old but interesting news

Oel release on the 5th 0f May 2009 concerning the BHP farm in was as follows,

"Otto Energy Limited (Company) (ASX: OEL) advises that following the lapse of
the Heads of Agreement with BHP Billiton Petroleum Pty Limited
on 31 March 2009 as previously announced, discussions with respect to the
farm out of Service Contract 55 (SC55) have now been discontinued.
The Company still intends to re]initiate farm]in discussions with potential
partners for all its Philippines prospects when market conditions improve."

Below is what is on Asia and Pacific Newsletter August 2009 page 9,

"Australia-based Otto Energy Ltd remains interested in participating in the development of the oil block in the southwest part of the Palawan Basin under Service Contract (SC) 55. Negotiations to jointly develop the service contract between BHP Billiton Petroleum Pty Ltd (BHPBP) and Otto earlier bogged down after the (THIS IS THE INTERESTING BIT)
latter failed to deliver a number of obligations that includes finalising the farm-in and joint-operating agreements, and securing necessary government and joint-venture approvals before the end of March.

SC55 covers 9,000 sq km of an oil block in the southwest Palawan Basin. It involves a deepwater block in the middle of an oil-and-gas fairway that goes from the productive region of offshore Borneo to the Philippine production assets in the northeast.

Otto also said they have been in talks with the Department of Energy (DOE) in a bid to extend its current subphase commitments. As a result of the increased timing and completion risk associated with a potential SC55 farm-out, Otto said it restructured the previously announced $35 million in capital raising. Otto estimated the value of the farm-out to cost about $150 million, based on the midpoint of the estimated value of the consideration offered under the heads of agreement.

Alex Parks, Otto's Chief Executive said that this farm-out is in line with Ottofs exploration strategy in the Philippines, and BHP Billitonfs interest and involvement in this project is a strong endorsement of their belief in the petroleum potential of the Philippines. BHP Billiton is one of the largest and most successful companies in the resources sector.

If the above is true then it would seem that it may have been Otto's own fault for BHP pulling out of Sc55 and since the changing of the ceo the deal has been put back together.

If this is the case, this makes this farm in option look all the more likley to go ahead! IMO DYOR