OTTO ENERGY LIMITED 20 July 2016
INDEPENDENT RESERVES REPORTED FOR SM-71 (Updated Release)- Successful exploration drilling results in maiden reserves booking for Otto's Gulf of Mexico portfolio - Net 2P reserves of 2,271 Mboe to SM-71
- SM-71 discovery has been delivered for a finding cost of US$2.11 per BOE
- Additional upside identified in near field opportunities that can be evaluated in future drilling campaigns at minimal cost
Otto Energy Ltd (ASX: OEL) ("Otto" or the "Company") has been advised by the Australian Securities Exchange that the announcement of the maiden reserves booking for SM-71 made on 7 July 2016 has not complied with all of the requirements of Listing Rule 5.31. This is an updated release containing the original material and supplemental material in order to comply with Listing Rule 5.31.
Otto is pleased to advise that it has received the independent reserves report on the SM-71 discovery in the shallow waters of the Gulf of Mexico from Operator, Byron Energy Limited (ASX: BYE) ("Byron").
The independent reserves estimates were prepared by Collarini Associates ("Collarini"), based in Houston, Texas, USA.
SM-71 is a joint venture between Byron and Otto, as initially announced to the ASX on 11 December 2015. Byron is the operator of SM-71 with each company having a 50% working interest and a 40.625% net revenue interest in the project.
Otto Energy Ltd Reserves SM-71 (Net to Otto) Gulf of Mexico, offshore Louisiana, USA | |||
30 June 2016 | Oil Mbbl (*) | Gas MMscf (*) | MBOE (6:1) |
SM-71 (Undeveloped) | |||
Proved (1P) | 582 | 404 | 649 |
Probable Reserves | 1,445 | 1,058 | 1,621 |
Proved and Probable (2P) | 2,027 | 1,462 | 2,271 |
Possible Reserves | 540 | 373 | 602 |
Proved, Probable and Possible (3P) | 2,567 | 1,835 | 2,873 |
Total Prospective Resource (Best estimate, unrisked) | 2,043 1,990 2,375 | ||
*Mbbl = thousand barrels; MMscf = million standard cubic feet; Mboe = thousand barrels of oil equivalent ("BOE") with a BOE determined using a ratio of 6,000 cubic feet of natural gas to one barrel of oil - 6:1 conversion ratio is based on an energy equivalency conversion method and does not represent value equivalency
32 Delhi Street, West Perth WA 6005 Australia PO Box 1414, West Perth, WA 6872 Australia T: +61 8 6467 8800 F: +61 8 6467 8801
info@ottoenergy.com ASX Code: OEL ABN: 56 107 555 046
The reclassification of the now discovered D5 sand from Prospective Resource to Reserves has been offset by the inclusion of a newly matured opportunity in the B65 sand within the Prospective Resource category. The B65 sand overlies the D5 sand reservoir in the vicinity of the SM-71 #1 well and is a prolific oil producer on other portions of the SM-71 salt dome. This target forms additional upside that can be evaluated in future drilling programs at minimal additional cost. The joint venture will continue to incorporate the results of the recent drilling campaign into its understanding of the salt dome play to identify further potential upside.
Oil prices used in the reserves report represent NYMEX base, starting on July 1, 2016 of $US50.21 per barrel with a final price of $US59.97 per barrel on December 1, 2023 and held constant thereafter; gas prices used in this report represent Henry Hub base, starting on July 1, 2016, of $US3.10 per MMscf, rising to a final price of
$US4.68 per MMscf on December 1, 2029 and held constant thereafter.
Otto's Managing Director, Matthew Allen said: "Otto is very pleased to report its maiden reserves in the Gulf of Mexico portfolio acquired in late 2015. The SM-71 discovery has delivered a very significant reserve base to Otto for a very low finding cost of US$2.11 per barrel of oil equivalent. With additional near field drilling opportunities being identified, the SM-71 lease is proving to be very value accretive for the joint venture. We look forward to bringing this discovery into production in 2017 and return to being a cashflow producer."
32 Delhi Street, West Perth WA 6005 Australia PO Box 1414, West Perth, WA 6872 Australia T: +61 8 6467 8800 F: +61 8 6467 8801
info@ottoenergy.com ASX Code: OEL ABN: 56 107 555 046
Appendix 1 Reserves and Prospective Resources as at 30 June 2016Otto Energy Ltd Reserves SM-71 (Net to Otto) Gulf of Mexico, offshore Louisiana, USA | ||||||||||
Reserves Reconciliation | Oil (Mbbl) | Gas (MMscf) | ||||||||
30-Jun-15 | Prod'n | Farm-in | Revisions | 30-Jun-16 | 30-Jun-15 | Prod'n | Farm-in | Revisions | 30-Jun-16 | |
SM-71 (Undeveloped) | ||||||||||
Proved (1P) | - | - | 249 | 333 | 582 | - | - | 135 | 270 | 405 |
Probable Reserves | - | - | 94 | 1,351 | 1,445 | - | - | 51 | 1,007 | 1,058 |
Proved and Probable (2P) | - | - | 343 | 1,684 | 2,027 | - | - | 186 | 1,277 | 1,463 |
Possible Reserves | - | - | 177 | 363 | 540 | - | - | 138 | 236 | 374 |
Proved, Probable and Possible (3P) | - | - | 520 | 2,047 | 2,567 | - | - | 324 | 1,513 | 1,837 |
Oil (Mbbl) | Gas (MMscf) | |||||||||
30-Jun-15 | Prod'n | Farm-in | Revisions | 30-Jun-16 | 30-Jun-15 | Prod'n | Farm-in | Revisions | 30-Jun-16 | |
Total Prospective Resource (Best estimate, unrisked) | - | - | 2,277 | - 234 | 2,043 | - | - | 1,680 | 310 | 1,990 |
After adjusting for the farm-in from Byron Energy Limited, announced to the ASX on 11 December 2015, the significant upward revisions in 1P, 2P and 3P reserves between 30 June 2015 and 30 June 2016 mainly reflects the impact of the successful drilling of the SM 71 #1 well, the results of which were announced to the ASX on 2 May 2016, resulting in re-classification of D5 sand net oil pay from Prospective Resources to Reserves.
After adjusting for the farm-in from Byron Energy Limited, announced to the ASX on 11 December 2015, the revisions in Prospective Resources between 30 June 2015 and 30 June 2016 mainly reflect the impact of the successful drilling of the SM 71 #1 well, with re-classification of D5 Sand net oil pay from Prospective Resources to Reserves) offset by inclusion of the B 65 Sand in Prospective Resources.
Additional Disclosures required under Listing Rule 5.31:
Listing Rule 5.31.4 - description of: | |
| The commercial producibilty of undeveloped reserves is based on close analogy to nearby production from similar stratigraphic sands and which exhibit a similar trapping style and the well logs obtained while drilling SM 71 #1 well. |
| Undeveloped reserves are estimated using a combination of structure mapping from 3D Anisotropic RTM seismic and logs from Byron Energy SM 71 #1 well drilled in May 2016, and well log data from previously producing wells on SM71 and adjacent blocks have been incorporated into the evaluations. |
| Water drive reservoirs with sand control completions. |
| Nil. |
32 Delhi Street, West Perth WA 6005 Australia PO Box 1414, West Perth, WA 6872 Australia T: +61 8 6467 8800 F: +61 8 6467 8801
info@ottoenergy.com ASX Code: OEL ABN: 56 107 555 046
Listing Rule 5.31.6 If the reported estimates of petroleum reserves relate to undeveloped petroleum reserves, a brief statement regarding:
| The successful SM 71 #1 well has been mudline suspended and completed for future production through ANKOR (Offset operator) facilities at SM 69B. The following additional items are needed to bring the well into production:-
Byron has initiated the facility and pipeline design process with the objective of achieving initial production by mid-2017. Gulf of Mexico has a well-established oil and gas marketing infrastructure making sale of commercial oil and gas production virtually certain. Gulf of Mexico has a well-established and accessible transportation infrastructure which allows relatively quick access to market. Prior to drilling SM 71 #1 well Byron obtained (i) approval for an Exploration Plan ("EP") from the Bureau of Ocean Energy Management ("BOEM"), and (ii) a permit to drill from the Bureau of Safety and Environmental Enforcement ("BSEE"). Byron is in the process of compiling a Development Operations Co-ordination Document ("DOCD") for approval by the BOEM which Byron expects to obtain in normal course. |
32 Delhi Street, West Perth WA 6005 Australia PO Box 1414, West Perth, WA 6872 Australia T: +61 8 6467 8800 F: +61 8 6467 8801
info@ottoenergy.com ASX Code: OEL ABN: 56 107 555 046
Otto Energy Limited published this content on 20 July 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 20 July 2016 00:18:08 UTC.
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