Otto Energy, an oil and gas company, is planning to exit its Service Contract 55 (SC55), offshore the Philippines, and focus on its North American assets.
SC55 is a deep-water block located in the southwest Palawan Basin, covering an area of 9,880km2.
Otto is the operator of SC55 with 78.18% interest and the partners are Red Emperor Resources, with 15% interest, and Palawan 55, with 6.82% interest. SC55 was awarded to Otto in 2005.
According to Red Emperor, Otto now plans to exit the joint venture.
As a result of Otto’s exit, Red Emperor said it would have the option to either maintain its 15% participating interest in SC 55 or be assigned a percentage of Otto Energy’s interest on a pro-rata basis.
In this instance, Red Emperor’s participating interest could be increased by up to 22.5% to 37.5%. Red Emperor said it was considering its options.
In December 2015, Otto asked for a two-year moratorium over the SC55 from the Philippines Department of Energy as the work obligation was fulfilled by drilling the Hawkeye-1 exploratory well in August 2015.
According to Red Emperor, 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.
Offshore Energy Today Staff