Australia-based oil and gas company Otto Energy is looking to grow its presence in the U.S Gulf of Mexico now that the SM 71 project is producing and contributing to its cash flow.
Otto has interests in two leases in Louisiana, the South Marsh Island 71 (SM 71) lease and Bivouac Peak lease, both in partnership with Houston-based Byron Energy.
In the SM 71 offshore lease, Otto holds a 50% working interest (40.625% net revenue interest) while the operator, Byron Energy, holds a 50% working interest.
Production from two wells through the SM 71 platform on this lease started in late March but the third well is still not producing. Namely, during completion operations on the F3 well, a drill pipe and other completion equipment got stuck in the wellbore, forcing the operator to start production from the lease without it. In the meantime, the removal of the stuck components continued.
As reported by Offshore Energy Today on Tuesday, Byron has resolved the issue with the third well by removing the damaged completion assembly with plans to start the production from the well by the end of the week.
Waiting for the third well to start producing, Otto on Wednesday said that production from the other two wells, F1 and F2, has been steady at 2,500 bopd and 1,400 mcfpd.
Otto noted that cash flow from the SM 71 project will contribute materially to the company beginning this quarter and will significantly underpin its strategy for growth in the Gulf of Mexico.
Further detailing its growth plans, Otto said that its strategy is to grow its presence in the region through the sourcing of high-impact exploration assets with near-term drilling opportunities. The company expects to participate in a number of drilling events later in 2018, including the Bivouac Peak well, that have the potential to add significant value.
Earned through a staged farm-in with Byron Energy, Otto has a 45% interest in the Bivouac Peak lease.
Furthermore, Otto said that the deal flow in the Gulf of Mexico shelf continues to be attractive and the company is working on a number of “exciting new opportunities.”
Otto’s Managing Director, Matthew Allen, commented: “Otto is at the start of a very exciting phase in its development. Few companies of our size have such substantial cashflow as the basis for funding their growth plans.“
“The start of 2018 has been a pivotal point for Otto shareholders and the remainder of 2018 promises to provide significant opportunities for the company to grow its presence in the Gulf of Mexico.”
Offshore Energy Today Staff