bhp billtion will assume operatorship sc-55

lets say "it's better than"...BHPB in control "luv it"

32 Delhi Street (PO Box 1414), West Perth 6005 Tel: +61 (0) 8 6467 8800 Fax: +61 (0) 8 6467 8801 Email: [email protected] Web: www.ottoenergy.com
11 May 2011 Manager of Company Announcements ASX Limited Level 6, 20 Bridge Street SYDNEY NSW 2000 By E-Lodgement Highlight: ? Farm-in option exercised in SC 55, Offshore Palawan, Philippines Otto Energy Ltd (ASX:OEL) is pleased to announce that BHP Billiton has exercised the option to farm-in to Service Contract 55 (SC55). Subject to joint venture and regulatory approval, BHP Billiton will earn up to 60% participating interest and assume operatorship of the block by reimbursing Otto's past costs and funding one offshore deepwater well by 2012, with an option to drill a second well in a subsequent phase by 2013. Otto Energy will retain a 33.18% interest following BHP Billiton?s farm-in. The farm-in option held by BHP Billiton was granted in January 2010, and Otto has worked over the past 16 months to acquire, process and interpret approximately 1,800 km2 of 3D seismic data in the block. The extensive 3D seismic data indicates the presence of an active petroleum system coupled with a series of large to very large Nido Carbonate structures that supplement the Hawkeye prospect. Otto's Managing Director Paul Moore said, "We are looking forward to continuing to work with BHP Billiton in Service Contract 55 as we move into the drilling phase of exploration activities. The past 16 months has been a very busy period for Otto as we have acquired, processed and interpreted a large volume of seismic data to identify a portfolio of significant oil and gas prospects. We have benefited from the co-operation shown by our joint venture partner, Trans-Asia, and also BHP Billiton." "We now look forward to participating in this exciting offshore deepwater exploration programme which will provide exposure for Otto's shareholders to material exploration in highly prospective, large structure opportunities." Otto will submit the required assignment documents to the joint venture partner and the Philippine Department of Energy for approval of the transfer of participating interest to BHP Billiton. Yours faithfully Paul Moore Managing Director Contact: All enquiries are to be addressed to Matthew Allen, Chief Financial Officer on +61 8 6467 8800 or email [email protected] OTTO AT A GLANCE ? ASX-listed oil and gas company with significant growth potential. ? Production from Galoc Oil Field provides cash flow. ? First operated exploration well in Philippines in Q2 2011. ? Opportunity rich with substantial exploration prospects and leads in Palawan and Visayan basins. COMPANY OFFICERS Rick Crabb Chairman Paul Moore Managing Director Ian Macliver Director Rufino Bomasang Director John Jetter Director Ian Boserio Director Matthew Allen CFO/Coy Secretary
32 Delhi Street (PO Box 1414), West Perth 6005 Tel: +61 (0) 8 6467 8800 Fax: +61 (0) 8 6467 8801 Email: [email protected] Web: www.ottoenergy.com
The Reserve and Contingent Resource estimates outlined in this announcement have been compiled by Mr Nick Pink. Mr Pink is the Senior Reservoir Engineer of Otto and a full time employee. Mr Pink has more than 12 years of relevant experience and is qualified in accordance with ASX Listing Rule 5.11. Mr Pink has consented to the form and context that this statement appears.
Page 3
APPENDIX 1: SERVICE CONTRACT 55 SUMMARY SC55 Permit Overview5Joint Venture Partners:Sub-PhaseDateCommitment3Aug 09 ?Aug 113D Seismic acquisition4Aug 11 ?Aug 121 Deepwater Well5Aug 12 ?Aug 131 Deepwater WellExtensionPeriodFurther 3 years allowedWork Program:FactorPercentageCost recovery cap70Contractorprofit share40Filipino participationincentive allowance7.5CorporateTax (paid from Government share)30Fiscal Terms of Production Sharing Contract:NamePercentageOEL(through 100% subsidiary NorAsian Energy Ltd)93.18Trans-AsiaOil & Energy Development Corporation6.82
Page 4
APPENDIX 2: CINCO PROSPECT Cinco Prospect (OEL WI post farm-down 33.18%)Area of Closure53 km2 Up to 500m column heightWater Depth1,430 metresObjectiveDepth3,120 ?4,500 metresInitial Success Case Gross Recoverable Resource EstimateGas0.47 ?3.8Tcf (mean of 2.1 Tcf) Condensate16?132 MMbbls (mean of 74 MMbbls)SC55 Leading Drilling Candidate ?CINCO7MalampayaTop NidoTop NidoDepth MapCI: 200mCINCO400044003800320042004600480036003400500 mCINCOA reefal/platform carbonate complexmssMALAMPAYA (Northern Palawan)(Proven Reserves 2.5 Tcf Gas and 81 MMbbl Condensate)Maps of same scaleMALAMPAYAAnalogueSame scaleCINCOComparable areal closure to Malampaya