf of Mexico. It would hold 100% WI and 87.5% NRI. The bid is still subject to BOEM review, which can take up to 90 days.

regulatory community update

Otto sold 11 million of its 14.27m Pantheon shares to an institutional investor for about US$10.5m (A$14.0m). It keeps about 3.27m shares (US$3.4m) and the 0.5% ORRI. Proceeds fund growth Pillars 2 and 3 and working capital. This turns the Alaska sale into cash.

asset acquisition disposition

Otto farmed into two onshore Texas gas/condensate wells, Schindler (25% WI, US$0.9m) and Eaves (10.3125% WI, US$0.2m), both due to drill in Q4 2021. First inorganic growth (Pillar 3) step, funded from existing cash. Schindler is assessed at 54% chance of success.

farm in farm out agreement

At 30 June 2021 net reserves were 1P 4.1 MMboe, 2P 6.5 and 3P 8.4, down from 4.8, 8.1 and 11.7 a year earlier. Prospective resources fell 96% to 2.1 MMboe, on removal of Beluga, Tarpon, Mallard and Alaska. GC21 MP sand reserves were written down.

resource reserve update

Macquarie and Otto amend the facility: all GC21 timing and production requirements are removed. The 1,900 boepd minimum quarterly average now runs to 31 December 2021, then falls to 1,400 boepd until maturity on 4 November 2022. No fees. This resolves the 31 July GC21 deadline.

debt financing

Technical work shows GC21's MP sand reservoir is smaller than expected. Otto now favours recompleting in the shallower DTR-10 sand in mid-2022, with production mid to late 2022. Long-lead items cost US$0.6m net to Otto, due mid-2021. This confirms the earlier underperformance.

production update

Alaska regulators formally approve the sale of Otto's Alaska subsidiary to Pantheon, and Otto will receive 14,272,592 Pantheon shares, locked up to 30 June 2021, worth about US$7.4m. This completes the January deal. Pantheon is about to test Talitha #A's Kuparuk zone.

asset acquisition disposition

Half-year to December: production up 35% to 3,068 boe/d but revenue down 17% to US$14.4m on lower oil prices. Net loss was US$14.3m including a US$12.9m GC21 impairment. GC21 cost about US$39.2m versus US$23.5m estimated. Cash US$9.7m, debt US$16.1m.

half year report

Macquarie amends the credit facility after GC21's weak performance. The US$10m Tranche A2 is extended to 31 March 2022, GC21 fix plans are due by 31 July 2021, and a minimum 1,900 boepd quarterly production test applies until then.

debt financing

Otto agrees to sell its Alaska subsidiary (10.8% of Talitha) to Pantheon for 14,272,592 Pantheon shares, about US$8.02m, locked up to 30 June 2021. Otto keeps a 0.5% overriding royalty. It needs no further Alaska spend, subject to Alaska DNR approval.

asset acquisition disposition

GC21 'Bulleit' is producing 500 bopd and 3.5 MMscfd, down from 1,000 bopd and 6 MMscfd at first flowback, and below what analogues suggest. Partners are considering stimulation or recompletion. This contradicts the earlier hopeful ramp-up; 70% of its proven reserves sit in the DTR-10 sand.

production update

Beluga Unit #1 in Texas reached 13,800 ft MD but found only sub-commercial hydrocarbons and will be plugged and abandoned. Otto held 18.75%, with cost expected near US$2.25m; the well came in below budget. It ends the Hilcorp exploration program.

drilling result

At the AGM, chairman John Jetter hands the chair to Michael Utsler, who becomes Executive Chairman from 19 November; Jetter stays as a non-executive director, subject to shareholder approval. Utsler has completed his strategic review and will now execute a strategy. Geoff Page's board appointment is put to the meeting.

director officer appointment

GC21 'Bulleit' produced first oil on 15 October 2020 and first sales that afternoon, with output being raised in 1,000 bopd steps over 1-2 weeks. Otto holds 16.67%. This resolves the delayed start-up and gives Otto its third producing field.

production update

Otto plans to seek approval at the 19 November AGM for a 1-for-50 share consolidation, cutting shares from about 4.8 billion to about 96 million, to reduce share price volatility. A buyback of unmarketable parcels (under A$500) would follow, at the 2 December closing price.

security holder rights change

Otto and Hilcorp agree to drop the Tarpon, Oil Lake and Mallard prospects from the Gulf Coast program, so Beluga will be the last well. Otto's Beluga interest halves to 18.75%, costing about US$2.25m. Drilling starts around 5 October with a 45% chance of success.

farm in farm out agreement

Operator Byron publicly disputes Otto's reserves downgrade at SM71 after the F5 well, saying Otto skipped the joint third-party report it has used for five years. Byron calls the F5 gas sand a stray sand. This opens a technical disagreement between the two SM71 partners.

joint venture update

At 30 June 2020, net 1P reserves rose 31% to 4.8 MMboe and 2P 13% to 8.1 MMboe; 3P rose 15% to 11.7 MMboe. Growth came from the GC21 discovery and Lightning's Green #3, while some SM71 reserves were downgraded after the F5 well. Prospective resources fell 29% to 58.3 MMboe.

resource reserve update

Michael Utsler, a former Woodside COO with 15 years in the Gulf of Mexico, became CEO and Managing Director on 11 September on US$300,000 a year. This fills the vacancy left by Matthew Allen's June exit. He will run a strategic review including the asset base. Jetter returns to non-executive chair.

director officer appointment

Otto reports CEO search progressing and cost cuts that should lower operating and corporate costs from about US$7.0m in FY20 to about US$4.5m in FY21. Production is about 70% hedged at US$50/bbl for 2020; Macquarie debt is US$20.7m; GC21 remains on track for late Q3.

investor presentation

CEO and Managing Director Matthew Allen steps down immediately after eleven years at Otto, staying as adviser for six months. Chairman John Jetter becomes Executive Chairman and Kevin Small oversees daily operations while a Houston-based successor is sought.

director officer appointment

The retail offer raises A$6.0m from 1,000m shares at A$0.006: only A$1.78m from applications, with about A$4.2m taken up by underwriter Euroz and sub-underwriters. Total raised is about A$13.8m, below the A$17.5m targeted, with allotment on 28 April.

capital raising announcement

Otto clarifies Macquarie facility terms: US$22m drawn, a review event occurs if cash is below US$17.5m at 20 April, and failure to remedy lets Macquarie demand repayment. Cash was US$14.29m, expected to reach about US$18m after the raise. No default has occurred.

debt financing

Chairman Ian Boserio resigns and John Jetter becomes chairman, who will lead a board renewal after the raise. MD Matthew Allen offers a 50% pay cut for six months, subject to US Labor Department consent. Jetter acknowledges 'justifiable shareholder criticism'.

director officer appointment

Otto completes the A$1.4m placement and A$6.4m institutional entitlement offer at A$0.006 a share; Molton took 536.9m shares plus 528.7m shortfall shares as sub-underwriter. The partly underwritten retail offer of up to A$9.7m opens 3 April and closes 16 April.

capital raising announcement

Because Louisiana Light Sweet crude fell to a discount to WTI of about US$7.60/bbl, operator Byron shuts in SM71 F1 and cuts F3 to 1,850 bopd. Field output falls from about 3,000 to about 1,900 bopd gross (Otto 50%), to be adjusted with prices.

production update

Chairman Boserio says it will not be business as usual: for at least six months Otto will focus on protecting existing assets, including GC21, due on in the second half of 2020. Directors' fees are cut 50% for six months and Houston staffing is under review; the board and MD will take up their rights.

other

Otto launches a raise of about A$17.5m at A$0.006 per share, a 25% discount: a A$1.4m Molton placement plus a 1-for-1 entitlement offer of about A$16.1m, partly underwritten by Euroz. Funds cover the SM71 F5 share and contingent development wells.

capital raising announcement

Otto reports SM71 F5 hit 36 ft of net gas pay in the D5 plus 12 ft and 20 ft of oil pay in the I3 and J sands, but the D5 may be faulted out. The well is temporarily abandoned for a future sidetrack, citing COVID-19 risk. Not the hoped-for oil result; Otto holds 50%.

drilling result

Shareholder Perennial Investment Management requested a general meeting to remove Matthew Allen (MD/CEO) and John Jetter as directors and appoint Alexander Beard and Douglas Jendry. Otto is checking the notice's validity. A shareholder challenge to the board and CEO.

other

Green #2 started producing at a stabilised 12.4 MMscf/d and over 350 bbl/d condensate from Tex Miss 1, while Green #1 continues at 14.3 MMscf/d. The deeper Tex Miss 2/3 zone showed low permeability and could not hold steady flow; a future stimulation test is planned.

flow test result

Otto confirms the SM71 joint venture will drill F5 from around 1 March 2020, with Otto at 50% WI. About 25 days to drill, 39 days to complete; first production in Q2 2020 if successful. Fulfils Otto's stated preference for F5.

drilling scheduled

Byron says Otto has elected to join the SM71 F5 well, 50/50, after the F4 success. Drilling is expected around 1 March 2020 on the Enterprise 264 rig; F4 production is expected in 4-6 weeks. Reverses Otto's earlier stance of waiting for F5.

joint venture update

Byron's SM71 F4 found 91 ft of net hydrocarbon pay in the D5 Upper Sand, at the upper end of expectations, and was drilled 25% under budget. Otto, which declined to participate, gets no share of this well's result.

drilling result

Green #2ST at Lightning reached 15,121 ft with 146 ft of net pay over seven sands, and is being completed as a producer; Green #1 production has resumed. Gross cost is about US$9.5m versus an US$8.0m budget; Otto holds 37.5%. Resolves the sidetrack.

drilling result

The Mustang exploration well (Thunder Gulch #1, Texas, Hilcorp-operated) is non-commercial after testing produced only small gas volumes and no liquids, and will be plugged. Otto, 37.5%, had pre-test internal estimates of up to 15 BCF and 900 Mbbls. Third dry or failed well in the Hilcorp program.

drilling result

Maiden Green Canyon 21 (Bulleit) reserves booked: 2P 1.828 MMboe and 3P 2.095 MMboe net to Otto (13.336%). Project is sanctioned and funded via the Macquarie facility, with first production expected late Q3 2020.

resource reserve update

Otto signs a three-year US$55m senior secured Macquarie facility (US$35m committed, US$20m subject to further approval) at LIBOR plus 8%, to fund Green Canyon 21 and Lightning. Macquarie gets 42.5m options at A$0.08, with 42.5m more on drawing Tranche A2. Resolves the long-pending financing.

debt financing

Green #2 development well at Lightning started drilling, reaching 2,800 ft, expected to take 60 days to 15,234 ft MD. Cost US$7.94m gross (US$2.98m net to Otto), to be funded by the pending finance facility; completion early 2020.

drilling spud

Byron says Otto elected not to join the SM 71 F4 well, so it will be drilled as a 100% Byron well, expected January 2020 after a compressor upgrade. Byron can recover 600% of certain costs before Otto may regain its interest. Resolves Otto's participation decision.

joint venture update

ASX paused trading in Otto's shares pending a further announcement. No reason is given in the notice.

other

Reserves at 30 June 2019: net 1P up 49% to 3.670 MMboe, 2P 7.103 MMboe, 3P 10.152 MMboe, including maiden Lightning 2P of 2.230 MMboe. Green #2 well due Q4 2019; Bulleit and Mustang bookings pending. Resolves the Lightning reserves wait.

resource reserve update

Chairman John Jetter will step down as chair at the November 2019 AGM but stay as a director until the 2020 AGM; Ian Boserio, ex-Shell, becomes chair-elect and deputy chair. Ian Macliver will retire once a replacement is found, or by 30 June 2020.

director officer appointment

CFO and company secretary David Rich resigned and stays until 1 November 2019. Otto will hire a Houston-based CFO and move most finance and accounting functions from Perth to Houston. Rich was named as having helped secure financing arrangements.

director officer appointment

Bulleit reached 15,675 ft MD and found about 110 ft TVD of oil pay in the deeper MP sand, on top of the DTR-10 find. But sidetrack and storm delays raise Otto's cost by an estimated US$6.5-7.5m over the US$9.0m pre-drill budget. Otto is in late-stage talks on development financing.

drilling result

Mustang (Thunder Gulch #1) reached 18,164 ft MD and found at least 57 ft of net hydrocarbon pay, earning Otto 37.5% of the prospect. Completion and testing come next, with first production expected about 90 days after testing. Second Hilcorp program discovery after Lightning.

drilling result

Lightning's Green #1 well finished commissioning and is at steady state, about 10 MMscf/d gas and over 280 bbl/d condensate (Otto 37.5% WI: 3.7 MMscf/d, 105 bbl/d). Completes the 60-day commissioning; second well planned January 2020 or earlier; maiden reserves due July.

production update

Bulleit's shallower DTR-10 sand shows 119 ft TVD of oil pay, confirmed as a commercial discovery with tie-back to GC18A and first oil expected in 2020. Reaching the deeper MP sand now needs a sidetrack after poor hole conditions, so the main target remains untested.

drilling result

Bulleit logging found 235 ft gross pay in the shallower DTR-10 sand, well developed and oil bearing, with 50-60% net-to-gross. The deeper MP sand main target is still to be drilled, so the full result is pending.

drilling result

Lightning began producing gas and condensate after the pipeline hot tap, making it Otto's second producing field after SM 71 (37.5% WI). A 60-day commissioning period precedes maiden reserves. Resolves the Q2 delay; step toward the 5,000 boepd goal.

production update

Otto took Byron's 50% of the VR 232 lease at no cost, lifting it to 100% and becoming operator. The block is next to SM 71 and has produced 2 Bcf gas and 30 Mbbl oil historically. Otto is evaluating prospectivity; no drilling plan announced.

asset acquisition disposition

Mustang exploration well (Thunder Gulch #1, Chambers County, Texas) started drilling, the next Hilcorp program well after Lightning and Don Julio 2. Otto pays 50% of cost (US$6.77m) for 37.5%; 56% chance of success; 74 days to reach about 18,000 ft TVD.

drilling spud

Final documents signed with Talos and EnVen for the Green Canyon 21 earn-in, confirming the 29 March deal: 16.67% interest for 22.22% of the Bulleit well cost. The drillship is on location with drilling due within days; Bulleit's P50 prospective resource is 14.5 MMboe gross.

farm in farm out completion

Retail entitlement offer drew A$6.9m of applications (46% take-up of entitlements plus A$1.2m extra). The A$5.4m shortfall goes to underwriter Morgans' sub-underwriters, so the full A$12.3m (231.8m shares at A$0.053) is raised, completing the ~A$31m raising.

capital raising announcement

The A$11m placement (207.5m shares) and A$7.6m institutional offer (143.2m shares) closed oversubscribed at A$0.053. A fully underwritten retail offer of about A$12.3m opens 5 April. Otto says it is fully funded for its 2019 program.

capital raising announcement

Otto farms into Talos-operated Green Canyon 21 (Bulleit), earning 16.67% by paying 22.22% of the appraisal well (US$9.0m share), drilling from Q2 2019. It also raises about A$31m (A$11m placement plus ~A$20m 1-for-5 entitlement offer) and will redeem US$8.1m of convertible notes.

capital raising announcement

Winx-1 wireline logs and fluid sampling showed low oil saturations and no mobile oil in the Nanushuk and Torok, so no production test will be run. The well will be plugged and abandoned. Reverses the earlier encouraging shows; Otto will reprocess seismic for remaining Western Blocks prospects.

drilling result

Lightning flow test over 15 hours produced 1.1 MMscf gas and 50 bbl condensate, a yield of 40-45 bbl/MMscf versus 10 in nearby wells. First production slips into Q2 2019 awaiting a pipeline hot tap. Don Julio 2 was dry (ash bed gave a false seismic anomaly); Mustang is next.

well test result

Winx-1 intersected the primary Nanushuk targets at 4,667-4,901 ft with elevated gas, oil shows and higher resistivity, comparable to a nearby successful well. Otto calls it encouraging but cautions more data is needed. Wireline logging at total depth will decide on testing.

drilling result

Winx-1 in Alaska began drilling on schedule at 15:15 on 15 February 2019 and was at 880 ft by 17 February. Surface casing is planned at about 2,500 ft. Target is 400 MMbbl gross (75 MMbbl net to Otto).

drilling spud

Don Julio 2 (Middleton Trust #1), first of four Chambers County Vicksburg wells with Hilcorp, began drilling, targeting ~11,600 ft TVD in about 37 days. Otto earns 35.625% by paying 47.5%, about US$3.53m. Chance of success is 44%; mean 1.46 MMboe net.

drilling spud

Lightning (Green #1) reached 15,216 ft TVD and is a commercial discovery with at least 180 ft net pay, well above the pre-drill 31 ft P50. Otto earned 37.5%. Production is expected by end-March 2019. Resolves the open Lightning thread.

drilling result

Otto agreed with noteholders an option to extend Molton's US$8m convertible notes from 30 June 2019 to 30 June 2020, plus a waiver of cash-use restrictions until 30 June 2019. It needs an ASX waiver or shareholder approval by 31 March 2019; fees up to US$400,000.

debt financing

Lightning (Green #1, Matagorda County, Texas), the second Hilcorp program well, has started drilling. It targets 15,500 ft, takes about 60 days, with 45% chance of success and 4.57 MMboe gross mean prospective resource. Otto's cost is about US$4.97m for a 37.5% interest.

drilling spud

Big Tex, the first Hilcorp program well, reached 13,722 ft MD. Despite hydrocarbon indications on mud logs, there was insufficient producible reservoir, so it is being plugged and abandoned as sub-commercial. Second dry hole in a week; next Hilcorp well, Lightning, is due to spud in November.

drilling result

Weiss-Adler No. 1 at Bivouac Peak East reached 17,766 ft and was deemed uncommercial: a water-bearing sand and tight gas sands with under 5 net feet of hydrocarbons. It is being plugged and abandoned. Cost is under US$7.5m versus US$10.8m budget. Otto holds 40% and is in a trading halt.

drilling result

Drilling began on Big Tex, the first of eight Hilcorp program wells, to 12,700 ft TVD in about 55 days. Otto earns 37.5% by paying 50% of drilling costs, about US$4.23m. Company-assessed chance of success is 54%; mean gross prospective resource 6.5 MMboe.

drilling spud

Operator 88 Energy signed a rig contract for the Winx prospect (400 MMbbl gross, 75 MMbbl net to Otto, 25-30% chance of success) on the Alaska Western Blocks. Permitting is progressing and drilling is planned for early 2019, advancing the Alaska plan.

contract award

Otto announced the Bivouac Peak East well (Weiss-Adler No. 1) began drilling 25 August, 40% interest, 18,000 ft TVD, about 75 days. Otto pays up to US$5.33m of the US$10.8m cost. Resolves the open spud thread; result awaited.

drilling spud

The retail offer closed oversubscribed: A$5.5m (78%) of entitlements taken up, A$7m raised via 118.5m shares at A$0.059, with A$4.5m of excess applications refunded. Total raising is A$20m, so the underwriters receive no shares. Completes the 31 July raising to fund Hilcorp, Bivouac Peak and Alaska.

capital raising announcement

Independent report lifts SM 71 gross 2P reserves by 10.6 MMboe to 16.2 MMboe; Otto's net 2P is 6.6 MMboe and 1P 2.5 MMboe, almost triple 2017. Driven by D5 sand performance. Delivers the reserves uplift Otto had flagged; Big Tex and Bivouac Peak wells due this month.

resource reserve update

Otto completed a A$10m placement (about 169.5m shares) and A$3m institutional entitlement offer (about 51.6m shares, 34% take-up), both at A$0.059. A fully underwritten ~A$7m retail offer follows. Funds the Hilcorp program announced 31 July.

capital raising announcement

Otto farms into an eight-well Gulf Coast program with operator Hilcorp, earning 37.5% by paying 50% of costs, about US$37.5m, with US$4m payable immediately. It will fund this with a roughly A$20m placement and entitlement offer. A major expansion of Otto's drilling exposure.

farm in farm out agreement

Otto signed definitive agreements lifting its Alaska Western Blocks interest from 10.8% to 22.5%, in return for drilling a well before 30 May 2019. Prospect is 400 MMbbl gross, with 25-30% chance of success; drilling planned Q1 2019. Completes the 25 June term sheet.

farm in farm out completion

Otto elected to join the Bivouac Peak East gas/condensate well at a 40% interest (down from 45%), paying up to US$5.33m of the US$10.8m cost. Funded from SM 71 cash flow, which Otto says exceeds US$3m a month. Resolves the 9 July election.

drilling scheduled

Byron reports the SM 71 F2 well's B65 sand trap is only about 3 acres versus 175 targeted, and F2 stopped flowing and is shut in. F1 and F3 produce about 4,245 bopd. F2 recompletion in B55 sand is planned for early September.

production update

Otto reports the same SM 71 data: F2's B65 sand trap is about 3 acres versus 175 targeted, and F2 is shut in. F1 and F3 produce about 4,245 bopd. The MD calls it disappointing but sees no need for more capital spending now.

production update

Byron says all Bivouac Peak drilling permits were granted on 21 June. Drilling could start mid-August, with about 75 days to reach 18,000 ft. Otto's election is due by 9 July. This resolves the permit thread; Otto's participation is still pending.

regulatory community update

Otto signed a binding term sheet with 88 Energy and Red Emperor to take over most of Great Bear's Alaska Western Blocks and drill a 400 MMbbl gross prospect by May 2019. Otto's interest rises from 10.8% to 22.5%; its share of the US$3m bond is US$750,000. Definitive agreements are due within 30 days.

farm in farm out agreement

BOEM awarded the VR 232 lease to Byron, giving Otto the right to a 50% working interest (43.75% NRI) next to SM 71. Otto's share is about US$734,000. Byron's mapped prospect is 11 Bcf and 170,000 barrels gross; no drilling planned until platform capacity allows.

asset acquisition disposition

Otto reports April revenue of about US$2.9m (US$2.4m after royalties). D5 wells F1 and F3 hold steady at 4,200 bopd, but F2 has lost over 50% of its pressure and flows only 300-500 bopd. This suggests a smaller B65 reservoir than mapped, confirming the earlier F2 concern.

production update

Otto says SM 71 is producing about 4,650 bopd, with 41,500 barrels its share so far. At US$68 oil, Otto's net revenue is about US$125,000 a day, or about US$3.7m a month operating cash flow. Management says this funds Gulf of Mexico growth.

production update

Paul Senycia, previously VP Exploration, joins the board as an executive director. Otto will move its operational office to Houston, with MD Matthew Allen relocating mid-2018 and a US-based non-executive director planned. Headquarters stays in Australia.

director officer appointment

Red Emperor, an SC55 partner, says the Philippine regulator approved transfer of Otto's SC55 interest to its partners. This resolves the pending assignment and completes Otto's Philippines exit; Red Emperor's stake rises to 37.5%. Text does not state any payment to Otto.

farm in farm out completion

Otto confirms F3 is producing at 1,559 bopd, with platform output of 4,288 bopd across three wells. The MD says commissioning of its 50% owned SM 71 is complete and development planning for more sands follows. Resolves the F3 completion delay; the pipeline shut-in is postponed.

production update

F1 is steady at 2,055 bopd, but F2 was choked back to 468 bopd after pressure fell, which Byron links to the well's position near the sand's edge. Combined sales averaged 2,517 bopd over two days. This is below the earlier near 4,000 bopd, so partly contradicts it.

production update

First oil from SM 71 started 23 March, with F1 and F2 at about 4,000 bopd combined, restricted. This is Otto's first production since the Galoc sale, and F3 follows. It resolves the long-targeted March start-up, with rates not yet stable.

production update

Partner Byron was apparent high bidder at US$1.101m for VR 232, next to SM 71. Otto may take 50% (43.75% NRI) for US$734,000, or 50% of SM 74 if the bid is rejected. This follows the earlier rejection, and the BOEM review can take 90 days.

farm in farm out agreement

SM 71 F3 reached 7,717 ft in 22 days, logging 175 ft net oil pay in the D5 sand, 45 ft thicker than F2, and extending the oil column 150 ft down dip. F2's D5 pay was revised up from 117 to 132 ft. A D5 reserve upgrade is expected; production is targeted for March 2018.

drilling result

F2 will be cased and completed to produce the B65 sand, after the stuck pipe. A third well, F3, is added for the D5 sand. First production moves back about a month, from late January to early March 2018, in exchange for a third producing well.

joint venture update

SM 71 F2 found oil in four sands, with preliminary net pay of 190 ft, including B65 (52 ft) and D5 (117 ft). B65 moves from prospective resource towards reserves, with a significant reserves uplift expected. Drill pipe stuck below the D5 at the time.

drilling result

ST 224 #1 reached 10,900 ft and the target BN sand came in close to prediction but is water bearing, so the well will be plugged and abandoned. A dry hole for the well flagged as a Q4 catalyst. SM 71 F2 is next.

drilling result

The SM 71 F2 well has spudded and was at 564 ft on 3 December. B65 is tested first, then the D5 sand, with about a month to drill and evaluate. First production is still expected in late January 2018. Otto holds 50%.

drilling spud

The share purchase plan drew A$6.2m of applications against a A$1m target, and the board will accept A$3.5m at A$0.035, scaling applicants back. Shares issue about 27 November. Together with the A$8.5m placement, this lifts the recent raising to about A$12m.

capital raising announcement

Alaska drilling is now unlikely in 2018, with operator Great Bear targeting a 2019 winter season because it has no firm funding. This contradicts the earlier early-2018 first well. Great Bear is seeking extensions on 48 of 60 leases expiring 1 May 2018. ST 224 was at 4,615 feet.

regulatory community update

Partner Houston Energy won the ST 235 lease next to ST 224. Otto has the right to acquire a 25% working interest and intends to exercise it. The lease carries a reduced 12.5% federal royalty. It adds follow-up acreage if ST 224 succeeds.

asset acquisition disposition

Otto raises A$8.5m through a placement of 243m shares at A$0.035, with Molton taking A$1.6m. An SPP of up to about A$1m at the same price will follow. Funds go to SM 71 wells, ST 224 and growth options. Directors' A$0.2m tranche needs AGM approval.

capital raising announcement

The ST 224 #1 exploration well has started drilling, at 1,240 feet on 19 October, targeting 10,800 ft TVD. Otto holds 25% with W&T Offshore operating; about 55 days to drill and evaluate. This is the Q4 well flagged earlier; no result yet.

drilling spud

An independent 30 June 2017 estimate put Otto's SM 71 2P reserves at 2,793 Mboe, up from 2,271 Mboe, and the B65 prospective resource at 2.869 MMboe. Bivouac Peak was unchanged at 20,520 Mboe. First production was expected in January 2018 at 3,000-4,000 bopd from two wells.

resource reserve update

A 60-day contract is signed for the Ensco 68 rig to drill SM 71 F2 and complete the F1 and F2 wells from late November 2017. The F2 well will also test the B65 sand. First production is still targeted for late January 2018.

contract award

Otto farms into the South Timbalier 224 lease in the Gulf of Mexico for a 25% interest, alongside operator W&T Offshore. Otto funds about US$2.7m of well costs, with drilling expected in Q4 2017. A gas condensate prospect.

farm in farm out agreement

Otto elects to take up to 50% of Vermilion VR 232 if Byron wins its appeal against the regulator's bid rejection. If not, Otto can take 50% of SM 74 on the same terms. Both lie near the SM-71 discovery. Depends on the appeal outcome.

farm in farm out agreement

Otto will raise US$8.2m through secured convertible notes, mainly from major shareholder Molton Holdings (US$8m), to fund SM-71 development. Conversion price is A$0.055, 14% interest, maturing 30 June 2019, plus a success fee. Needs shareholder approval at a July 2017 meeting.

capital raising announcement

Otto settles with Swala. Swala pays Otto US$800,000 by 31 Aug 2017 over Pangani, ending the Federal Court case. Otto exits Kilosa-Kilombero, pays creditors US$249,016, and gets a 2% gross overriding royalty. This ends the Tanzania dispute and Otto's 50% licence interest.

joint venture update

Tanzania's minister grants a one-year extension of the Kilosa-Kilombero licence's exploration period to 22 Feb 2018, resolving the extension request. Kito-1 is to be drilled in 2017. Joint venture disputes and the Swala court case continue; MV Upstream talks continue.

regulatory community update

Byron proposes changing the SMI-71 platform to a manned design, capable of 4,500 bopd, at an extra US$3.0m net to Otto. Otto's net development cost is about US$9m, funded from cash. First production now slated for Q4 2017; Otto supports in principle, pending final approval.

joint venture update

AGM presentation defers the first Alaska well from the 2017 winter to summer (July-September 2017), testing the Raptor prospect. This pushes back the earlier 1H 2017 start. Otto cites time to interpret seismic and a deferred state exploration tax credit payment.

investor presentation

Operator Byron buys a used six-slot tripod platform and production equipment for SM71 from Laredo Construction, fixed at under US$4.5m. Installation is expected from mid-2017 with production to follow; Otto bears 50% of costs. Permits are still needed.

contract award

Otto issues dispute notices to Swala's Tanzanian subsidiary over unpaid cash calls, about US$360,000 of interest, and seeks its removal as Kilosa-Kilombero operator. Otto says Kito-1 is unlikely to be drilled in 2016 until disputes are resolved, a delay to the 2H 2016 spud.

joint venture update

Independent estimate puts Bivouac Peak at 15,288 MBOE net to Otto (unrisked best estimate), up from 3.1 MMbo and 34.6 Bcf at December 2015. The rise is attributed to additional 3D seismic showing a deeper prospect. Drilling planned for 2017.

resource reserve update

Otto exercises its option to take 45% of the ~2,500-acre onshore Bivouac Peak lease in Louisiana, with the first well planned early 2017 and funded from cash. The SM-6 #2 well will not be re-entered; Otto's remaining cost is about US$0.1m and it holds no SM 6 interest.

asset acquisition disposition

Otto books its first Gulf of Mexico reserves: net 2P of 2,271 Mboe at SM-71, a finding cost of US$2.11 per boe. Converts the April discovery into reserves, and Otto targets production in 2017.

resource reserve update

Otto farms out 25% of Kilosa-Kilombero to MV Upstream for US$2.3m of historical cost reimbursement. MV Upstream also carries Otto's remaining 25% up to US$2m in Kito-1, with well cost about US$10m. Subject to approvals; spud expected 2H 2016.

farm in farm out agreement

The Philippines Department of Energy approved a two-year SC55 moratorium to 23 December 2017. Otto will not continue and will assign its 78.18% interest to remaining partners. This ends Otto's ten years in the Philippines after the Hawkeye-1 gas find proved uneconomic.

asset acquisition disposition

Byron reports SM71 #1 reached 7,477 feet and found a further 19-foot gas or condensate sand below the 132 feet of net oil pay. Otto has confirmed it will take its 50% interest in SM70/71. The well will be suspended for production.

joint venture update

Porosity logs show 132 feet of net oil pay in SM-71 #1 (I3 17ft, J 24ft, D5 91ft). The partners will deepen the well about 600 feet to test the D6 sand, expected within the original budget. Firms up the earlier gross-thickness discovery.

drilling result

Byron reports an oil and gas discovery at SM 71 #1, drilled to 2,086m, with three hydrocarbon zones totalling 150 feet gross thickness. Byron plans to complete it for production. Net pay is not yet confirmed. Having drilled to earning depth, Otto can elect a 50% interest, offsetting the SM 6 #2 failure.

drilling result

Byron spudded SM 71 #1 on 3 April 2016, the second well of the Otto farm-in, with about 20 days to drill and evaluate. Otto has paid US$903,610 in back costs and pays 66.67% of the US$4.5m well cost.

drilling spud

Byron said SM 6 #2 was temporarily abandoned before reaching the G20 sand after stuck drill pipe, so Otto earned no SM 6 interest and owed no back costs. Otto elected to join SM 71 #1, paying 66.67% of the US$4.5m estimated dry-hole cost (capped at US$3.0m) plus US$0.9m of past costs.

drilling result

Otto exercised its option to join the SM-71 #1 well, to spud within a week and take about 20 days. Otto pays about US$3.0m for 50% plus US$0.9m back costs and assigns a 70% chance of success. Follows the SM 6 #2 failure.

drilling scheduled

Otto confirms SM-6 #2 was plugged and abandoned at 2,464m after stuck pipe in an impenetrable shale, never reaching the G20 target. Otto earns no SM 6 interest, owes no back costs, and about US$100,000 of abandonment cost remains. Spend stays within US$5.3m.

drilling result

Swala, Otto's Tanzania partner, says an independent review lifted gross Kito prospective resources from 151 to 184 million barrels, with Kito-1 still on track for Q3 2016. The Pangani licence showed nothing of commercial interest and is to be relinquished.

joint venture update

SM-6 #2 spudded on 15 February 2016, Otto's first Gulf of Mexico well, drilling at 146m. About 40 days to drill and evaluate. Otto pays about US$5.3m to earn 50% of the lease, with a 70% chance of success it assigned.

drilling spud

Otto agreed a staged farm-in with Byron Energy to earn up to 50% of two Gulf of Mexico leases and 45% of an onshore Louisiana lease, with drilling from Q1 2016. Otto cites about US$34m cash and first oil in 2017. Fulfils the acquisition-seeking strategy.

farm in farm out agreement

Chairman Rick Crabb and Philippine director Rufino Bomasang will retire at the 25 November 2015 AGM. Director John Jetter, on the board since 2007, was elected to become non-executive chairman. Described by Otto as planned succession.

director officer appointment

Otto paid the final US$7m to Great Bear Petroleum, earning 8% and 10.8% working interests in two Alaskan North Slope areas. Future drilling exposure is capped at US$6m across up to three wells. The option over a further 22,804 acres needs no decision yet.

asset acquisition disposition

Tanzania's energy ministry extended the deadline to drill a well in each of the Kilosa-Kilombero and Pangani licences from 20 February 2016 to 20 February 2017. Otto holds 50% with Swala operating. This eases the drilling deadline noted earlier.

regulatory community update

Hawkeye-1 reached 2,920m and logged hydrocarbons from 2,710m to 2,737m, with water below. Otto says the find is at the very low end of expectations and not economic. The well will be plugged; Otto is fully carried on cost. Cinco and other prospects remain.

drilling result

Otto terminated the Borealis LOI and instead bought 100% of Borealis for A$1.2m in shares (17,518,250 shares). Borealis can earn 8% and 10.8% of Great Bear's Alaska acreage; payments of US$4m, US$2.5m and US$7m follow. Replaces the earlier US$4m for about 40% plan.

asset acquisition disposition

Otto signed an option for Pryce Gases to earn 10% of SC55 by paying 10% of Hawkeye-1 well costs, with US$3.225m due before drilling. Otto would retain 68.18%. The Maersk Venturer has mobilised, with drilling due to start that weekend.

farm in farm out agreement

Red Emperor says the Philippine Department of Energy approved the assignment of its 15% SC55 interest, the last condition on its farm-in with Otto, so the deal is complete. Maersk Venturer mobilisation remains on schedule.

farm in farm out completion

Otto agreed by letter of intent to put US$4m into Borealis Petroleum, giving it about 40% of Borealis. Borealis can acquire 8% and 10.8% interests in Great Bear's Alaskan North Slope acreage. A new onshore Alaska thread alongside Philippines and Tanzania.

asset acquisition disposition

Shareholders approved the return of capital (about 99.1% of proxies in favour), and directors declared the A$0.0076 unfranked special dividend. A$0.064 per share will be paid on 26 June 2015, completing the payout planned since the Galoc sale.

dividend declaration

Otto signed a binding contract for the Maersk Venturer drillship, finalising the earlier letter of intent. Mobilisation starts 17 July-15 August 2015; Hawkeye-1 costs US$30-35m (dry hole). Otto says it is free-carried via BHP's US$24.5m and Red Emperor, keeping 78.18%.

contract award

Otto signed a farm-in with Red Emperor to earn 15% of SC55, with its well cost capped at US$5.625m. Otto also signed a letter of intent for the Maersk Venturer drillship for Hawkeye-1, planned for Q3 2015. This is the first firm farm-out partner after the PNOC-EC expression of interest.

farm in farm out agreement

The Galoc sale to Nido completed; final proceeds of US$77.4m lifted cash to US$106m. The board intends to raise the proposed capital return to A$0.064 per share (A$73.9m), pending an ATO class ruling and a shareholder vote. Remaining cash funds SC55 and Tanzania exploration.

asset acquisition disposition

PNOC Exploration Company expressed interest in a 15% SC55 farm-in; commercial terms are agreed, subject to Philippine presidential office approval. Hawkeye-1 is now expected in Q3 2015, with long lead items committed. Best net resource is 74 MMbbl after the farm-down. Progresses the long-sought farm-out.

farm in farm out agreement

Nido Petroleum agreed to buy Otto's Galoc interest for US$108m, US$6.6m above Risco's US$101.4m offer. Risco waived its match right and its deal ended. A new shareholder meeting is set for January 2015; the capital return is now expected in Q1 2015.

asset acquisition disposition

The Philippines DOE granted a 12-month extension of SC55 Sub-Phase 4, which now expires 23 December 2015, giving more time to drill Hawkeye-1. Farm-out talks continue, with an update promised soon. This resolves the earlier December 2014 well deadline.

regulatory community update

Otto agreed to sell its 33% Galoc interest (via Galoc Production Company) to Risco Energy for US$101.4m, effective 1 July 2014; US$10.14m deposit paid. Proceeds fund two years of exploration and a proposed A$0.06/share capital return. Needs shareholder approval; meeting by December 2014.

asset acquisition disposition

Otto fully repaid the US$35.9m BNP Paribas Galoc Phase II facility, ahead of its December 2015 expiry, using Galoc cash flow and strong oil prices. Otto is now debt free; future Galoc cash is to fund exploration.

debt financing

Otto withdrew from SC51 in the Philippines, saying a well cannot be safely drilled after Duhat-2 hit high-pressure water, and no other drillable prospects remain. Closes the thread of the July 2013 unsuccessful well, whose costs were already written off.

asset acquisition disposition

The Philippines DOE approved the return of BHP's 60% of SC55 to Otto, lifting Otto to 93.18% and operator. BHP pays US$3m now and US$24.5m after the first well. Farm-out to find a new partner for Hawkeye-1 is targeted for mid-2014.

farm in farm out completion

Independent RISC review puts Galoc reserves at 1 January 2014 at 2.75 MMbbl proved and 3.77 MMbbl proved-plus-probable, net to Otto. 2P was adjusted by under 1%, down from 4.3 MMbbl at January 2013 mainly through a year of production. Field expected to produce beyond 2020; current output about 9,700 bopd gross.

resource reserve update

CFO Matthew Allen becomes CEO immediately after Gregor McNab resigned by mutual agreement for personal reasons. Allen has been with Otto since 2009; his salary is A$475,000. Changes the chief executive mid-way through the SC55 and Tanzania programmes.

director officer appointment

Otto and partner Swala elected to enter Years 3 and 4 of both Tanzanian licences, committing to one exploration well in each block before February 2016. Decision follows positive seismic results and Neogene basins seen as similar to Kenya and Uganda discovery areas. Otto holds 50% of each.

farm in farm out agreement

Otto signed final binding agreements with BHP to end the SC55 farm-out, replacing the November letter of intent. On DOE approval Otto takes back BHP's 60% (to 93.18%); BHP pays US$3m then US$24.5m after the first well. Hawkeye-1 could spud as early as Q4 2014; farm-out under way.

farm in farm out completion

Partner Swala's independent assessment of the Kito prospect in Kilosa-Kilombero gives Otto's 50% a net prospective (undrilled, unrisked) resource of 19.2-169.6 million barrels, best estimate 60.4 million. Otto's first quantified Tanzanian target, following the November seismic; to be matured to drillable status.

resource reserve update

Galoc Phase II first oil: the 5H and 6H wells began producing on 4 December, with field output at 14,500 bopd and 12,000 bopd expected going forward. Delivered about 14 months after approval, close to the August 2012 budget. Otto holds 33%. Resolves the hook-up thread.

production update

Otto signed a letter of intent with BHP to take back BHP's 60% of SC55, lifting Otto to 93.18%. BHP would pay US$3m on government approval and US$24.5m when the first well is drilled. Otto plans Hawkeye-1 and a farm-out. Resolves the BHP withdrawal dispute; binding agreement still to come.

farm in farm out agreement

BHP verbally told Otto it will not participate in the Cinco-1 well and will withdraw from SC55, with no prior indication, reversing the clearance reported a week earlier. Otto has no written notice and says it will strenuously enforce its legal rights, including BHP's obligation to fund Otto's interest.

farm in farm out agreement

SC55 joint venture received formal SEP Clearance from the Palawan council to drill Cinco-1, resolving the pending written endorsement. BHP, the operator, has approached the Philippines energy department about revised work programme timing; a separate announcement is expected.

regulatory community update

Galoc-6H flowed a stable 3,800 bopd on a 56/64" choke, with 4,000-6,000 bopd expected deliverability. This completes Phase II drilling, and the rig is leaving. Hook-up continues through November, consistent with the 12,000 bopd field forecast.

well test result

Galoc-5H flowed 6,300 bopd to surface on a 64/64" choke during clean-up testing. Otto expects 8,000 to 12,000 bopd initial deliverability, consistent with the 12,000 bopd field forecast once Phase II starts in late November 2013. Galoc-6H is next.

well test result

Otto will relinquish its 79% stake in SC69 offshore the Visayas after seismic work and a farm-out process that did not deliver an acceptable commercial outcome. It says drilling in 700 m water without a partner was too risky; this resolves the open farm-down thread.

asset acquisition disposition

Drilling of Galoc-5H (final depth 4,497 m) and 6H is complete, with 1,645 m of net oil pay across 3,177 m of horizontal reservoir and high permeability. FPSO upgrades are done on schedule; November 2013 first oil unchanged. Well deliverability is still to be confirmed by flow tests.

drilling result

Otto formally secured Service Contract 73 (formerly Area 7, ~8,440 km2 offshore Mindoro Basin) in the Philippines contracting round, as flagged earlier. Initial 18-month commitment is seismic reprocessing, minimum US$0.5m, adding new exploration acreage.

asset acquisition disposition

Palawan's environmental council (PCSD) approved issuing the SC55 environmental clearance for the Cinco-1 well, which had been expected since September 2012. Written endorsement is being finalised, and the joint venture will ask the Department of Energy to confirm revised work program timing after the force majeure suspension.

regulatory community update

Duhat-2 hit high-pressure brackish water at about 200 m on 25 July and was shut in with cement on 26 July. Otto will plug and abandon it as a safety decision, with no injuries. Seismic gave no warning; SC51 future work will be reviewed. This ends the well, with no oil found.

drilling result

Drilling of the onshore Duhat-2 well in SC51, Leyte began at 1600 hours on 24 July 2013, expected to take about 31 days if dry. It targets a mean 34 MMbbls (range 1-88) and is funded from Galoc cash flow. Earlier Duhat wells in 2000 and 2011 failed to pass about 300 m.

drilling spud

The Desco Rig-30 has started moving to the Duhat-2 site in SC51, Leyte, with drilling due by late July 2013. The prospect holds a mean 34 MMbbls (range 1-88). Otto holds 80% and says Galoc cash flow fully funds the well; early production possible from 2014 if it succeeds.

drilling scheduled

Studies on 2012 3D seismic support a further mean 12 MMbbls recoverable at Galoc, beyond current development. The joint venture deferred an exploration well because the Ocean Patriot rig, rated to 400 m water depth, cannot reach the best locations. A suitable rig is needed first.

resource reserve update

The Philippines Department of Energy approved a six-month extension of SC69 Sub-Phase 3 to 7 November 2013. Otto (79%) will finish technical work, start well planning and run a farm-down. This resolves the lapsed Sub-Phase 3 date and gives time to find a partner.

regulatory community update

The Ocean Patriot began drilling the Galoc-5H and 6H Phase II development wells at 1300 hours on 4 June 2013. Drilling is expected to take about 115 days; weekly updates start 12 June. This starts the Phase II work toward Q4 first oil.

drilling spud

BHP lodged force majeure over SC55, suspending the Fourth Sub-Phase obligations including Cinco-1 and preserving remaining exploration time until SEP clearance arrives. Otto cannot say when. This resolves the August 2013 deadline worry but leaves drilling indefinitely delayed.

regulatory community update

BNP Paribas confirmed all conditions are met, closing the US$37.4m Galoc Phase II loan, expiring 31 December 2015. First drawdown is now expected Q2 2013 as cash flow has funded spending so far. Otto also removed five group companies.

debt financing

Otto says all critical SC55 permits are held except the Strategic Environmental Plan clearance, held up since August 2012 because Palawan's provincial board wants a socio-economic programme. No extension to the August 2013 deadline has been sought; force majeure remains an option.

regulatory community update

BHP, operator of SC55, told Otto that Philippine regulatory approvals needed to drill Cinco-1 are still outstanding. Otto is assessing the impact on the August 2013 deadline, with temporary suspension under force majeure among the options discussed.

regulatory community update

Independent review lifts Otto's net Galoc reserves at 1 Jan 2013 to 3.4 MMbbl proved and 4.3 MMbbl proved plus probable. Attributed to better reservoir performance and higher oil prices. Field expected to produce beyond 2020. The 2P figure is slightly below the earlier 4.4 MMbbl.

resource reserve update

Otto was named preferred bidder for Area 7 (about 8,440 km2, offshore Mindoro) in the Philippines licensing round. Final award needs the service contract signed; Otto would then commit at least US$0.5m to seismic reprocessing within 18 months.

regulatory community update

Otto and Swala moved into year two of both Tanzanian licences, committing to up to 500 km of 2D seismic. 2012 airborne surveys confirmed basins at Kilosa-Kilombero and possibly Pangani. Seismic results are due before end 2013, when a drill decision follows.

regulatory community update

Otto signed the binding US$37.4m BNP Paribas loan for its Galoc Phase II share, expiring 31 December 2015, with repayments from Q1 2014. First drawdown is expected Q1 2013. Phase II is on track for first oil in 2H 2013, with rig mobilisation in early Q2 2013.

debt financing

The SC51 North partners approved the Duhat-2 well and budget, targeting a spud around mid-2013. Success-case mean recoverable is 23 MMbbl (upside 59 MMbbl, gross), following the new 2D seismic. Otto, holding 80%, will fund it from cash and revenue.

drilling scheduled

Otto bought SWAN's 40% of SC51 North (onshore Leyte) for A$1.25m, lifting its interest to 80% as operator. This completes the pending SWAN transaction in Otto's favour. Otto funds all costs through the Duhat-2 well, due to spud in 2013.

asset acquisition disposition

Galoc Phase II approved: US$188m total cost, Otto's share US$62m, lifting output from 5,600 to over 12,000 bopd with first oil in 2H 2013. Net 2P reserves rise to 4.4 MMbbl. Otto mandated BNP Paribas for a US$37.4m loan, ending its debt-free status once drawn.

material agreement

The DoE approved a 12-month extension of SC55 Sub-Phase 4 to 5 August 2013, less than the 18 months BHP requested. The Cinco well is still due in that period and no drilling date can be given until a rig is secured.

regulatory community update

Independent review (RISC) lifted Galoc's ultimate recovery by 19.7% (1P) and 3.5% (2P) at 1 Jan 2012. Otto's net 2P reserves are 1.89 MMbbl, with about five years of life from the existing two wells. Phase II FID is still targeted for mid-2012.

resource reserve update

Tanzanian government approved the assignment of a 50% interest in the Kilosa-Kilombero and Pangani PSAs from Swala to Otto, resolving the pending approval from February. Aeromagnetic data reprocessing has started and an airborne magnetic and gravity survey is planned for July 2012.

farm in farm out completion

BHP, as SC55 operator, asked the Philippine DoE to extend Sub-Phase 4 by 18 months, moving the Cinco well deadline from 5 Aug 2012 to 5 Feb 2014. The reason given is securing a suitable ultra-deepwater rig; no drilling date can be given.

regulatory community update

Galoc restarted production on 2 April 2012 after the planned shutdown, on schedule with the late Q1 target. A new bow-mounted, non-disconnectable turret mooring was installed, expected to improve uptime. Phase II FID is still targeted around mid-2012.

production update

Nido, a Galoc partner, reported an independent audit lifting Galoc 2P reserves to 22.89 MMstb gross (from 18.6) at 31 December 2011. Better-than-expected reservoir performance in late 2011 is credited. Nido's own net 2P figure is 3.07 MMstb. Positive for Otto's 33% Galoc stake.

resource reserve update

The Philippine Department of Energy approved the transfer of 60% and operatorship of SC55 to BHP Billiton, completing the farm-in conditions. Otto keeps 33.18% and Trans-Asia holds 6.82%. Cinco-1 drilling planning continues, with the rig situation still to be updated.

farm in farm out completion

Otto agreed to acquire a 50% interest in two onshore Tanzanian PSAs, Kilosa-Kilombero and Pangani, from partner Swala. The blocks cover almost 34,000 km2. This is Otto's first East Africa entry, fulfilling its stated strategy. Tanzanian government approval of the assignment is pending.

asset acquisition disposition

BHP Billiton terminated the contract for the Transocean Deepwater Expedition rig because it failed key acceptance tests. The Cinco well start date is now unconfirmed, against a 5 August 2012 deadline for the sub-phase. This undermines the planned April 2012 spud.

drilling scheduled

Otto signed the final SC55 farm-in agreements with BHP Billiton, following BHP's May 2011 option exercise. Otto receives a final US$7.3m back-cost payment, of which US$5.0m is already received. Philippine Department of Energy approval of the transfer is still needed.

farm in farm out completion

Gregor McNab, a BHP Billiton executive for seven years, became CEO on 1 November 2011, ending the Acting CEO period. Package: A$500,000 salary, A$150,000 short-term incentive and 15m performance rights. Resolves the CEO search.

director officer appointment

Otto completed the Vitol deal, owning 100% of Galoc operator GPC and holding a 33% direct interest in Galoc. This resolves the acquisition announced on 12 August; Otto now operates the field and turns to Phase II.

asset acquisition disposition

Otto agreed to buy Vitol's 68.62% of Galoc operator GPC, taking it to 100% and Otto's Galoc stake from 18.78% indirect to 33% direct after on-selling 26.84% to Risco. Otto's share costs US$18.7m from cash; 2P reserves rise 0.98 MMbbl. Completion due by 30 Sept 2011.

asset acquisition disposition

The Galoc partners approved a new turret mooring and riser system for the FPSO, aimed at uptime above 95%. The FPSO leaves the field for about 90 days from September. Phase 2 approval is targeted for early 2012. Production is about 6,800 bbl/day.

joint venture update

Duhat-1A sidetrack also stuck at 321m, and further drilling was judged unsafe, so the well is being abandoned short of the 1,000m target. Otto cites high gas readings as encouraging, but unexpected shallow overpressure needs study. The well did not test the target.

drilling result

BHP Billiton exercised its option to farm into SC55, earning up to 60% and operatorship by reimbursing past costs and funding one deepwater well by 2012. Otto keeps 33.18%. This resolves the open BHP decision; approvals are still needed.

farm in farm out agreement

Independent review of Galoc reserves at 1 Jan 2011: Otto's share of proven reserves rose 78% to 0.69 MMboe and proven plus probable rose 52% to 1.38 MMboe. Contingent resource for Phase 2 is 0.85 MMboe. Field life now expected to about 2014-2018.

resource reserve update

Duhat-1 spudded on 19 April 2011 in SC51, onshore Leyte, Otto's first operated Philippine exploration well. It aims for 1,000m in about 27 days. Pre-drill oil in place is 12-263 MMbbl (P50 76 MMbbl); Otto holds 40% pending SWAN approval.

drilling spud

Managing Director Paul Moore resigned, effective 1 July 2011, for personal reasons and to relocate overseas. The board has started a search for a new CEO. Director Ian Boserio will assist management in the meantime.

director officer appointment

Initial interpretation of SC55's 1,800 km2 seismic shows large to very large Nido carbonate leads alongside Hawkeye. SC69 3D seismic contract is signed for late Q2 2011, Duhat-1 is mobilising, and BHP Billiton's farm-in decision is due in Q2 2011.

drilling scheduled

Otto agreed with partner Trans-Asia to raise its SC55 stake by 8.18% to 93.18%, and its SC69 stake by 9% to 79%. Otto carries Trans-Asia through SC55 wells and part of SC69 costs, with interest reverting if Otto does not drill.

farm in farm out agreement

Otto farmed out 40% of SC51 to unlisted SWAN Oil and Gas, which pays the first US$1.5m of Duhat-1 and gets 80% of the southern block. Otto stays operator and keeps 40% of the northern block, leaving it with 40% overall. Awaiting Philippine energy department approval.

farm in farm out agreement

Otto's subsidiary signed a land rig contract with DESCO to drill Duhat-1 in SC51, onshore Leyte, starting around early March 2011 for about 27 days to 1,000m. Prospective resource 1-62 million barrels recoverable; the well satisfies the sub-phase 3 work commitment.

contract award

Otto agreed to sell its 35% Edirne gas interest in Turkey to Valeura Energy for US$3.1m, effective 1 October 2010, with closing expected around 22 December. The Turkish assets underpinned Otto's 2004 listing; the sale focuses it on the Philippines.

asset acquisition disposition

Galoc production shut in during Typhoon Megi, with the FPSO disconnected from its mooring; restart is expected to take at least several weeks. Otto met its 2010 target with 427,080 bbl, and 248,000 bbl of saleable crude sits in the tanks.

production update

FY2010 statutory loss A$33.3m (A$57.3m prior), mostly A$32.9m non-cash writedowns on Philippine SC50/51 and Edirne exploration spend. Annual production 575,443 bbl; 2P reserves 1.05 mmboe (1.87 prior). Reporting currency changes to US dollars from 1 July 2010.

annual report

Paul Moore, CEO since July 2009, joins the board as Managing Director, and Ian Boserio, ex-Shell and Woodside explorer, becomes a non-executive director. Founder Dr Jaap Poll will retire at the November AGM; John Zadnik resigns as alternate director.

director officer appointment

First sales gas from Edirne, Turkey (Otto 35%) was delivered into the BOTAS grid on 9 April, making it Otto's second producing asset. Steady-state output expected at 10-14 mmscf/d after commissioning. Resolves the Q1 2010 start-up thread.

production update

BHP Billiton will fund 1,000-2,000 km2 of 3D seismic in SC55 in return for an option to earn 60% by funding two deepwater wells and refunding Otto's past costs. Subject to formal agreements and approvals. Advances the Philippine farm-down effort.

farm in farm out agreement

Edirne JV signed a five-year gas sales agreement with AKSA for all Edirne gas, at a 15% discount to the BOTAS industrial tariff (Otto expects US$7-8/GJ). Gross 2P+2C about 8.5 Bcf (Otto 3 Bcf), initial 10-14 mmscf/d from early 2010. Resolves the pending sales agreement.

material agreement

Otto estimates Galoc gross 2P reserves at 8.4m barrels (Otto share 1.46m) at 30 June 2009, with 6m barrels gross 2C contingent. First-year output topped 2.9m barrels and Otto received its first GPC distribution of US$2.16m in August. Resolves the pending reserves reassessment.

resource reserve update

Galoc restarted production on 13 August after about seven weeks shut in, resolving the June weather-disconnection and riser damage. Output is expected to settle at the pre-shutdown 11,000 barrels a day, restoring cash flow to Otto's 18.77% indirect interest.

production update

The Santa Rosa well in Argentina (Otto 32.5%) reached 1,270m with no hydrocarbons; target reservoirs were absent at this crest location. It will be abandoned as a dry hole. Second dry hole in two months, ending non-operated drilling.

drilling result

Galoc production remains shut after the late-June weather disconnection because the mooring and riser system is misaligned and deformed. A construction vessel is on site and the repair scope and duration are unknown. Continues the June shut-in.

production update

Galoc commerciality declared after the extended test; Galoc project debt (over US$40m) and Otto's shareholder and director loans are fully repaid, leaving Otto debt-free with about A$13m cash. Otto expects regular dividends from GPC. Gazzata-1 confirmed dry; Santa Rosa spud now July; FPSO disconnected again for weather.

material agreement

Paul Moore, ex-Woodside, Santos and Fletcher Challenge executive, becomes CEO on 1 July 2009, replacing Alex Parks. He receives 7.5m options (12c, expiring 30 June 2014) and will subscribe for 1.25m shares at 8c ($100,000).

director officer appointment

Gazzata-1 in Italy's Po Valley, drilled to 2,840m, showed no commercial gas and will be abandoned as a dry hole. Otto was funding it to earn 50%. Separately, Ikihoyuk-2 in Turkey flowed up to 4.95 MMscf/d, a high rate for the licence.

drilling result

Gazzata-1 in Italy's Po Valley spudded on 19 May, targeting over 100 Bcf of prospective gas at about 2,100m. Otto earns 50% by funding it. Kirmizihoyuk-1 in Turkey logged about 15m of gas pay, to be tested. Argentina drilling is due mid June.

drilling spud