article in todays australian

Otto-man eyes oilfield off Philippines
Nigel Wilson, Energy writer
February 26, 2007

ALEX Parks, the new CEO of oil and gas hopeful Otto Energy, believes the company could be earning annual revenues of between $6 million and $8 million from the end of the year.
Otto, once named Ottoman Energy to reflect its interest in Turkey, is convinced that it will garner enough revenue from gas in Turkey to secure its current main game, the Calauit oilfield off the Philippines.
Mr Parks said Otto was in negotiations to sell its Turkish gas production in a market where prices were higher than the international Henry Hub benchmark at around $US9.50 a thousand cubic feet.

Otto, which was listed in December 2004, has interests ranging from 65 per cent to 80 per cent in three gas prospective licences in the Thrace Basin in eastern Turkey and recently announced two gas discoveries.

Considering that it was able to complete wells at $US600,000 each and was looking at between five to 15 targets in the range of 1billion cubic feet, the Turkish business was going well.

He pointed out that Turkish authorities were keen to displace imports from Russian and Iran and were encouraging gas distribution outfits to buy supplies from domestic producers.

Mr Parks, a London-trained geologist who joined the company in December, said Otto's Turkish experience would provide it sufficient cash flow to help fund its exploration activities in the Philippines and in Argentina.

The company's main aim is to bring the Calauit oilfield into production next year with a daily targeted production rate of up to 15,000 barrels.

The Calauit oilfield is estimated to contain 39.4 million barrels of oil, out of which 6.44 million barrels are estimated to be recoverable.

Otto estimates the field could yield as much as 12 million barrels.

Last year Otto entered a three-year bare-boat charter for a new multi-purpose semi-submersible rig to be delivered in October 2007 with an initial on-board production capacity of 15,000 barrels of fluid a day.

Otto financed the charter through a placement of 15 million shares (with 7.5 million 20c options) to UK and Asian investors to raise $2.25 million.

Mr Parks said he expected Calauit to come into production in the first quarter of next year, arguing it could produce earnings of between $50 million and $100 million.