News: Otto Energy December 2013 Quarterly Highlig, page-17

re: News: Otto Energy December 2013 Quarterly... A farmout could take many different forms, it's hard to speculate as to what would be the best fit, but my 2c worth.

Previously BHP paid for all the 3D, reimbursed some past expenses & committed to fully fund the 1st 2 wells, for that they received 60% + operatorship.

We now have the 3D completed & anylysed with quite a few good targets, the main 2 being cinco & hawkeye.
Reading between the lines, I think OEL want to retain operatorship, so would probably only farm out around 40-50%.
Based on the deal they did with BHP with only limited seismic done on SC55, I would expect in order to get 40-50% a potential farminee would need to pay for all of 2 wells as BHP were going to.

This limits potential farminees to reasonably sized companies. The deeper the pockets, the better. The last thing they would want is say 3-4 smaller companies whereby you have to get all 3-4 to agree & be funded to undertake OEL's plans. If OEL have success in SC55 they want partners that have the funds to commit to development.