OEL - (Otto) Multi based, Gambling Stock.

[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-ite...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

.^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

.^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

.^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