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" Yes I would not be surprised to see drilling of Bivouac Peak...

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ronstieb

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18/03/17

15:01

Post #: 23453082
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Originally posted by car27 ↑

bmensies re " Possible Ronstieb, but maybe earlier because they will not have much left when they have committed to SM71 and management is prudent "

Yes I agree OTTO management is prudent , but I still doubt that OTTO directors will be asking OTTO shareholders for money via a capital raising for the reasons outlined below.....

OTTO 's 6/3/ 17 announcement said "Otto continues to work towards resolution of existing Kilosa-Kilombero licence joint venture issues and disputes as well as its matter in the Federal Court of Australia involving Swala Oil and Gas"
AND ALSO
"Discussions with MV Upstream with respect to its participation in the Kito-1 exploration well are continuing."
To my way of thinking that sounds like MVUpstream are still interested so I DOUBT IF Tanz drill will go ahead unless OTTO get similar terms to the original farm out agreement i.e

Under the terms of the (ORIGINAL) farm down agreement with MV Upstream:
 MV Upstream shall pay to Otto the sum of US$2.3 million (inclusive of applicable taxes) as reimbursement of historical costs incurred by Otto.
 In addition to paying its 25% participating interest share of well costs, MV Upstream shall carry Otto’s remaining 25% working interest through the drilling of the Kito prospect up to an amount of US$2 million. Costs over and above this capped amount shall be payable by Otto in accordance with its remaining 25% participating interest.
 In the event of a discovery at Kito, MV Upstream shall carry Otto’s remaining 25% working interest through the drilling of an appraisal well up to an amount of US$1 million.

That agreement implies a virtual free carry for OTTO plus US$2.3 million.

SO with OTTO having US $16.95 in the bank as at 31/12/16 and march qtr expenditure of us$1 million (excluding SC71 development) plus an estimated cost of us$9 million to commission SC71, plus my estimate of OTTO admin costs of us $3million till the end of the 2017 calendar year would leave OTTO with a 31/12/17 bank balance of US$6.25 before deducting the estimated US$6 million for the Bivouac Peak well and before allowing for any cash received for oil sales from a producing SC71 .

Yes I would not be surprised to see drilling of Bivouac Peak delayed till 2018 (Byron is also very tight for cash at the moment and might prefer getting cashflow from SC71 before drilling Bivouac Peak).

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" Yes I would not be surprised to see drilling of Bivouac Peak delayed till 2018 (Byron is also very tight for cash at the moment and might prefer getting cashflow from SC71 before drilling Bivouac Peak). "

Makes sense.

OEL Price at posting: 3.3¢ Sentiment: Hold Disclosure: Held
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