OEL - (Otto) Multi based, Gambling Stock.

[shasta]

BHP is key for OEL. However, with Paul Moore jumping ship or being pushed (likely) it isn't looking good!

No, not when he ousted the popular Alex Parks, with whom i assume fell on his sword when the original BHP deal lapsed.

You cant take any announcement of "sudden amicable departures" seriously, least Galoc is paying the bills & adding to the cash balance

[Corporate]

No, not when he ousted the popular Alex Parks, with whom i assume fell on his sword when the original BHP deal lapsed.

You cant take any announcement of "sudden amicable departures" seriously, least Galoc is paying the bills & adding to the cash balance

I'm really looking forward to hearing about BHP. Either way what happens after will be a buying opportunity I think.

[boysy]

Yep either way it will beca good opportunity to top up. Will be great buying if Bhp pull out no doubt bout that

[boysy]

Well the quarterly came out with the cash balance increasing further which s good to see to around ~A$34 million galoc continuing to perform well but on decline now producing ~7000 bopd (net 1300). So they are drilling Duhat-1 with result expected in around 3 weeks and BHP decision must happen in the next 4 odd weeks unless they are granted some sort of extension. Plenty to be excited about if BHP opt in the SP should fly and if they dont it would be a great opportunity to pick shares up around the 5-6 cent mark one would think.

[Rabbi]

Well the quarterly came out with the cash balance increasing further which s good to see to around ~A$34 million galoc continuing to perform well but on decline now producing ~7000 bopd (net 1300). So they are drilling Duhat-1 with result expected in around 3 weeks and BHP decision must happen in the next 4 odd weeks unless they are granted some sort of extension. Plenty to be excited about if BHP opt in the SP should fly and if they dont it would be a great opportunity to pick shares up around the 5-6 cent mark one would think.

Well they must have had a real good look at the Seismic , so if it wasn't prospective they would have been out by now. If the prospect looks good they wouldn't want to lose it to another bidder if the permit lapses. They can get 80% to free carry OEL but then they take all the risk. Hard to say how this will pan out.

[boysy]

well positive news Galoc reserve upgrade

And not so positive - Current drilling slow progress - http://www.pse.com.ph/html/NewsRoom/memos/2011/DA_2011-0008.pdf

[Corporate]

Looks like BHP is going to farm in!

[boysy]

yes could be a big payday if bhp do sign on the dotted line as the wording suggests. Lets wait until its official however :-)

[Rabbi]

Exciting times ahead if BHP has indeed farmed in to SC 55

:D

[shasta]

Looks like BHP is going to farm in!

Time to go drilling for elephants! ;)

[jdg]

Hey guys, my first post in ages. I trust everybody is well.
I read the release and got very excited, but I will wait to see what the story is before popping the corks. Could the 'completion of the farmin agreement' mean that it has simply lapsed? I don't think so, but who knows with this lot?
If, as I expect, it's a signature on the bottom line I think we'll finish over 14 cents. I don't want to contemplate the other possibility.
Many of us have held OEL simply based on the possibility of this deal...let's hope we are about to get our reward.
Good luck to holders.

-j

[boysy]

Lets see the detail once would think we will get an ann today after if we get the BHP signature and go ahead from houston. Will be interesting to see how much cash in the hand otto get as the original farm in option noted they would get 100% of past expenditure on sc 55 this could be quite a tidy sum in itself. You have to question how many people will want to enter and how many will bail considering 80m shares changed hands on the farm in option announcement some time back

http://www.stocknessmonster.com/news-item?S=OEL&E=ASX&N=476756

[shasta]

Lets see the detail once would think we will get an ann today after if we get the BHP signature and go ahead from houston. Will be interesting to see how much cash in the hand otto get as the original farm in option noted they would get 100% of past expenditure on sc 55 this could be quite a tidy sum in itself. You have to question how many people will want to enter and how many will bail considering 80m shares changed hands on the farm in option announcement some time back

http://www.stocknessmonster.com/news-item?S=OEL&E=ASX&N=476756

80m shares is less than 10% though, so its not too much of a shake up, probably a few traders jumping in, i dont remember much top 20 activity

[boysy]

with 70% of the shares held by the top 20 you have to question how many freely floating shares are about. No real trading to speak of late this one really has been kept from insiders no obvious volume spikes over the last few weeks good to see they are running a tight ship either way it turns out.

[jdg]

that's the news we wanted! i would like to have seen a comment from BHP, though.
now, let's see how the market reacts.
should be a great day for otto holders.

-j

[jdg]

i was expecting a better opening than that. people are clearly selling the news. buy/sell ratio is terrible. what does otto have to do?

-j

[boysy]

hugely important news yet little more than a nudge upwards. The cash ehading Ottos way as a result of being paid back costs i would expect to be larger than the move today a joke really they got great terms we now know they wont have to pay for the well and galoc phase #2 looks more and more likely what else do they need to do righ lol a great buying opportunity.

[Rabbi]

Obviously the farmin decision was factored in ages ago, and with BHP vacillating the SP subsequently drifted. Since the prospect isn't gong to be drilled until 2012 some speculators are taking the opportunity to get out while the goings good. Investor briefings aren't perceived by the market as anything but oil company spin about their future progamme, which invariably gets pushed out into the everlasting future.

Everyone got excited over CSG about two years ago, and all the CSG juniors could do was over promise the market about how much reserve they could prove up. Then when they couldn't stick to programme, mainly due to weather constraints investors got sick of waiting and headed for the hills.

Galoc phase 2 might see some appreciation but it will still take time to recover costs.

The rumours seems to be always better than the news in this game. When OEL were in
Argentina the SP was over 30 cents just on speculation of a huge prospect.

[shasta]

Obviously the farmin decision was factored in ages ago, and with BHP vacillating the SP subsequently drifted. Since the prospect isn't gong to be drilled until 2012 some speculators are taking the opportunity to get out while the goings good. Investor briefings aren't perceived by the market as anything but oil company spin about their future progamme, which invariably gets pushed out into the everlasting future.

Everyone got excited over CSG about two years ago, and all the CSG juniors could do was over promise the market about how much reserve they could prove up. Then when they couldn't stick to programme, mainly due to weather constraints investors got sick of waiting and headed for the hills.

Galoc phase 2 might see some appreciation but it will still take time to recover costs.

The rumours seems to be always better than the news in this game. When OEL were in
Argentina the SP was over 30 cents just on speculation of a huge prospect.

So OEL closed at its intra day high of 11c (+1.7c) with ~20m traded, technically tomorrow should open strong as the news filters through the market

[jdg]

hey shasta,
intra day high, sure, but hardly a big move. i hope we see some strength tomorrow but i don't feel great about it. when we hit 12 cents after the news BHP were having a look (12 months or so ago) we had a few more prospects (turkey was looking like the business, and SC 51 looked to be a good farm in - neither really worked out). are we now a one hit wonder?
i don't think so. galoc 2 is a gimme, and 69 is shaping up. lotto may come in with duhat. galoc 1 still has a lot to run given recent p1 upgrades. i think the market has this one wrong, but i'm not confident we'll see a turnaround soon. OEL is clearly an unloved stock. i feel we will be rewarded, but i can't see it happening soon given today's action. i hope i'm wrong. and i'm sure boysy agrees (that i'm wrong, that is).
-j

[shasta]

hey shasta,
intra day high, sure, but hardly a big move. i hope we see some strength tomorrow but i don't feel great about it. when we hit 12 cents after the news BHP were having a look (12 months or so ago) we had a few more prospects (turkey was looking like the business, and SC 51 looked to be a good farm in - neither really worked out). are we now a one hit wonder?
i don't think so. galoc 2 is a gimme, and 69 is shaping up. lotto may come in with duhat. galoc 1 still has a lot to run given recent p1 upgrades. i think the market has this one wrong, but i'm not confident we'll see a turnaround soon. OEL is clearly an unloved stock. i feel we will be rewarded, but i can't see it happening soon given today's action. i hope i'm wrong. and i'm sure boysy agrees (that i'm wrong, that is).
-j

When the market realises the true value of the deal to OEL, ie how much cash they getting back, OEL will be re-rated, the SC55 project is now significantly derisked, with BHP assuming operatorship, but a rig must be secured, im sure BHP has the contacts to sort this out.

What counts against OEL is the lack of a serious drilling campaign to provide continual newsflow, its a steady as she goes oil producer with a narrow focus.

The African partnership could provide something out of left field, so they are still looking for opportunities...

[boysy]

Cash back from bhp on sc 55 past costs should more than cover the market cap increase today. You have to wonder what otto have to do right to get mr markets approval

[boysy]

You have to think a large sum of money should be heading Ottos way based on the amount of money they have put into Seismic done to date on sc 55.

400 km 2D prospect specific Oct 2006
963 km 2D regional data June 2007
600 km 3D Dec 2009

so as per farm in condition all of these costs will be reimbursed to otto makes you think if yesterdays sp increase would cover the back costs heading our way.

[boysy]

http://www.energynewspremium.net/StoryView.asp?StoryID=2391589

Otto expanding its horizons
Tuesday, 17 May 2011
Marija Stojkovic

OTTO Energy’s outgoing managing director Paul Moore is set to leave the company on a path to growth with new opportunities in east Africa and material exposure both to a high impact exploration campaign and phase two oil development, offshore Philippines.
Moore, who took up the helm at the Perth-based oil producer in July 2009, has spent the last two years consolidating the company’s portfolio, shedding non-core assets while also building up its current business to lead the company into the next phase of growth and development.

The company has exited Argentina, Italy and Turkey and is also in the process of relinquishing its SC50 permit in the offshore Palawan Basin, Philippines.

Speaking to EnergyNewsPremium Moore said the company had cleaned up its portfolio to focus on core assets including SC55 and SC69 in the offshore Palawan and Visayan Basins, as well as pushing hard on the phase two development for its producing asset, Galoc.

He said the company’s “growth timeline” would begin with the phase two development of Galoc to prolong the existing asset and hopefully grow that business.

“We then have got the onshore exploration in Leyte, which if it works would be really good, and we’ll supplement our onshore portfolio provided we’re successful in our bidding ... negotiations in east Africa.

“So that’s our next horizons ... with the whole company we see being underpinned by this high quality exploration in deepwater in the Philippines.”

Otto recently secured BHP Billiton to farm-in to its SC55 permit after almost a three year journey to secure a farm-in partner for the highly prospective deepwater block in the Philippines.

BHP was the company’s farm-in partner in 2009 before pulling out of negotiations due to market conditions at the time. However the company was lured back to the permit in January 2010 and just last week exercised its option to farm-in for a 60% interest.

Under the farm-in deal, BHP will earn up to 60% interest and assume operatorship of the block by reimbursing Otto’s past costs and funding one offshore deepwater well by 2012.

Otto will retain a 33.18% interest in the block, while BHP will also have an option to drill a second well in a subsequent phase by 2013.

Broker and analyst Hartleys said BHP’s decision to farm-in to SC55 has derisked the potential of the target structures within the permit.

SC55 contains a number of gas and condensate targets with total unrisked potential mean recoverable resources at the Nido carbonate level of 19 trillion cubic feet of gas and 670 million barrels of condensate.

The leading drilling candidate is the Cinco prospect, a Nido carbonate gas/condensate target.
Otto has compared Cinco to Shell’s Malampaya gas field and estimated a mean gross success case recoverable resource of 2.1Tcf of gas and 74MMbbl of condensate.

Malampaya had initial proven reserves of 2.5Tcf of gas and 81MMbbl of condensate.

Hartleys estimates Cinco has a 15% chance of success which results in a risked value of 7 cents per share to Otto based on a net present value of $10 per barrel of oil and 50c per thousand cubic feet gas.

However, the broker said given BHP would likely require an internal probability of success greater than 25%, it believed its success estimate for Cinco was conservative.

A number of other targets on the same trend as Cinco have also been delineated including Uno and Tres. Uno has an estimated mean gross recoverable resource of 850 billion cubic feet of gas and 29MMbbl of condensate while Tres, which requires further work to mature it to prospect status, is estimated to contain mean gross recoverable volumes of 4.4Tcf and 116.MMbbl.

“The on trend targets have been estimated [in the success scenario] to contain an additional 17Tcf of gas and 600MMbbl of condensate,” Hartleys said. “This implies risked potential of 60c per share for OEL and unrisked upside of $4 per share.”

The timing for the first well is yet to be set but the licence obligations require a well to be drilled before August 2012.

Harleys said BHP had a commitment to drill in a nearby permit before the end of the year so a well in SC55 could be drilled sooner as part of a multi-well program.

While it is too early to speculate on whether the exploration program was a success, Moore said there was LNG development potential given the mid-case recoverable resource estimate.

According to the company, a minimum of 4Tcf of gas would be required for a shore-based LNG development while 1.5Tcf of gas would be suitable for a floating LNG development.

Otto begins African Safari

As part of the company’s growth plans, Otto has begun targeting new opportunities within east Africa that offer high quality exploration, development and productions prospects.

Moore said the east African Rift Valley area had received significant market interest and had become an emerging area over the past few years.

“The Rift Valley area has seen significant ... large oil discoveries over the last 10 years ... and so what you’re seeing is the emergence of a new hydrocarbon province of significant scale, and for us, we were looking for an area that was emerging where we could drill onshore or relatively shallow offshore.”

Under an Area of Mutual Interest agreement with private Africa-focused company Swala Energy, Otto has made expressions of interest for permits in Kenya and Burundi with news on that front expected this quarter.

The news from Otto is expected to keep flowing in the coming months with the results from Duhat-1 in SC51 on the island of Leyte, recording of the Lampos 3D seismic survey in SC69 and a decision on the Galoc phase two development due before year end.

With plenty of news flow to come, Hartleys has recommended Otto as a buy with a revised price target of 18c. The broker previously forecast a 12-month price target of 14c.

Shares in Otto have been on a rollercoaster ride this year, dropping from a high of 11c in January to a low of 7.7c in March. Last week its shares shot up to 11.5c on news of the BHP farm-in and yesterday closed at 10.5c.

[jdg]

thanks for that, boysy. a very good read.

-j

[boysy]

latest news from Duhat they have gotten stuck once again but promising gas shows a bit sad we have to read this through the PSE instead of ottos releases to the market. PSE put out a daily drilling report looking like they will have significant problems getting this one to TD.

http://www.pse.com.ph/html/NewsRoom/memos/2011/DA_2011-0035.pdf

[boysy]

And it gets more interesting from the latest report from today it looks like they tried to run wireline logging equipment but failed once again due to mechanical issues

http://www.pse.com.ph/html/NewsRoom/memos/2011/DA_2011-0039.pdf

[shasta]

OEL -3D Seismic acquisition commences in SC69, Offshore Visayas, Philippines

http://stocknessmonster.com/news-item?S=OEL&E=ASX&N=544664

More newsflow & activity for OEL!

[boysy]

Yes and we should hear more about galoc in the coming few months lets hope all parties can afford their share. Wouldnt mind if Otto upped their stake in galoc if the price was good enough looks as though nido will be in a tight spot unless gindara comes good.

[shasta]

Yes and we should hear more about galoc in the coming few months lets hope all parties can afford their share. Wouldnt mind if Otto upped their stake in galoc if the price was good enough looks as though nido will be in a tight spot unless gindara comes good.

OEL - SC69 3D Seismic Completed

http://stocknessmonster.com/news-item?S=OEL&E=ASX&N=546431

Otto will now move to process the newly acquired seismic data. This will take approximately six months, prior to interpretation.

I would have thought 6 months was a bit of a stretch?

Is this the industry norm?

[Rabbi]

Yes and we should hear more about galoc in the coming few months lets hope all parties can afford their share. Wouldnt mind if Otto upped their stake in galoc if the price was good enough looks as though nido will be in a tight spot unless gindara comes good.

...which Otto have done as well as taking over as operator. It should be a good deal as long as they don't have any
problems and also we have Galoc phase 2 on the agenda.
Next big thing is going to be a drill date for one of the huge prospects in SC55 but we will first have to wait for BHP Billiton to arrange a suitable rig.
Definitely renewed interest in Otto as was up on reasonable volume today.

[shasta]

OEL - Phase II development progresses at Galoc Oil Field

http://stocknessmonster.com/news-item?S=OEL&E=ASX&N=555967

Otto Energy Ltd (ASX:OEL) attaches an announcement by the Galoc Production Company (GPC) regarding approval to commence the Front End Engineering and Design (FEED) work and the acquisition of new 3D seismic in support of the planned Phase II development at the Galoc Oil Field (Galoc).

The FEED work will determine the exact locations and number of additional wells to be drilled, expected to commence in 2013. The new 3D seismic will support the placement of Phase II wells in the reservoir and de-risk capital expenditure.

All positive stuff, even if the market has ignored it?

[Corporate]

All positive stuff, even if the market has ignored it?

Maybe now that OEL is the operator they are able to make some progress! Drilling is still a long way off

[Rabbi]

Nothing much will happen with this stock until they commence a drilling programme in SC 55, where they have some huge prospects. At the moment nobody is buying and the stock looks undervalued to its peers.
Good cash flow but not enough to fund development if they have a big find in SC55.
They would have to go to the market when they have already over 1 billion shares on issue.

[shasta]

Nothing much will happen with this stock until they commence a drilling programme in SC 55, where they have some huge prospects. At the moment nobody is buying and the stock looks undervalued to its peers.
Good cash flow but not enough to fund development if they have a big find in SC55.
They would have to go to the market when they have already over 1 billion shares on issue.

End of last quarter Galoc was producing @ ~6,750 bopd

OEL with now 33% equates to ~2,250 bopd (at least 2,000 anyways with natural decline) & the Brent oil price is still strong ~$US115/bbl.

Not many oilers drilling & hitting new discoveries on the ASX (outside of the big boys), so a couple of quarters with the cash rolling, should provide plenty of opportunities sub 9c to accumulate in anticipation of a more active 2012.

With BHP onboard now, the downside really comes with keeping Galoc online, as we know the weather in the area does affect production activities!

[Corporate]

shasta, are you still following OEL?

Its a shame that Paul Moore left, he seemed like a decent operator. I'm looking to enter OEL at some stage but feel there maybe some more downside in Q4 of this year while production is offline.

There's a lot of high impact drilling next year amongst the small oilers (MEO, CUE, OXX, HZN, OEL, etc)

[shasta]

shasta, are you still following OEL?

Its a shame that Paul Moore left, he seemed like a decent operator. I'm looking to enter OEL at some stage but feel there maybe some more downside in Q4 of this year while production is offline.

There's a lot of high impact drilling next year amongst the small oilers (MEO, CUE, OXX, HZN, OEL, etc)

OEL is still my favourite O&G play, ahead of ROC in the mid range producers. Paul Moore leaving isnt too big a deal, i liked Alex Parks before him & he didnt really do much wrong (i think the fact BHP walked away from the initial deal with him at the helm, didnt help his tenure)

Not sure when the typhoon season hits the Phillipines, as that also effects the production uptime.

I like the fact they purchased GPC & have more control over Galoc, the phase 2 project interests me & of course there's the BHP JV.

The inactivity is stagnating the share price & you may well get a cheaper entry later this year, the action starts in 2012!

[Crypto Crude]

I just sat down for abit to go over OEL for the first time in a few years...

I still cant see it in OEL...
it could do ok, but it doesnt have the wow factor...
OEL does have a shot, but Vitol does not pull out on a sound project...

so long as Galoc can maintain a stable profile on oel until they launch their next lead... So that, BHP and other exploration targets provide other upsides...

phase 2 Galoc with the operational downtime impacts the commercial viability of the whole project...

Galoc 2 well lined up, and needed to add to decline...

galoc north inherit with risks but could work...

To sum up Galoc,
It is a grinding project...
OEL will have to increase its reserves to support its current sp in the future...
not ideal...
an oiler like this needs to have protected downside, which OEL does not have...
gL
:cool:
.^sc

[hal]

I just sat down for abit to go over OEL for the first time in a few years...

I still cant see it in OEL...
it could do ok, but it doesnt have the wow factor...
OEL does have a shot, but Vitol does not pull out on a sound project...

so long as Galoc can maintain a stable profile on oel until they launch their next lead... So that, BHP and other exploration targets provide other upsides...

phase 2 Galoc with the operational downtime impacts the commercial viability of the whole project...

Galoc 2 well lined up, and needed to add to decline...

galoc north inherit with risks but could work...



To sum up Galoc,
It is a grinding project...
OEL will have to increase its reserves to support its current sp in the future...
not ideal...
an oiler like this needs to have protected downside, which OEL does not have...
gL
:cool:
.^sc

Shrewd crude

I can't agree with you.

I think they have a few opportunities in the Phillipines and they already have production. There are risks of course but most projects have risk.

Bhp drilling Cinco in 2nd quarter next year should add a lot of interest and of course if it is successful should add a lot of oil or gas to their books.

They also have a new manager which is good to see. He comes from BHP petroleum and has extensive experience.

Good luck

[jdg]

I just sat down for abit to go over OEL for the first time in a few years...

I still cant see it in OEL...
it could do ok, but it doesnt have the wow factor...
OEL does have a shot, but Vitol does not pull out on a sound project...

so long as Galoc can maintain a stable profile on oel until they launch their next lead... So that, BHP and other exploration targets provide other upsides...

phase 2 Galoc with the operational downtime impacts the commercial viability of the whole project...

Galoc 2 well lined up, and needed to add to decline...

galoc north inherit with risks but could work...

To sum up Galoc,
It is a grinding project...
OEL will have to increase its reserves to support its current sp in the future...
not ideal...
an oiler like this needs to have protected downside, which OEL does not have...
gL
:cool:
.^sc

hey sc

always good to get your take on things oil, but i noticed this one and was rather baffled. for my money OEL has the goods and i have been meaning to write a reply. but i've been too busy to put a quality submission together and them presto! somebody at the SMH does it for me. this was published this morning. it sums up my views.

-j

A joint venture with Otto Energy in the Palawan Basin may be worth every cent.

DESPITE its $US20 billion ($A20.6 billion) push into the ''unconventional'' shale gas business in the US, BHP Billiton remains committed as ever to the conventional world of oil and gas exploration in offshore fairways.

It is spending a record amount around the world looking for the sort of big oil and gasfields that you would expect a company of BHP's size to focus on. But today's interest is its work in the Palawan Basin offshore from the Philippines/Malaysia.

Advertisement: Story continues below More particularly, its farm-in on a Palawan permit (SC55) offshore from the Philippines held by Perth's Otto Energy (ASX: OEL).

Otto is no stranger to the offshore oil and gas potential of the Palawan as it is operator of the producing Galoc oilfield, which produced 595,423 barrels of oil in the September quarter (196,490 barrels net to Otto based on its increased interest of 33 per cent).

Take a look at any analyst reports on Otto and you will see that the Galoc interest pretty much covers Otto's current market capitalisation of $92 million at Friday's closing price of 8¢ a share. It is also holding some $28 million in cash, much of which will be applied to a second-phase development of the Galoc field.

So anything else Otto has comes for free, including the joint venture with BHP in SC55. BHP's involvement tells you that success in SC55 could be a game-changer for Otto. The targets in the permit are meaningful for BHP, let alone for a company of Otto's size.

SC55 sits in the south-west region of the Palawan and has proven oil and gas finds sitting to the north and south along what is considered to be an emerging 1000-kilometre long deepwater oil and gas trend. Total (unrisked) potential means recoverable resources across a number of prospects in SC55 have been estimated at 19 trillion cubic feet of gas and 670 million barrels of condensate (light oil).

BHP can earn a 60 per cent interest in the permit by carrying the cost of drilling two wells, with a commitment to drilling at least one. Otto's interest in the permit gets reduced to 33.18 per cent (the remainder is held by Trans-Asia Oil).

More to the point is that Otto reckons the first target - the curiously named Cinco - is good to go in April 2012. The estimated recoverable resource there alone is 74 million barrels of condensate and 2.1 trillion cubic feet of gas.

We're talking about a significant commitment here by BHP. The cost of the first well could be as much as $US60 million. Worth every cent if it comes in and not the end of the story if it does not, given the other targets in SC55.

The broker Hartleys reckons Cinco has a risked value of $89 million (15 per cent probability of success) and an unrisked value of $594 million. Again, that's all very interesting when stacked up against Otto's current market value. Little wonder then that Hartleys rates Otto as a ''conviction buy'' with a share price target of 18¢ a share.

''We consider the ideal to buy in the oil and gas sector is six months before the drilling of a high impact well,'' Hartleys said in a recent note. Cinco certainly has high impact potential for Otto.

As an aside, it is worth noting that Otto has a new chief executive officer - Gregor McNab.

Funny thing is that McNab comes to Otto after 22 years with BHP's now Houston-based oil and gas division, most recently as its vice-president external affairs.

Before that he had stints in Perth as the division's general manager of negotiations and general manager of its North West Shelf interests. As enthusiastic about Otto's interests in the Philippines as he is, McNab is looking to expand Otto's footprint elsewhere in south-east Asia and (onshore) east Africa.

XXXXXX

i think this stock is a low risk proposition given current galoc production and upside, but the drill in SC55, if successful, will ensure a very big multi bagger. i've stocked up on this for a good old fashion gamble on the drill bit.

i trust everybody is well.

-j

[ELYOB]

More research needed here . You will find OEL are changing right now in the run-up to April'12 drilling with BHPP. The FPSO has now been disconnected , and holidaying in Singapore ....why = reliability, future Galoc performance. 2P reserves remaining on current 2 wells now 15mmbbloe ; and the Phase 2 is expected to increase this by 4-6??? so wait ? OEL expect the current 6800 gross mmbblopd to increase >12,000 with Phase 2????? If Phase 2 is good , OEL will have longlife at Galoc even with decline issues . The GALOC field is first class , it was the FPSO that has been the big problem all along with poor performance . NOW , this is being FIXED in Singapore .....tick tick.

In time OEL could be a target of BHPP ....

[shasta]

I just sat down for abit to go over OEL for the first time in a few years...

I still cant see it in OEL...
it could do ok, but it doesnt have the wow factor...
OEL does have a shot, but Vitol does not pull out on a sound project...

so long as Galoc can maintain a stable profile on oel until they launch their next lead... So that, BHP and other exploration targets provide other upsides...

phase 2 Galoc with the operational downtime impacts the commercial viability of the whole project...

Galoc 2 well lined up, and needed to add to decline...

galoc north inherit with risks but could work...

To sum up Galoc,
It is a grinding project...
OEL will have to increase its reserves to support its current sp in the future...
not ideal...
an oiler like this needs to have protected downside, which OEL does not have...
gL
:cool:
.^sc

Certainly not the most exciting or leveraged oil producer around thats for sure, but no debt, & getting a small discount to the Brent price is keeping things ticking over.

Galoc & Galoc phase two are the main drivers, & the BHP deal is the potential company maker

Theres always the possibility of a left field ann with them buying into an established field in the Phillipines, especially with NDO & KIK in the region.

[jdg]

Certainly not the most exciting or leveraged oil producer around thats for sure, but no debt, & getting a small discount to the Brent price is keeping things ticking over.

sure, but with cinco worth 50c if it comes in, that's a pretty big addition to the current sp of below 9c. furthermore, if cinco did come in it would presumable derisk other parts of sc55 and give greater value to the acerage. given the downside appears very well protected by galoc, it's as good a punt as you will find anywhere, in my view.

-j

ps i've only just clicked that the drill names in sc55 (barring hawkeye) are spanish numerics...

[Rabbi]

sure, but with cinco worth 50c if it comes in, that's a pretty big addition to the current sp of below 9c. furthermore, if cinco did come in it would presumable derisk other parts of sc55 and give greater value to the acerage. given the downside appears very well protected by galoc, it's as good a punt as you will find anywhere, in my view.

-j

ps i've only just clicked that the drill names in sc55 (barring hawkeye) are spanish numerics...

Looks like the smart money is starting to buy into the cinco drill already. Any retrace and I'll top up as this is as good an exploration play as you are going to get. Whether you hold through the drill is up to your tolerance for risk. Anything can go wrong and usually does but this huge gas prospect is a real company maker if it comes in.
Thrill and drill at it's best.:)

[shasta]

OEL - OTTO ENERGY EXECUTES FINAL FARM‐IN AGREEMENTS FOR SC55

Otto Energy Ltd (ASX:OEL) is pleased to announce that it has executed the final farm‐in agreements supporting BHP Billiton's earlier decision to enter into Service Contract 55, Offshore Palawan, Philippines.

The execution of the final documents follows the previously announced decision by BHP Billiton to exercise their farm‐in option in May 2011. With the execution of these final farm‐in agreements, Otto will receive a final payment relating to back costs associated with SC55 of US$7.3m, of which $5.0m has already been received.

Full announcement:
http://stocknessmonster.com/news-item?S=OEL&E=ASX&N=572900

[Crypto Crude]

very valid points everyone...

How to approach OEL with coin is up to the investor////a lot depends on which investment route one takes...
The investment vehicle is either to trade Cinco, or invest through it...
upside would probably trade it away, I would probably invest through...
and who profits more from this... The upside type of investor...

the predicted share price will run higher leading into Cinco...

with the hit and miss nature of this well (15% chance of success) ...I need not say more...
there are no 18 cent valuations on this... its either <8c or >50c...
how do you get a Hartleys valuation of 18c when its 1 or the other...?


in that report posted by JDG, it said OEL have 28million in cash.. that of which is being pumped back into phase 2... so basically everything OEL have worked towards so far with galoc has, or is going to be spent up...

Hope the well hits... and its up to the holder... I personally like the idea of running profits by being in early, and risking lead up (un-booked profits) for something much bigger

There is no doubt that OEL will need to add reserves and projects somewhere...

oel is far from a dumb investment...
Im not even saying that, just that it needs to get discovery lucky for growth, or PPP it up...
called that too...


early days and a 50cent targets.. why not...
Just have to be bearish on this sort of well, but excited on the inside...

if I were the diversified type of guy I might look alittle closer...
lastly,
have a good new years...
:cool:
.^sc

[shasta]

Shrewdie

OEL is really a medium sized oil producer (around 2000bopd net) thats gets the Brent price less a small discount (around 5% i believe) with a concentrated focus in the Phillipines, the weather has affected Galoc many times, & there were been plenty of problems with the initial commissioning etc, no different to many other 1st time producers, but that was with other operators, now Galoc is under OEL control.

You may be interested in a BESBS style trade with OEL on the BHP drill, thats the only "excitement" within OEL at present.

I want to see OEL proceed with the Galoc phase 2 project, thats where i see some value in OEL.

Have been looking into another O&G producer, given OEL is purely oil at this point, with no unconventional gas exposure.

Thinking either STO or maybe ROC, but would love to hear others thoughts, producers only however.

[Corporate]

Shasta, for producers you could try looking at Mad or Bru

[Rabbi]

Shasta, for producers you could try looking at Mad or Bru

Those two are interesting picks with potentially huge upside but they both haven't been derisked as yet. MAD (maverick) has what looks like large reserves but has been having problems increasing production as wells have very small output. So the risk is whether they can increase production.
BRU (Buru )on the other hand look like they have a large Oil find at Ungani but the size of the field could be anything between .5m barrels or in the upper case 20m barrels. They have a partner in Mitsubishi and probably have the largest shale gas acreage in the Canning Basin. NSE (New Standard Energy) is not far behind in Shale gas acreage but is not a producer. The risk with BRU is that the Ungani field is not as large as they think it is.

For unconventional and shale gas exposure my pick would be BPT (Beach) with great underlying cash flow from their Cooper Basin Oil and significant shale and unconventional acreage in the Cooper Basin. SXY (Senex) is another Cooper Basin shale play I favour along with DLS (Drillsearch) who already have a farmin partner.

AWE (Australian Worldwide) has large unconventional holdings in the Perth Basin and look cheap on any metrics. They just paid out a special dividend, so are cashed up and are ready to move forward after a disastrous drilling campaign in the Taranaki Basin in 2010.
Sorry about rambling on the OEL thread. OEL thread title sums it up. Elephant hunting in the Phillipines with BHP Billiton makes it a gambling stock if you want to invest for the upcoming drill this year..

Disc: Hold BRU BPT SXY

[hal]

Rabbi
I think that OEL is not so much a gambling stock because it has the back up of Galoc production. It could have big upside if the sc55 block finds oil/gas. They have a very experienced new manager and they have a lot of other areas of interest in their Philipines blocks.

They are also looking to expand into East Africa and with the management they have it won't be do on a whim.

By the way Buru's Ungani 2 found oil as well and it looks like it is a deeper pool than Ungani1. The ceo has indicated they have at least the top end of your range.

It could be a very exciting year for the oilers but we will have to wait and see(with the markets the way they are).

[Crypto Crude]

It will be a great year if Cinco strikes...
It will be a boring year if Cinco does not...

putting aside This,

there is Galoc,
...
what value has Galoc added over the years??? when share price dropped from 25c to 9c...
needs phase 2, just to replace decline of phase 1...
drilling to stay still?

Its time?


its been 7 years of the same old, and dumb moves in turkey and International portfolio etc...
Africa, does it look like more dumbars'e mistakes...
does it look more of old..
So, I wont even said it in full, but-->prolly...


Could be something, just been always cautious of this one... Like what bermuda said about CTP...
Could be something in it, but not one for me...
and heres why !
:cool:
.^sc

[Crypto Crude]

over time,
things do/can change...

So a new year brings on new challenges...
A new challenge to reel in a beast...
hope it works...
:cool:
.^sc

[gazprom1]

I am in for a few....free cashflow so downside risk is hedged. Upside is SC55 and phase II....almost a no brainer and I am a few bips to the upside already so no worries.

All the best to holders - going to be an interesting ride for a while.

Gaz

[Crypto Crude]

gazprom,
are you just BESBS play?
:cool:
.^sc

[shasta]

Those two are interesting picks with potentially huge upside but they both haven't been derisked as yet. MAD (maverick) has what looks like large reserves but has been having problems increasing production as wells have very small output. So the risk is whether they can increase production.
BRU (Buru )on the other hand look like they have a large Oil find at Ungani but the size of the field could be anything between .5m barrels or in the upper case 20m barrels. They have a partner in Mitsubishi and probably have the largest shale gas acreage in the Canning Basin. NSE (New Standard Energy) is not far behind in Shale gas acreage but is not a producer. The risk with BRU is that the Ungani field is not as large as they think it is.

For unconventional and shale gas exposure my pick would be BPT (Beach) with great underlying cash flow from their Cooper Basin Oil and significant shale and unconventional acreage in the Cooper Basin. SXY (Senex) is another Cooper Basin shale play I favour along with DLS (Drillsearch) who already have a farmin partner.

AWE (Australian Worldwide) has large unconventional holdings in the Perth Basin and look cheap on any metrics. They just paid out a special dividend, so are cashed up and are ready to move forward after a disastrous drilling campaign in the Taranaki Basin in 2010.
Sorry about rambling on the OEL thread. OEL thread title sums it up. Elephant hunting in the Phillipines with BHP Billiton makes it a gambling stock if you want to invest for the upcoming drill this year..

Disc: Hold BRU BPT SXY

Cheers for that, i've previously held both BPT & SXY (in its former life as VPE), but cant say i've revisited them of late

Been casting my eye over WCL & had a look at NSE, after seeing Corporate was keen on it.

Will have a dig into BRU...

[gazprom1]

gazprom,
are you just BESBS play?
:cool:
.^sc

SC,

Yeah in all probability that will be the way it goes....could be $$$$s to be made in the next few weeks.

The markets are difficult to say the least but I have been buying a few stocks the past 4 weeks. Mainly trying to buy stocks with perceived limited downside risks (free cashflow, low or no debt, no need to come to mkt to raise capital, etc) where SP has been beaten up because the overall mkt has been hammered not because of co or sector problems.

Gaz

[shasta]

OEL - CLARIFICATION ON COMMENTS IN RELEASE BY BIOPROSPECT LIMITED

http://stocknessmonster.com/news-item?S=OEL&E=ASX&N=574410

You would think BPO are getting close to receiving litigation by OEL, if they continue to make misleading statements!

2nd ann out today - UPDATE ON SERVICE CONTRACT 55 DRILLING PREPARATIONS

http://stocknessmonster.com/news-item?S=OEL&E=ASX&N=574413

Otto Energy Ltd (ASX:OEL) advises that it has received confirmation from farm-in partner, BHP Billiton, that it has issued a termination notice for the Transocean Deepwater Expedition rig due to the rig not passing key acceptance tests.

BHP Billiton has advised that it is progressing preparations to commence drilling the Cinco well and will provide an update on rig status when available.

Service Contract 55 is currently in Sub-Phase 4 which requires the drilling of the Cinco-1 deepwater well by 5 August 2012. Otto advises that at this point the date for commencement of drilling of the Cinco well is yet to be confirmed and will continue to update shareholders as information becomes available.

Market doesn't like this "uncertainty", & OEL dropped from 9.6c to 8.8c on modest volume

I'm fairly confident that the date/terms for drilling could be extended, but the risk is that BHP walks away

[jdg]

here's another confirmation of what i really like about OEL. the BHP/rig problem made me curse more than a little (in fact i think i invented several new swear words), but the story remains the same. this is hands-down my favorite stock. i am a little surprise that it's not more highly favoured by follk here. in fact, even on that other site, which isn't shy of rampers, it is a little discussed company. oh well, i'm in boots and all.
this is with thanks to cara who posted it on that other site.


OTTO ENERGY LTD
Downside Limited, Upside Unlimited
Otto Energy Limited (“Otto”, “OEL”, “Company”) had another good quarter in
terms of cashflow. The Company generated $10.4m in cash for the quarter,
finishing 2011 with $38.7m in cash.
Galoc – focussed on extending production
We visited the FPSO while it was in dry dock in the Keppel shipyards in
Singapore undergoing the turret installation. The turret installation has been
designed to allow the FPSO to remain in field in most weather conditions
which improves production consistency and should allow Otto to seek
finance options for further expansion of the field. Expansion could come
from additional wells in the Galoc field, drilling of the Galoc North prospect
and/or tying in stranded fields. Expanding the Galoc field will go further to
underpin Otto’s operations and cashflow while it explores its other assets.
Production for the quarter was just 104,931 net barrels (196,490 net barrels
in the September quarter) as a result of the FPSO being taken out of field.
Given the progress to date, we would expect that Phase II FID will be a
matter of course. Otto expects Phase II to add at least 3mmbbl to 2P
reserves but the conversion of current 2C resource could see 4.5mmbbl of
2P reserves.
Exploration upside is enormous
We have a valuation for Otto of 27cps. Of this value, 9cps is made up of
cash (3cps) and Galoc (6cps). The remainder of our valuation is exploration
of 19cps (less admin costs).
Our exploration value of 19cps is based on the general metric of an
NPV/unit multiple applied to prospective recoverable resource. This value is
then risked to reflect a probability of success. We have only included the
two most mature targets in SC55 (Cinco – 2.1Tcf and 74mmbbls, Hawkeye -
~200mmbbl) and the SC69 prospective resource (~290mmbbls) in our
exploration value.
We have a risked value of 7cps for the Cinco prospect. The potential upside
if the well is successful is an unrisked 50cps. However, a successful well
would de-risk (to a certain extent) the other prospects on the permit which
have a risked value of 47cps and an unrisked value of 468cps. None of
which is currently included in our valuation or price target.
Buy – strong foundation with significant upside
Otto is in a unique position where it has a strong production and cash
position that underpins its share price but also has significant leverage to
exploration success.
Our price target of $0.18 is a pre-spud price target. Success at Cinco could
add $0.43 based on the Cinco prospect and another $0.47 if the other
prospects on SC55 are re-rated. This is a potential $1 share price if Cinco
is successful but with the bonus of limited downside because the current
share price of $0.10 is underpinned by cash and production.

[drillfix]

Hi jdg,

Yes its been a while since I have been in OEL, in fact, quite a while back I was in at 30c something in the day for a while.

Another fella I know also tells me about Otto, but having it seen it drop and drop and drop, the stock seems to have a break and then it gets hammered back down again.

I have also traded a couple of times but at present, the daily EMA line up is good and has strong RSI and money flow moving upward.

Just wondering how long it will remain like this for, as in, Otto seem to be doing plenty but it always seems there is something that is going to happen and what I dont understand is What is Actually Happening right now?

Sorry for such stupid questions but I dont follow the story no longer but skim through stuff.

[gazprom1]

Hi jdg,

I am with you jdg in believing OEL is a great investment. I have been hoping to buy some more around that 9 cent level but buyers always step in around 9.3 cents. Now they have upped their percentage in Galoc and are now the operator, it is all good for them. They are going to chew through that cash pile in the current quarter as Galoc will remain offline and they are spending cash.

DF - what is happenning? Well, we are waiting for confirmation from BHP of the rig to drill Cinco (time is tight) - SP should IMHO jump on positive news. Phase II of Galoc and Galoc North should all progress forward during the remainder of this year. The FPSO is due back at the field at the end of the quarter from memory so production will come back online.

Exciting times ahead I hope.

Gaz

[jdg]

hey drilly,

the three key short term events are these:

1. SC69 data interpretation - (hopefully a farm in?)
2. Phase II Galoc FID - to my mind, cash, galoc reserves and galoc phase II is more than enough to justify the current sp (in fact, perhaps more so). this isn't just my thinking (see evaluation above...).
3. Here's the biggie - the drilling of Cinco. a very big prospect that BHP is funding. it was scheduled for april, but a rig dispute appears to have scuttled that. contractually it needs to be done before august - so not too long to wait. if that comes in, we all make a lot of money. also, BHP will certainly drill Hawkeye, at which point we're into lotto numbers. (BHP may drill Hawkeye, even if Cinco comes up with nothing - they have a two drill option.).

rig availability, the possibility of SC69 seismic not showing any goodies, and Galoc being shut in for longer than expected are possible events that may lead to downward sp pressure - but overall i see so little downside and a mountain (a big mountain at that) of upside. what more could one ask for in a stock?

OEL has had its problems, and it is a little unloved (although the top 20 holders have around 70% of shares on issue, from memory) and it has flown well and truly under teh radar. that, in my view, has what has led to such a great buying opportunity.

shasta may be able to add more to this. he's on-to-it with everything OEL.

-j

[drillfix]

Cheers both Gaz and Jdg,

And yep, I know Shasta has had his finger on the pulse with this one for quite some time.

Interesting stuff although the thing that kinda gets me with many stocks is the holding exposure, which I seem to find very had to do in these type of markets, which in many ways makes me miss the boat with alot of stocks that end up running.

Will certainly consider taking a position though I currently have nervous feet atm with stocks in general.

Have this on my watchlist anyway so I will either be back to cheer you on or to tell you that I got a little parcel :P

[jdg]

i have no nerves about this one at all, drilly, but we're all different in this regard. best of luck with whatever you do, mate.

Gaz, i didn't see your post as i must have been typing mine when you posted it. pleased you're of the same mind as me. with luck - and it will take a good swig of luck - we will have a cracking run this year.

-j

[shasta]

hey drilly,

the three key short term events are these:

1. SC69 data interpretation - (hopefully a farm in?)
2. Phase II Galoc FID - for mine, cash, galoc reserves and galoc phase II is more than enough to justify the current sp (in fact, perhaps more so). this isn't just my thinking (see evaluation above...).
3. Here's the biggie - the drilling of Cinco. a very big prospect that BHP is funding. it was scheduled for april, but a rig dispute appears to have scuttled that. contractually it needs to be done before august - so not too long to wait. if that comes in, we all make a lot of money. also, BHP will certainly drill Hawkeye, at which point we're into lotto numbers. (BHP may drill Hawkeye, even if Cinco comes up with nothing - they have a two drill option.).

rig availability, the possibility of SC69 seismic not showing any goodies, and Galoc being shut in for longer than expected are possible events that may led to downward sp pressure - but overall i see so little downside and a mountain (a big mountain at that) of upside. what more could one ask for in a stock?

OEL has had its problems, and it is a little unloved (although the top 20 holders have around 70% of shares on issue, from memory) and it has flown well and truly under teh radar. that, in my view, has what has led to such a great buying opportunity.

shasta may be able to add more to this. he's on-to-it with everything OEL.

-j

You summed it up pretty much, nothing more for me to add really.

Nice close at 10c today.

I'm just happy OEL have control over Galoc now, especially with phase 2 on the horizon.

The Brent oil price is still pretty strong, not sure why TV3 constantly use the Nymex price, wee bit misleading, but OEL definitely get the Brent price (less a small discount, i believe around 5%)

Traders will likely wait for the BHP drill, not that much excitement factor in the meantime

[gazprom1]

Hey jdg,

Lots of demand on the open today....very happy to be holding. BHP drill news would be a rocket!!!

Gaz

[jdg]

Hey jdg,

BHP drill news would be a rocket!!!

Gaz

couldn't agree more. i was very disappointed when BHP ditched the rig (although good on them if they had safety or environmental concerns). let's just hope they can get another one sorted quickly. that drill is a very big value point.

-j

[jdg]

we should get word on Galoc reconnection in the next month. and with PoO firming i think we'll get a litle bounce, particularly if it happens next week, as i think the market enjoys it when projects come in a little early.

but in the medium term the sp is driven by rig availability regarding sc55. that really is a big issue, and one i'd like an update on. i'd hate for us to have to apply for a timeframe extension (again). i'm hoping bhp have the wherewithal to get something sorted out smartly. any good news here and we're off.

i've personally decided to hold right through to a result at Cinco. often i lighten my position around spud. but i've decided to keep all of my chips on the table this time.

-j

[jdg]

very good volume to start the week. the sp hasn't budged from 10.5c for days now. it would be great to see a close above that. again, news on galoc reconnection isn't too far away. it will be great to get the oil pumping again.

-j

[trackers]

Looking good jdg (and Gaz), patience rewarding you there.. I entered at 10c a couple weeks ago so off to a good start!

[gazprom1]

Hey Trackers,

How are you getting on? Long time since we had a chat. Well done on your timing into OEL. Nice rise so far today.....as jdg stated if we can get Galoc reconnected sooner than expected that would be good news and if we get some positive announcement from BHP re Cinco we should see the SP lift further. However, if BHP cannot secure a rig in time the SP will be back to 9 cents in the blink of an eye!!!

Hope you are making money!!!

Gaz

[jdg]

very big volumes now, let's hope someone knows something that we don't. still, this stock so tightly held, that if anybody wants in in a big way then it will have to spike the sp.
i really do like the look of OEL. i'm very overweight on this one.

-j

[trackers]

Hey Gaz,

Good to hear from you.. Not doing all that well to be honest, put my faith in small cap goldies over the last year and they've been a perennial disappoint to be honest! I haven't lost money though, I've been saved by small investments in other companies (NWE, DGR, OEL etc).

I like precious metal companies because they're so easy to figure out (as opposed to oil/gas) but oil/gas is where the moneys been going lately... Hope you're doing well? - Still farming?

Hopefully BHP pulls finger and get something sorted for SC55...

[trackers]

very big volumes now, let's hope someone knows something that we don't. still, this stock so tightly held, that if anybody wants in in a big way then it will have to spike the sp.
i really do like the look of OEL. i'm very overweight on this one.

-j

Highest volume since December and markets only been open 2 hours. First jump to 11.5c on the course of trades showed clear accumulation..

There's only half as much on the sell side left as has been traded today (not that it ever really works out like that)

[jdg]

it's looking strong today, and so far we're holding yesterday's gains easily. depth looks great.

-j

[jdg]

nice release by NDO. according to their people our reserves are bigger than we thought. makes the deal buying a greater chunk of Galoc look better and better. particularly with the PoO on the rise.

-j

[jdg]

this with thanks to cara from that other site.

PETROLEUM OPERATIONS UPDATE
(As of February 24, 2012)


The Philodrill Corporation is pleased to announce the major developments on the on-going upgrade of the mooring and riser system for the Galoc Field’s FPSO “Rubicon Intrepid”.

The installation of the new turret facility to the FPSO has been completed at the Keppel Shipyard and docks in Singapore early this week. All other works related to the turret project have been completed and/or are nearing completion. The FPSO has been released to the sea for the installation of additional equipment and is expected to depart Singapore anytime this week back to the Galoc Field site offshore Palawan. Already, support and service vessels have been contracted and mobilized to assist in the re-connection of the FPSO to the newly-installed mooring system of chains and anchors at the site. Barring any untoward operational glitch, the field operator Galoc Production Company (GPC) expects to resume production from the Galoc Field by mid-March 2012. (click here to see photos of the project works)

The upgrade of the existing mooring and riser system is expected to substantially increase the reliability and uptime of the FPSO and is a crucial component of infrastructure to enable GPC and its partners to move ahead with the Galoc Phase II development program. GPC has commenced pre-planning activities for the further development of the field with a decision on Phase II due to be made around mid-2012.

[jdg]

sorry, posted that twice - just deleted the second.

[soulman]

Just consolidating before a surge up I think jdg. I have taken a position on OEL.

The volume are very encouraging and so is the buyers support and buyers demand. Everything to like about the TA and FA of OEL.

[gazprom1]

Genius SM...well done!! Nice rise again today. Happy to be riding the wave. Solid support and decent volume. Hopes it closes where it is!!!!

Gaz

[drillfix]

Way to go people, a real party happening here by the looks of things.

More than double the volume going through here, so one wonders if there is a leak (oil leak perhaps..lol)?

Missed the boat on this and a little nervous about buying a Friday 52 week high as well :P

[soulman]

Thanks Gaz...well done to all of us. Looks like a strong close as I type.

[jdg]

Genius SM...well done!!

couldn't agree more!

-j

[trackers]

Very nice...

[Rabbi]

This rise is on news of reserves upgrade to Galoc field and the fact the Mooring system upgrade has been completed.

When BHP billiton secure a rig for SC55 Drill I see even more upside

OEL is now a Spec buy on big gas and condensate in this field.
Between confirmation of securing the rig and drilling expect some volatility.
Exploration plays don't come better than this.

[hal]

Well done Soulman. Great call.

This stock appears to have a lot going for it , not just a trade.

They have multiple targets in the Phillipines with production from Galoc and also the real bonus of BHP drilling a couple of wells for them this year hopefully.

They also now have an African future with the granting of the Tanzanian acreage.

[jdg]

i guess we have a couple of bits of news ahead, specifically Galoc reconnection and a rig for Cinco - the latter being particularly important.

but we have a real dark horse in SC69. i'd love to think that both Lampos targets have jumped off that 3D seismic. news of a successful farm in there would be gold. (likewise if BHP were to commit to the second well before drilling Cinco).

-j

[soulman]

Thanks fellows. Just part and parcel of seeing the market everyday. You can spot these accumulation and increasing volume where buyers overtake sellers consistently everyday.

Last time I check OEL does have around $38 mil in cash.

[jdg]

how about a little test of these predictive powers, soulman? where to from here do you think? i only do TA in the most basic way, but fundamentally i think consolidation around these levels, perhaps even a wee pullback, until we get news. what say you, mate?

-j

[soulman]

My prediction is if it can go 15.5 on Monday, then 17.5 could be MAX before a breather. 9 mil volume is significant to these accumulation.

But hey, I am no nostradamus. Also, I can only tell by watching and observe it daily.

[soulman]

Sellers coming in jdg. I am looking to offload a few at 13.5 for safe play.

[jdg]

i thought she held up well. either way, i'm not too concerned, i'm holding through Cinco.

-j

[CMo]

deleted - deleted

[gazprom1]

Demand strong today on no news...perhaps something in the wind or just the expectation of the re-connection of the FPSO. Up 7.7% as I write. SM - are you still with us???

Gaz

[soulman]

Yes Gaz, but only today. Had an order in for 13 for the last few days that got filled this morning and just add more at 14. Does look good chart wise and FA. Lucky break for me as I sold all at 13.5 last week.

OEL is producing oil and with oil price soaring could be a catalyst for the move on. Although all other producers are struggling today with PPP, COE and the major WPL all under water.

You still in Gaz?

[gazprom1]

Yes I am...but I am buy and hold. I have been in for a while (5-6 months) at an average of just over 8 cents. 14.5 cents now so great return. I would normally be looking to exit to lock in a decent profit but with POO, potential Galoc Phase II and SC55 drill slot possibility I am going to hold on a bit longer.

I see you posted on the MEO thread - Had an excellent entry into MEO couple of weeks back (thanks to Corporate) and it is up nice. I like their potential and I added more last week. Represents 15% of portfolio now.Could be an interesting ride with that until year end if global markets dont blow up.

Gaz

[gazprom1]

Just touched a 40 month high of 15 cents - well done on entry today SM!!!!=)

Gaz

[soulman]

Thanks Gaz. Luck more than anything with the 13 cents entry today.

Big volume today and looks like closing at the days high.

Well done for holding on Gaz.

[jdg]

where is the reconnection of the FPSO? i hope there are no undue problems.
although my real concern is Cinco drilling. a delay here (which is perhaps looking likely) will see the sp pullback. in the past i haven't been too concerned about pullbacks as i've been wanting to buy a few more. but i well and truly have my fill now and i'm wanting a nicely orderly rise thank you very much.
OEL is due a bit of luck. i'm hoping that comes in the form of a big discovery at cinco. whatever happens between then and now, all will be forgiven and forgotten.
in the meantime we may well have a few bumps.

-j

[gazprom1]

Bought just over 138,000 shares at 9.7 cents this afternoon - still bidding for a few more. Have a bid for more lower. I am catching that falling sword....downside IMHO is around 20% from here. Upside, who knows.

Small caps hammered again today...no respite in sight.

Interesting arbitrage with the PAN off market bid for MMW at 7 to 1 with MMW hitting 10 cents and PAn at 91 cents. Risk is when is allotment as PAN is melting under the heat!!!=)

Gazprom

[soulman]

Gaz, seems to be rolling the old dice here. I am still in OEL but looking to offload instead of buying more. Now on 50/50 cash/equities ratio.

Just took a $2.26 net profits on MCR....One of my best win for a while....Just kiddings....The heat is definitely here from now on.

[gazprom1]

Hey SM,

I am very comfortable with buying down the curve with OEL - love that old chesnut...it is just time if you buy a stock that is self funding and has cash in the bank. Problem comes with stocks that are trying to get into production and have their SP spanked. Can't raise capital and cannot continue to explore, etc.

I am not a chartist but 7 cents looks like it could be a worst case bottom. OEL has a bigger stake in GALOC now and the FPSO has been altered for better uptime.

[ELYOB]

The trouble is the Philippines never seems to get anything done . Companies on the ground here are all stalled . Not hot on the world patch . BHPP will take their time , and one now has to see what the huge internal review next month comes up with in BHPP . The Philippines may well get canned ! Then where will OEL be .....

[gazprom1]

Agree that BHPP's farm-in to SC55 is up in the air. I believe that part/most of that uncertainty has been priced in...maybe 10/20% downside risk from SC55 not being extended.

However, OEL is netting more than 2000bopd from GALOC. Forecast expenses this quarter are $9.1 million. Revenue will be around $20 million for the current quarter. The FID is coming up re GALOC Phase II and also potentially GALOC North at the end of this quarter. $30 million in the bank and another $10 million by end of June. $40 million in bank with current Mkt Cap of $110 million with $8-10 million net to them every quarter.

While the SP may head lower with general market conditions, OEL can weather any storm with its cash in bamk and ongoing free cashflow. Will continue buying if price softens.

Gazprom

[gazprom1]

Ann y'day that SC55 has been extended for 12 months (BHPP had requested an 18 month extension). Thought that OEL SP may have reacted more strongly than it did (up 2.2% for the day).

Cautiously buying at these levels. Should get the FID re Galoc II by end of June and I believe that the 6 month financials will show a strong quarter and good profitability wit a large cash pile.

Gaz

[shasta]

Ann y'day that SC55 has been extended for 12 months (BHPP had requested an 18 month extension). Thought that OEL SP may have reacted more strongly than it did (up 2.2% for the day).

Cautiously buying at these levels. Should get the FID re Galoc II by end of June and I believe that the 6 month financials will show a strong quarter and good profitability wit a large cash pile.

Gaz

I think it was a given the service contract would be extended & therefore the market pretty much expected it.

Roll on Galoc phase 2 FID!

[gazprom1]

I think it was a given the service contract would be extended & therefore the market pretty much expected it.

Roll on Galoc phase 2 FID!

Hey Shasta,

You are probably right...although the SP is up another 2.2% on top of the corresponding rise on friday. Happy that I have more than I used to. Could be 10 again this week if the markets remain calm.

Gaz

[gazprom1]

Sucked up a few more at 9.3 this afternoon....may hold off for a while now as seems to be downward pressure on the SP and no imminent news expected.

Gaz

[Corporate]

Nice to see a little bit of emphasis in the OEL buying today. I managed to pick up a bunch at 8.2c. Roll on the deep water rig and Galoc phase 2 FID!

[jdg]

hey Corporate, i've bought two more parcels recently too. it all comes down to BHP securing a damn rig. it can't be too far away, surely. the lack of certainty around the drilling SC55 is what's keeping the price so low. i'm picking a 40-50% bounce on that news alone.

-j

[jdg]

three drills next year - if they all happen - should make for an interesting 2013.
here's the latest report if anybody's interested.

http://www.ottoenergy.com/IRM/Company/ShowPage.aspx/PDFs/1822-28355666/CasimirCapitalLtd

-j

[gazprom1]

three drills next year - if they all happen - should make for an interesting 2013.
here's the latest report if anybody's interested.

http://www.ottoenergy.com/IRM/Company/ShowPage.aspx/PDFs/1822-28355666/CasimirCapitalLtd

-j

Thanks jdg. Will read it with interest. Have built up a reasonable holding. POO should be helping OEL.

Gaz

[ELYOB]

I note that Shell has brought a rig all the way from Brazil* this month . OMV has been hunting a rig for a while now and cant get one . BHPP doesnt seem to be able to flick the fingers and get one either .

* piggybacked on special ship. Currently in Cape Town enroute

[gazprom1]

ELYOB,

I see trading halt in place...re SC51 and transactions around Galoc. I am assuming it will be FID re Galoc Phase II and timing of Duhat 2.

Any thoughts?

Gaz

[Rabbi]

Galoc phase 2 has production at 12,000 barrels a day.

Beautiful cashflow for OEL to go elephant hunting in Tanzania.....

but really they need a rig for SC55, and well worth a punt that BHP can secure one.

[jdg]

i saw the TH yesterday and i immediately thought it was BHP had secured a rig... my celebrations were short lived. still, the FID is an important milestone. we do, however, need to find around $30m to fund it. i assume this ann will say how we are coming up with that.

i will be interested to see if this news lifts the sp. i can't help but think that we need that damn rig to get anywhere. i know the market is tight, but i don't know how tight - or just how keen BHP are to drill it (the cost benefit ratio).

i'm betting big that we will get one. but that's definitely a punt, rather than a belief based on sound knowledge. i feel pretty secure because i can't see too much - if any - downside from here given the Galoc asset

-j.

[Corporate]

jdg, Otto is a great bet. Management a slowly but sure kicking goals and Galoc is proving to be a very good field. Glad Otto is funding the debt through cash flow, cash on hand and debt. Rather than raising equity or selling down a share of Galoc.

Bring on BHP.

[gazprom1]

SP has spiked since FID on Galoc Phase II. Up nearly 10% today and around 25% since announcement. Would catch fire if we had a positive announcement from BHP re contracting a rig.

Gaz

[soulman]

SP has spiked since FID on Galoc Phase II. Up nearly 10% today and around 25% since announcement. Would catch fire if we had a positive announcement from BHP re contracting a rig.

Gaz

Looks very strong Gaz. I am in at 10.

[soulman]

Still got the one I entered at 10. It was smallish but since then it has drop to as low as 8 cents. Buyers coming in today on decent volume. 9.1 cents as I typed.

[gazprom1]

Hey SM,

Nice move up...still holding. Back up to my average price...nice. I wonder if price movement based on anything or just someone buying a decent chunk pushing price up??

Gaz

[soulman]

Hey SM,

Nice move up...still holding. Back up to my average price...nice. I wonder if price movement based on anything or just someone buying a decent chunk pushing price up??

Gaz

Not sure Gaz but I see big sellers queing up in the 9.1/9.2/9.3. Tomorrow we shall see if momentum continues. A similar volume needed for another lift. Biggest volume for more than 6 months.

[soulman]

Not sure Gaz but I see big sellers queing up in the 9.1/9.2/9.3. Tomorrow we shall see if momentum continues. A similar volume needed for another lift. Biggest volume for more than 6 months.

Talk about a nothing move. Volume are being churned, but maybe these High Frequency Bots are confusing traders.

[gazprom1]

Not sure Gaz but I see big sellers queing up in the 9.1/9.2/9.3. Tomorrow we shall see if momentum continues. A similar volume needed for another lift. Biggest volume for more than 6 months.

Buying continues SM. Touched a multi week high intra day...10 cents. Wonder if it is on the back of Galoc Phase II or expectation of BHP securing a rig?? Volumes are good and price is continuing to rally.

Bought more of my pet ROC today.....

Gaz

[soulman]

Buying continues SM. Touched a multi week high intra day...10 cents. Wonder if it is on the back of Galoc Phase II or expectation of BHP securing a rig?? Volumes are good and price is continuing to rally.

Bought more of my pet ROC today.....

Gaz

Yep Gaz, glad I hold on to the ones I bought at 9.1 my last post. Looking stronger today.

[gazprom1]

Yep Gaz, glad I hold on to the ones I bought at 9.1 my last post. Looking stronger today.

News is out re the Duhat-2 well (SC 51). Will be drilled middle of the year next year. OEL having a 80% interest. Depth to 1000m onshore...not an expensive proposition with easy path to commercialisation in case of a discovery. Funded from cashflow....nice. SP down on news but no worries.

Where is BHP re SC55....that would set the SP alight.

Gaz

[ELYOB]

OEL has a track record of not impressing . Being in a patch where lots could be done , nothing seems to move . And this goes for Nido as well , many experienced oil men have given up . TAP went there and gave it away , with all those opportunities there .

[soulman]

OEL seems to get a hurry up today with quite largish volume. A very nice looking chart.

[jdg]

she's been moving up alright, soulman. i've got all of my fingers crossed that BHP will say, 'we've secured a rig we'll be drilling before August'. i've been in this one for a while, but i'm not extremely overweight - it's possible, just possible that 2013 will be OELs year.

-j

[boysy]

Interesting trading of late have reentered at the 8 cent level it appears as though a bottom of sorts may of occurred will seem very cheap if phase 2 comes on board with no issues even more so if they drill galoc north and it is a success. It seems as though the smaller o and g plays are being slaughtered unnecessarily though a serious production boost combined with 70% of shares tightly held could make this move fast either way.

[boysy]

Bought more sub 8 this week seems too good to be true. Galoc phase 2 drilling a matter of weeks away with production expected to rise from 5k to 12k increasing ottos net production from 1.5k bopd to around 4k bopd. Then we have onshore drilling in the 3rd quarter at San Isidro. Big unknown is sc 55 with bhp using force majeure due to not gaining Sep clearance from Palawan provincial council. Plenty on the books in the next few weeks.

[ELYOB]

Philippines have elections next week 13th ! The whole country has stalled , and corruption monster raises it head with all that is bad ! Miners of any form are at risk and corruption now attacks at every turn . If you pay up before the election and the pollie changes , you will no doubt have to pay again ..... believe me it is full on . BHPP is saying nothing nor OEL , but if they did you would be stunned . The powers that be at the top cannot control the corruption at lower provincial level , hence the country goes nowhere. I am living in the country now for 9 years and you learn slowly how it all works . Maybe 6 months after the election , something can be salvaged , maybe the army would be better to deal with ? but need a coup in that case , unlikely to happen soon .

[gazprom1]

Thanks for the update ELYOB.

NDO had a stellar week after they announced that they were going ahead with their drill. Had been sitting on a reasonable loss when it was trading at 2.1 cents. Sold out yday at 3.2 and 3.3 and it even traded at 3.4 . While it may trade higher, I am happy to be out with a nice profit in these difficult times for small resource companies.

OEL - has made a nice move up this week. Sellers seemed to disappear late in the week. I am still holding and making a loss but manageable. If ELYOB is correct then we will have to wait a while for things to settle after the elections before we know what is happennkng with SC55. Galoc Phase II and Galoc North are on the horizon so interesting times.

Gaz

[boysy]

Gazprom1 nido did have a stellar week you have t ask to what extent this will feed through to otto. Very tittle buyout sell depth so any movements will likely be violent I suspect to the upside with a free float of only 30% of shares.

[boysy]

Interesting article looks as though drilling of sc55 should not be written off quite yet

http://mb.com.ph/Business/Energy/16360/Petilla_aids_BHP_Billiton_secure_drilling_approval #.UbWDjhEaySO

[gazprom1]

Interesting article looks as though drilling of sc55 should not be written off quite yet

http://mb.com.ph/Business/Energy/16360/Petilla_aids_BHP_Billiton_secure_drilling_approval #.UbWDjhEaySO

Thanks Boysy - good to see that BHP do have interest in carrying out the drill. Bought a few more a couple of weeks back.

Gaz

[boysy]

Looks as though duhat is on the radar now good to see a strong increase on a rather average day

[gazprom1]

Hey Boysy

OEL held up rather well in the recent rout of small caps. Volume is rather thin on both buy and sell sides. Very positive talk re quality of 2D and easy path to commercialization of Duhat.

I had a good day with TAP/ AJQ both looking like they have found some gas....SP of both has been beaten up.

Gaz

[boysy]

Yes not many oilers set to more than double production in the short term let alone onshore drilling and potential offshore giant drill in sc55 though might be getting a bit ahead of myself.

[boysy]

Another decent day ended on 8.8 cents up 10% today plenty on the genda in the next 3 months

[boysy]

Creeping up slowly looks as though galoc drilling is going to plan sp up strongly from the low 7s to be sitting at 9.2 cents and with duhat drilling underway in the next week or 2 it could run strongly from here

[boysy]

Duhat underway now should have a result end of August

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01427589

[Corporate]

Gents

I am really excited about this well. I'd love to know the chance of success.

It is a fantastic punt with great risk / rewards. If I remember correctly the well is only costing us $6m with mean prize of 38m barrels. At our 80% share and valuing the oil in the ground at a very conservative $5 a barrel a find of 38m barrels would be worth $150m!

[boysy]

If I remember correctly they have a low pos circa ~10% however theory seeps and gas indications in the last attempt at drilling must give a higher level of success

[zigzag]

ZigZag has just bought into this one. I like the fact that if Duhat is dry, there should a big increase in production from Galoc to take up the slack.

[gazprom1]

Trading halt looks like it could be ugly...."well control issues". They are only 3 days into the drill. Conditions might be like the other unsuccessful attempts in the area.

Gaz

[boysy]

Yes as others have mentioned on hot copper it could be ugly. Worth noting is the issues were not encountered in duhat-1 until circa 300m sounds like a lot of pressure down hole either way

[Corporate]

I hope this isn't a big issue!

[zigzag]

Seems ominous. Trading halt until possibly the end of the month doesn't sound like a minor issue.

[gazprom1]

...hope there is some kind of silver lining to the news!!

I added 800,00 shares this week at 8.7 so over-exposed.

[boysy]

Th was for the usual period of 3 days due to weekend this runs through to next Tuesday. Seems like they did a fair bit more planning this time lets hope they have a plan B and the right equipment on site to resolve the issue.

[gazprom1]

Hey Boysy,

Tomorrow we should know some more unless they go for a suspension. Silver lining would only be some kind of extreme gas blow out....hope there is some way of drilling the hole!!!!

Gaz

[boysy]

Well duhat was a dud again but sc 55 looks to be shaping up nicely as detailed in the article below

http://manilastandardtoday.com/2013/08/30/palawan-clears-gas-drilling/

[boysy]

Decent day for oel hit 10 cents on a positive galoc report

[boysy]

Further news leaking out in regards to galoc phase #2

http://manilastandardtoday.com/2013/09/14/new-drillings-in-galoc-indicate-bigger-reserve/

Like the bit when they say the 2 drills may of confirmed an extra 12-15 mmbls lets hope the alleged insider is on the money.

[gazprom1]

Further news leaking out in regards to galoc phase #2

http://manilastandardtoday.com/2013/09/14/new-drillings-in-galoc-indicate-bigger-reserve/

Like the bit when they say the 2 drills may of confirmed an extra 12-15 mmbls lets hope the alleged insider is on the money.

Hey Boysy,

I dont read too much into that story....it was a bit vague and may be only confirming what we already hope will be there. Certainly, the production numbers mentioned are only what we already know.

Volume today is up and seems to be a fair bit of interest around the 10 cent mark. Hoping that tomorrows update will be positive.

Wonder when we may see an announcement re SC55?? That would really make things interesting.


Cheers
Gaz

[boysy]

Usual spin in the pines media lets see what happens. Would be good to see another decent report out tomorrow and yes a major driver will be sc55 and bhp confirmation a rig is booked to drill cinco

[gazprom1]

Usual spin in the pines media lets see what happens. Would be good to see another decent report out tomorrow and yes a major driver will be sc55 and bhp confirmation a rig is booked to drill cinco

Successful conclusion to the drilling Boysy.

"....intersected a total of 1,645 meters of highly permeable reservoir interval in both wells."

Still on schedule for November production so 8 weeks and we should be tripling production??? SP is firm but not flying.

Gaz

[boysy]

Very interesting annual report especially the detail given on sc 55


http://www.asx.com.au/asxpdf/20130927/pdf/42jp2g7cxn1dg9.pdf

[gazprom1]

Very interesting annual report especially the detail given on sc 55


http://www.asx.com.au/asxpdf/20130927/pdf/42jp2g7cxn1dg9.pdf

It almost appears from the report that it is just a matter of time before SC55 is returned to BHP. Loads of discussion...looks like they are lining up Hawkeye as the second drill??? Very positive. First oil from Phase II still scheduled for November so only 8 weeks away hopefully. All positive for OEL. I am cautiously optimistic.

Interesting to note that over the past week or so the still depth has remained around 7-8 million shares despite 1-3 million shares being traded each day. Someone is offloading a reasonable amount at 10.5-11. Need a day where it trades 20-30 million and it may break through 11.

Gaz

Discl: hold

[shasta]

It almost appears from the report that it is just a matter of time before SC55 is returned to BHP. Loads of discussion...looks like they are lining up Hawkeye as the second drill??? Very positive. First oil from Phase II still scheduled for November so only 8 weeks away hopefully. All positive for OEL. I am cautiously optimistic.

Interesting to note that over the past week or so the still depth has remained around 7-8 million shares despite 1-3 million shares being traded each day. Someone is offloading a reasonable amount at 10.5-11. Need a day where it trades 20-30 million and it may break through 11.

Gaz

Discl: hold

Looks like ive got a bit of catching up to do, re OEL, i'll go back through the announcements & thread of my favourite oiler.

[boysy]

Good time to start getting back into the spin of things shasta

[boysy]

Sc 55 clearance by the doe getting very close

http://manilastandardtoday.com/2013/10/05/billitons-permit-extended/

[gazprom1]

OEL is at a 17 month high and there could be more gains to be had in the coming weeks/ months. Mkt Cap is only $125m

Galoc Phase II - first oil November so a matter of 4-6 weeks. Production slated to increase from 5000bopd to 12000bopd. OEL's share is 33% so will go from around 1650bopd to 4000bopd. My only question is why Galoc North was not drilled straight after current campaign. Management talked about the fact that rig that were using was not suitable. Hope is is only that and not the lack of prospectivity. Could have been easily tied back to current production. News on Galoc North would be good.

SC55 - getting some press at the moment. Looks likely that BHPB will get an extension/ reinstatement of the block. I think that Pines govt would love to tell BHPP to go away but no-one is ready to drill or even close to ready apart from the BHPB consortium which includes OEL. Farm-in by BHPP is fairly detailed but have obligation for one well and then election to drill another. If don't drill 2nd well then part of block returns to OEL. OEL has a 33% WI. If a substantial discovery would lead to a re-rating of OEL.

OEl has other blocks in the Phillipines that are highly prospective and also a JV with SWALA in Tanzania onshore.

Recent moves up IMO are related to drilling at Galoc Phase II and also relating to the positive media news re SC55. Granting of SC55 to BHPB should see SP rise further.

Gaz

[boysy]

Gaz think you are bang on market might still be waiting to see flow rates ect before a rerate on phase 2 alone. Sc 55 will be the major driver in the short term hopefully this news will help the sp along. From what I have herd phase 2 drilling and 3 d should help give them a better understanding of the galoc north prospect.

[gazprom1]

Gaz think you are bang on market might still be waiting to see flow rates ect before a rerate on phase 2 alone. Sc 55 will be the major driver in the short term hopefully this news will help the sp along. From what I have herd phase 2 drilling and 3 d should help give them a better understanding of the galoc north prospect.

Hey Boysy,

Re Galoc North, that sounds plausible and it would great to have some positive developments concerning that.

It is an exciting time to be a shareholder of OEL. I hope that BHPB are able to secure a rig for SC55 in the next 6 months as opposed to the next 12 months.

I know you have been shareholder for sometime so I hope that the news of Galoc is positive re the flows this week or next week!!!!

Gaz

[boysy]

Things do seem positive the 11 cent line taken out this morning both OEL and NDO up 5% think some flow rates might be leaking out. Would be good to see some momentum of SC 55 being put through ASX releases that would really put a rocket under the SP.

[gazprom1]

....and finally the buy depth has surpassed the sell depth. The sellers have been out numbering buyers at more than two to one but this morning the buy side has finally caught up.

[percy]

Is today's trading being affected by Labour Day in ACR,NSW and SA?

[boysy]

Good day for oel lets hope those buying up to 12 cents know something we don't

[boysy]

Well looks as though galoc will flow at or above per drill expectations this will start to generate some serious cash flow

http://www.ottoenergy.com/irm/Company/ShowPage.aspx/PDFs/1988-34251325/GalocPhaseIIDrillingUpdateNumber20

[Rabbi]

Well looks as though galoc will flow at or above per drill expectations this will start to generate some serious cash flow

http://www.ottoenergy.com/irm/Company/ShowPage.aspx/PDFs/1988-34251325/GalocPhaseIIDrillingUpdateNumber20

Couldn't agree more Boysy, with Galoc production Wells coming in on time and within budget, cashflow is likely to increase strongly. Bring on SC 55 and we have a real thrill and drill!

[boysy]

Certainly would be a lot of hype prior to drill we gotta get official clearance first then bhp need to get a rig sorted. One other thing to note the 12k bopd looks likely to be exceeded which would be great as long as no formation damage happens as a result.

[boysy]

Looks like sc 55 approval is about to be granted ball seems to be in bhp a court

http://www.asx.com.au/asxpdf/20131028/pdf/42kc5227qv0nf3.pdf

[Corporate]

Otto currently in a halt pending resource news in East Africa...exciting times with:

Successful Galoc 2 development and gross production of 12k bopd.

BHP handing back 60% of SC55 and paying Otto $3m cash plus $24m on drilling a well...what a result given the situation

EAR basin heating up..look at SWE share price lately.

[zigzag]

Could be an interesting week for OEL shareholders. I am not going to speculate on the reasons behind the trading halt. What do I know? Only that OTTO rhymes with LOTTO!

[Corporate]

Fingers crossed this is a sale or farmout of SC55. However, the words Major Transaction may mean it is something completely left field. I hope they aren't selling the golden goose, galoc.

Well will know soon.

[zigzag]

Fingers crossed this is a sale or farmout of SC55. However, the words Major Transaction may mean it is something completely left field. I hope they aren't selling the golden goose, galoc.

Well will know soon.

Well, that was a major transaction. They have sold the golden goose, but we get some of the gold, Prior to the ann. I would not have favoured selling Galoc, but the way they've done it, makes it sound pretty good. I would call it a bold move as in they are going for it. Like I tell myself, OTTO rhymes with LOTTO. Interesting times ahead.

[gazprom1]

Hey zigzag

Bold move to say the least....SP reaction very muted. IMHO, should have sold a % and kept a %. Now they have no cashflow. 2 years and then they will need cash.

I voted with the sale of most of my shares. Retained some as we should see who the partner is for SC55 in the coming weeks.

Good luck to holders.

gaz

[gazprom1]

Hey zigzag

Bold move to say the least....SP reaction very muted. IMHO, should have sold a % and kept a %. Now they have no cashflow. 2 years and then they will need cash.

I voted with the sale of most of my shares. Retained some as we should see who the partner is for SC55 in the coming weeks.

Good luck to holders.

gaz

[Corporate]

Gaz. Definitely a bold move but the more I think about it the more I like it.

Galoc is a very mature asset and without additional drilling and discovery it is in its twilight years. Recent presentation have stated production out to 2020, but the rate will be a steep decline from here and the NPV of the 2017+ cash flows would be small especially taking into account decommission etc.

There was also comments around more infil drilling which have cost and risk associated.

Our CFO is a numbers guy and I expect they have spent a lot of time valuing the cash flows and risks to come to this decision.

Also the market wasn't valuing galoc fully. Now we have a negative EV with EARs and sc55 - I especially like the positive talk about 2 potential partners.

Apologies for the fragmented message. Punching thoughts via my phone on a bus in Europe.

The other thing is that any drilling success at galoc is only going to add incremental value. Not multiples which I am after.

[gazprom1]

Hey Corp,

How is the bus trip? Any plans on coming back this way or are you returning to the UK? Just back from Bhutan trekking....awesome. Dom Republic this Thursday with family.

Re OEL, I am disappointed as I thought if they were to sell the lot they may have achieved more but that is me being greedy. Mid/ North Galoc is unknown and would require capital. Agree that Galoc was not going to hot a home run an, like you, I am in for multiples. The timeframe for 1 well at SC55 by December '14 looks too tight to me so not sure how that will shake out. Would need to have rig sorted I would have thought....have they penciled one in?

Elephant hunting in Africa is all well and good but OEL will burn all its cash on a duster (assuming SC55 was drilled) and will be coming to shareholders for capital.

On a risk/ reward basis I am not totally convinced but a find in one of the two would be a game changer.....

Keep up the good work.

cheers
Gaz

[Corporate]

Gaz, glad to hear your travels are going well. I tried to send your a PM a few weeks ago but your inbox was full.

I definitely agree with what you are saying. And as we have said a bold move.

In terms of the current position, we have about A$123m in cash and receivables, subtracting the market cap gives you a negative EV of ~A$13m. This excludes either 1 or 2 Galoc shipments due during July.

So once the capital return is paid (everything else being equal) I expect the market can't to be around A$38m 3cps, with around A$50m in cash. Not a bad position - especially if we have 2 wells line up in sc55 - free carried. Plus the 2015 EARS campaign.

This sale might also put pressure on another bidder for the whole company.

[gazprom1]

Sorry about the PM box being full....cleared some room!!!

Would be good if someone else came out and made a superior offer (a la ROC) - is a possibility. In the meantime, we have potential news on the JV partner for SC55 and timing around the drill to give the SP a lift. Interesting that if the deal is approved by shareholders, any oil produced after 1 July will be Risco's. Hate the retrospective nature of the deals even though shareholder approval is still required.

Keep in touch...would be good to hear your travel news.

Gaz

PS Have made a nice paper profit on AAD - going to continue to hold.

[Rabbi]

The title of this thread sums it up. OEL, having divested it's interest in the Galoc Oil field is now all cashed up with places to go. Now a pure exploration Co. with elephant prospect SC 55 looking likely, as the rig has been commissioned for drilling of this exciting play later in the year. Seismic looks good and chances of success rated at 30% One for those who like a punt.,

[zigzag]

The title of this thread sums it up. OEL, having divested it's interest in the Galoc Oil field is now all cashed up with places to go. Now a pure exploration Co. with elephant prospect SC 55 looking likely, as the rig has been commissioned for drilling of this exciting play later in the year. Seismic looks good and chances of success rated at 30% One for those who like a punt.,

I think I've probably said it before, but after years of studious and diligent research, I finally realised that OTTO rhymes with LOTTO. I have a small holding, just for fun!

[percy]

I think I've probably said it before, but after years of studious and diligent research, I finally realised that OTTO rhymes with LOTTO. I have a small holding, just for fun!

Well I hope it is nothing like my $6 weekly "lucky dip",which comes up every week.."not a winner."! lol.

[Rabbi]

Drilling rig on the way to drill the Hawkeye prospect off the Phillipines, with best estimate 74 mmbo net to Otto. This prospect is rated about a 30% chance of success based on the seismic but on experience of these deep water drills anything could happen and it usually does.

At 12 cents and with 2 months to go plenty of time to jump on board for those not averse to risk.

[gazprom1]

Drilling rig on the way to drill the Hawkeye prospect off the Phillipines, with best estimate 74 mmbo net to Otto. This prospect is rated about a 30% chance of success based on the seismic but on experience of these deep water drills anything could happen and it usually does.

At 12 cents and with 2 months to go plenty of time to jump on board for those not averse to risk.

Hey rabbi

Has been a nice move from 10cents to 12.5/13 cents. More upside pre drill IMHO and then the drill bit will do the talking. It has been frustrating at times with the delay at drilling Cinco and then BHPB withdrawing from the permit. OEL now free carried with a 78%WI - great result.

Gaz

[Rabbi]

Hey rabbi

Has been a nice move from 10cents to 12.5/13 cents. More upside pre drill IMHO and then the drill bit will do the talking. It has been frustrating at times with the delay at drilling Cinco and then BHPB withdrawing from the permit. OEL now free carried with a 78%WI - great result.

Gaz

Only 2 weeks remain before the rig is moved to this promising prospect, rated 30% chance of success OEL in trading halt pending announcement of an acquisition. Exciting times ahead for this junior.

http://www.proactiveinvestors.co.uk...ospect-a-compelling-investment-case-3948.html (http://www.proactiveinvestors.co.uk/companies/stocktube/3948/red-emperor-chief-hawkeye-prospect-a-compelling-investment-case-3948.html)

[gazprom1]

It has been a good time to be in OEL. SP has been immune from the oil price due to sale of producing asset. Would not really like to see a farmin to a kenyan block due to instability and fiscal regime in kenya. Would prefer a WI in a producing field but this is unlikely. They have said previously that they are looking at increasing interests in EARS.

Gaz

[hal]

It has been a good time to be in OEL. SP has been immune from the oil price due to sale of producing asset. Would not really like to see a farmin to a kenyan block due to instability and fiscal regime in kenya. Would prefer a WI in a producing field but this is unlikely. They have said previously that they are looking at increasing interests in EARS.

Gaz

It ended up being a big stake in an Aussie company who has tentacles into some ALASKAN North slope fields. Very prolific area and close to a huge find. Sounds promising and the market reaction has been good on a very soft day for resource stocks.

Selling off Galoc appears to be a masterstroke but of course they need some of these rock bottom priced investments to pay off. It will be an extremely eventful year for Otto.

[shasta]

No mention of OEL in a while, Galoc may have gone, but now i'm back so has my interest given there recent-ish discovery and moving back into production for 2017.

http://stocknessmonster.com/news-item?S=OEL&E=ASX&N=763291

Alaska the wild card, and plenty of drilling action to keep things ticking over

[babymonster]

It's still under value

[Rabbi]

Another stock under the radar. Restarting production from a discovery in the Gulf of Mexico with another being drilled Q4.
Recent presentation outlines their strategy in GOM of farming into low cost drill ready prospects.
Also have farmed into Alaska but any activity here is dependent on partner Great Bear who may be strapped for cash.

[boysy]

doubled my holding last week looking good especially if oil comes on stream and the POO firms in the next few months

[Rabbi]

doubled my holding last week looking good especially if oil comes on stream and the POO firms in the next few months

Drill coming up mid October. Otto has 25% and continue with their strategy of only farming in to low risk, low cost prospects, with high chance of success.

This one looks very promising.

[shasta]

Keep watching developments for the timing to buy back in, just the weak oil price putting me off.

Is the project big enough to warrant investment, thought they would keep a reign on funds which will be needed to fund existing drilling commitments.

[Grapes]

Anybody else in this? After a few years out of the market and not posting here (I used to be jdg, but couldn't remember my password) I took a bit of this a couple of months back. Looks like pretty good news today and with production due I see it as a good earn.
Anybody else?
-j

[boysy]

Yep in this as well a very positive announcement - will lead to more reserves being booked and certainly a new area of production from the B66 sands while the D5 sand thickness is much greater than imagined. Could quite conceivably double the booked 2P reserves bring down the CAPEX and OPEX of the development. Happy holder and a late Christmas present.

[Grapes]

Cheers, boysy, rallying well this arvo. There was talk of a third drill possible. Surely they'll give that a nudge now. There's plenty of news on the horizon - not least of which is income. Money coming in never fails to impress. Good luck, mate.

[boysy]

Yes I think they have a third well option which they can afford (CR oversubscription) which would also fast track additional cash flow. Could be a very profitable few weeks ahead if all goes to plan without issue.

[Grapes]

And there we have it. Sight delay in production for what could be far higher throughput and well life. That all seems smart and suddenly the sp is looking v cheap again. If we are getting 5,000 bopd out of 71 (40% of which is ours) in March then we'll easily be 50% higher than today. It's always a bet with such things, of course, but by goodness this is looking like a goodie. I'm surprised - but bloody happy - it hasn't more attention. Not least because 71 may have so very much more once we put a few more holes in her.
-j

[boysy]

Still flying under the radar for sure and still plenty to run me thinks based on the PE and likely reserve update. Would be good to see the company doing some PR and providing and indication of anticipated cashflow at current POO ...

[Grapes]

Interview with Otto CEO.
https://www.skynews.com.au/details/_5700863769001

[boysy]

good finish for the week for OEL good to see some sustained buying pressure - economics of any production will continue to improve assuming the POO continues its upwards trajectory.

[wizAlvin]

It's not gambling if you enter it into the ASX competition closing very soon sunday!

[Grapes]

Good run up of late after a bit of consolidation. Next couple of weeks we get flow rates and dollars. It should be a great ride.
(and correction: I see above I said 5000 bopd, that's max capacity. They aren't anticipating quite that much).

[boysy]

Grapes has been a slow grind watching BYE power ahead but assuming oil flows in line with expectations a rerate will be required and OEL is on much shorter PE ratio than BYE. Recon we will see 7c by COB tomorrow as the FOMO creeps in, should have oil flow at some stage this week ...

[Grapes]

Around 8c if oil flows in line with expectation, is my pick.

[Joshuatree]

252 million shares through so far today.
MEL: Byron Energy investment and GoM Block Bid outcomes (https://hotcopper.com.au/threads/4102198/)

[boysy]

Next few trading sessions could be interesting to watch glad i loaded up in the cap raise, think this has a lot more to run based on oil found in the ground and cashflow now being generated

[Grapes]

I'm surprised it has been a bit sluggish. my 8c call is looking a little way off, but I still think it will get close when F3 comes on and flow rates are finalised.

[boysy]

Grapes i think with the exit of santo sentiment could change quite quickly, if the wells can produce well in excess of the platform capacity on choke things could get interesting. F3 should be the best producer so hopefully will produce well in excess of the 2000 bopd and 1mmcf of gas the other wells are producing. They should get ~USD$70 a barrel producing 42 api oil, cash should be king from here on out ....

[Rabbi]

Since then well pressure has dropped in F2 so only producing at 450 bopd at F 2 . They still have F3 to complete so once that is up and running market should re- rate
OEL on stabilized flow rates on all 3 wells. It might run to 7 or 8 cents if F3 is the gusher they think it is.

[Grapes]

Yeah, in the short term it's all about what F3 does. They seem confident and it has got great pay depth. Fingers crossed.

[Grapes]

If were going to get a bounce we would have seen it. I'm rather surprised by that, perhaps if F2 had been stronger and we were closer or over that 5k mark.

[boysy]

All the wells continue to be choked back from optimal production. As per the last Ann it looks as though the limiting factor is not the wells but the platforms current 4300 bopd capacity. All in all assuming they can utilise the full capacity of the platform of 4500 if and when the updates occur is a great result. Currently priced at a circa 3x PE which won’t last long albeit santo offloading their holding just prior to production has done no favours to the SP. think it will take another few weeks for those that bough at 5.5 to sell out at 6c for a 10% profit ...

[shasta]

OEL has always had a lag on share price when production starts, when shareholders see the cash flow in the bank it will move.

Goes back to the Galoc project days where good news didn't register and weather related delays hit the share price.

Are they getting the Brent price for the oil, does anyone know?

[boysy]

Louisiana light which is a similar price to Brent ie $3 premium to WTI

[Rabbi]

OEL is up and running after they released their quarterly, with their revenue from SM71 impressing the market. More drill and thrill to come in the Gulf

of Mexico later in the year from this Aussie Junior.

[boysy]

Rabbi a bit keen the quarterly not out until tomorrow or Monday but plenty of good news out today and huge volume

[boysy]

Well its certainly on roll today. Looks like that pesky seller has exited stage left

[Rabbi]

The market took a while to crunch the numbers ie. 2300 bopd net to OEL so a re-rate was on the cards. I expect it to go a bit
higher before it consolidates. They couldn't have got their timing any better, having got production under way with Brent at
a 3 year high.

The drilling of Bivouac peak later in the year will be a further catalyst for the SP as it is a highly promising prospect.

[boysy]

Starting to heat up heading into close on decent volume. The question has to be who is buying in and who is happy exiting stage left .....

[boysy]

Well 7.8c on close something certainly appears to be cooking

[Grapes]

I'm very much enjoying this, but I'm a bit miffed I sold just under half my holding before this latest takeoff. Still, OEL has treated me very well and continues to do so. Long may it continue.

[boysy]

Grapes i still think OEL has a fair bit to run, it looks like who ever wanted out is out and new players are keen to get in. Great buying in the sub 6c space post results

[Grapes]

It's about where I expected it to be immediately after first oil. I'm now looking forward to dipping the drill this year to see if we can get even luckier.

[Grapes]

Man-oh-man that sp is volatile at the moment. I'm pleased that it's generally heading in the right direction, though.

[Rabbi]

Man-oh-man that sp is volatile at the moment. I'm pleased that it's generally heading in the right direction, though.

Grapes, I would say that traders are in command at the moment, as there is no relevant information not factored in that would provide further impetus to
the SP.
Once we get the cashflow figures confirmed at the end of the quarter, and confirmation of a firm commitment to drill Bivouac peak we should take off again.

[Grapes]

Agreed. And don't forget updated reserves.

[Rabbi]

SP still does not reflect value of the cash flow or the upcoming exploration

BUY RECOMMENDATIONS

Otto Energy (OEL)
http://www.thebull.com.au//get_foto.php?id=306870840&size=600

The oil producer is on the cusp of substantially increasing its cash flow from a 50 per cent share in South Marsh Island operations (SM71) in the Gulf of Mexico. We don’t believe the good news is reflected in the company’s current valuation. The shares closed at 7 cents on May 16.

[boysy]

Well a major shareholder IFL continues to buy could be interesting next few trading sessions if they keep buying ....

http://www.ottoenergy.com/site/PDF/2484_1/ChangeinsubstantialholdingfromIFL

[boysy]

Well what a difference a few days makes in the world of oil will be interesting to see OPEC response in a few weeks ....

[Rabbi]

I suggest the Saudis will only want the oil price to stabilize, as they have the big IPO on the horizon.
Last time they increased production they were eating into their foreign reserves when the oil price crashed.
It's taken them some time to eat into the glut so they won't want inventories to get high again.
A bit of a balancing act really. I suppose they want the price at a level where they can make money but the US shalers
have barely got their heads above water.

[boysy]

Well reserves update going down well like the bit where reserves have tripled with scope for more if the B65 sand plays ball. Oil through to 2037 sounds good as well ....

[Rabbi]

Well reserves update going down well like the bit where reserves have tripled with scope for more if the B65 sand plays ball. Oil through to 2037 sounds good as well ....

OEL has a lot further to run in my opinion as they have some exciting exploration targets coming up starting with Bivouac peak at the end of the month.
They seem to have the right strategy of farming into prospects with relatively high chances of success, and teaming up with respected operators.
The SP will probably dip after the capital raising, as some investors take profits on the heavily discounted entitlement price. Good time to buy if you are looking for
an entry point to a well run company with good underlying cash flow.

DYOR.

[boysy]

Lets hope so they have plenty of high COS drills lined up in the next 18 months. Still looking cheap compared to its peers based on current cashflow.

[upside_umop]

Nice one Boysy, good to join you again in a stock - I know you've been in and out of this Co and know it like the back of your hand.

After losing a bit of confidence in HZN's ability to pull off PNG, I wanted more leverage to oil. I swapped out a good chunk and I bought some OEL a few weeks back at 6.6 cents and it quickly sunk to 5.9 cents. Managed to nab a few more around then before the good news came in:
- Hillcorp farmin : This is exactly the type of transaction I like. Low risk appraisal drilling to development within a reasonable timeframe. Good equity stake in it too and relatively fair price by the looks.
- SM71 upgrade. Wow. I was concerned about the lack of reserves at SM71 on an EV/2P basis but this has eliminated that completely turning Otto into a very undervalued Co based on this field alone. At $117m market cap (before raising) and SM71 reserves of 6.6m bbls (heavily oil), we're looking at less than $20 per bbl. That's very attractive, especially with the low operating costs and further upside to prove up some of the possible reserves.

Otto can't seem to miss a trick atm.

Aiming to oversubscribe on the raise but I imagine it will be heavily scaled back.

[boysy]

money for Jam re the retail offering thinking of doing much the same re oversubscribing - wonder if they will take more money should the retail offering exceed the $7M they are after. Think the upside to the GOM and proximity to existing infrastructure isn't yet being accounted for in the valuation of the co. Think this will run much further in the short term heading into BP and Big Tex drill ....

[boysy]

strong finish to the week with the first insto/sophisticated CR shares (5.9c) hitting the market on Friday. To be honest i expected more volume with a 15% profit for a few weeks holding too temping for some but the volume and SP support didn't lend to this hypothesis. Expect an ann re BP out this week which could further drive some FOMO should already be 10c based on the oil they have found and are producing ....

[Rabbi]

I oversubscribed by 100,000 shares and had to sell some BPT to pay for them. If they take everyone's money, there is going to be an overhang of shares
for a while, which could put a dampener on the price.
If this happens I will buy more just on the exploration potential, however the ensuing cash flow on further success is another incentive to buy.
My top pick out of all the oilers I hold but DYOR.

[boysy]

I went for double my entitlement I suspect everyone will get scaled back if we all did the same afterall ...

[boysy]

Pleasantly surprised I got my full alllocatoon, looks like we will have three drills on the go shortly being Biv Peak, Bix Tex and the F#2 well perforation can’t believe we can still pick up the shares for 7c this has to be one of the best value oilers at the moment and most exciting with a huge drilling programme compared to its MC

[Rabbi]

As big a bang for your bucks as you are ever going to get from a junior oiler. I'm somewhat irate that I only got my allocation. Now I have to wait for a refund cheque to buy more on
market as I consider my holding too small.
As I complained on Hot Copper, in this day and age it is an absolute disgrace that Link registry cannot direct credit to a New Zealand Bank Account.
No problem with Computershare Australia being able to do this.

OEL is an out and out screamer, as the upcoming drills have relatively high chances of success. Nevertheless, I concede it is still possible for every drill to be a duster so DYOR.

[boysy]

Quite right Rabbi a pain about waiting for your cheque - i went for 200% of my allocation and got all the extras how did you only get your allocation ?

[Rabbi]

Quite right Rabbi a pain about waiting for your cheque - i went for 200% of my allocation and got all the extras how did you only get your allocation ?

Like you Boysy, I got more than my allocation, but not having loaded up at last years 3.5 cent cash issue I'm essentially short of scrip, so I wait for the refund to top up at the undiscounted
market rate. Cheque will probably take one day from Australia to New Zealand and then another week courtesy of the now dysfunctional New Zealand Post.

[boysy]

Rabbi hate to be the bearer of bad news but the fact its a foreign cheque you can't special answer it so it can take up to 20WD to clear. I kid not i had this drama when i received a cheque back from the SPP raise - even worse the fact i was depositing a CBA (ASB parent) cheque into a ASB foreign currency account did not speed up the clearance of the cheque ..... Wish you well purchasing on market i get the impression its about to explode but am overweight OEL so DYOR

[Rabbi]

Dead to rights Boysy about the cheque taking ages to clear. They like to earn interest on my money while it floats around the postal system and then the Banking system.
Only upside is the New Zealand dollar might be even weaker by the time it gets processed. Actually , my broker said to sign the back and send it to them, so I should be
able to use their Aussie dollars, while they process the cheque.

[boysy]

Could have four drills occurring simultaneously next month (SM71 perforation, Biv Peak, big tex and lightning). If the first result has a sniff of oil expect this to breach 52 weeks highs in short order. Has to be one of the most exciting risk/return oilers at the moment ....