OEL - (Otto) Multi based, Gambling Stock.

[shasta]

Otto Energy seeks partners to help in drilling Cebu wells


By Amy R. Remo
Philippine Daily Inquirer
First Posted 22:27:00 05/14/2010

Filed Under: Energy


AUSTRALIAN FIRM OTTO ENERGY Ltd. is looking for partners to help it drill wells in the Argao prospect in Cebu, which is said to contain commercial quantities of oil.

Otto plans to drill at least one exploration well by December this year, according to its commitments under the exploration program.

The company is expected to spend some $36 million on its planned drilling.

According to the company, the Argao prospect was a mature and drill-ready prospect.

Based on the companys studies, a portion of the Argao prospect may even have eight levels, each containing between 40 and 300 million barrels of oil.

The Argao prospect is in the southern part of Service Contract (SC) 51, and is just one of the 11 prospective oil and gas sites the company earlier identified.

Otto Energy currently holds an 80-percent stake in the license, while the balance is shared among Alcorn Gold Resources Corp., Trans-Asia Oil and PetroEnergy Resources Corp.

SC 51 currently covers some 330,000 hectares over the East Visayan basin. The area consists of the northern and southern parts, which are separated by 80 kilometers.

The large Argao and Bahay prospects are located in the south block, which has about nine additional leads recently defined from modern 2D and 3D seismic data.

Otto earlier did preparatory site surveys of the proposed Argao 1 and Bahay 1 drilling locations in the East Visayan Basin.

The Bahay 1 prospect was also said to have about 100 million barrels of recoverable oil.

Wonder if BHP will opt in on this permit, surely they would know the contour of the area by now with all there seismic data

Have we heard the "contains commercial quantities of oil" before, or that its a mature drill ready target?

Sounds very positive, i'd prefer OEL were conservative & quiet about it & let the drilling do the talking.

[boysy]

They need a partner t help drill the target though shasta i guess perhaps they are trying to shake the tree as such and hope bhp stump up beefore somebody else does otto could still maintain significant equity so plenty of upside if this goes ahead as they mentioned before dec 2010 hopefully they will do this and not try and get the doe to push back the timeframe further

[boysy]

Interesting commentary on transatlantic operator of edirne on thrace basin by an analysist

http://www.transatlanticpetroleum.co...-TransAtlantic

a snippit below

TER: Any other areas abroad that present those opportunities?

AM: I really like what I'm seeing in Turkey. Turkey imports 90% of its energy, most of it from Iran and Russia, so you have much higher natural gas prices there. Natural gas is about $8 per mcf (a unit of natural gas equal to one thousand cubic feet of gas), whereas domestically it's $4--$5. I get excited when I see an energy-dependent country that has made it attractive to invest in a largely unexplored area.

TER: Any examples?

AM: TransAtlantic Petroleum Ltd. (TSX:TNP; NYSE:TAT) is a company I'm really excited about. You have a company that at the bottom of the market put together a land package of several million acres in Turkey. They added a couple million acres in Morocco and another 700,000 or so in Romania. TransAtlantic now has a producing asset, the Selmo oil field, that gives it some good cash flow. It has also identified a couple of other areas that are very prospective for both conventional and unconventional natural gas. And it has a new gas play that just started producing in a gas field called the Thrace Basin, where the wells literally pay out in three to six months. I don't even know if they've ever fracked a well in Turkey. TransAtlantic chairman Malone Mitchell and his company have a long history of applying modern technology domestically. TransAtlantic has not only gone to Turkey and put together a great land package, but they're also taking their expertise and technology to places where they can lock up enormous acreage positions. I think it could get really exciting when you apply that technology, especially in the Thrace Basin where it looks like TransAtlantic has some tight gas opportunity. As well as in the Paleozoic trend where there are a couple of areas, especially near Arpatepe, Turkey, that look like they could be perfect for fracking or horizontal drilling. It's really that combination of strong management, applying the right technologies and then having the real estate in the right areas. We're still at the very early innings of what TransAtlantic is doing there.

[boysy]

http://www.theaustralian.com.au/busi...-1225869671928

Look beyond the temporary turmoil Robin Bromby From: The Australian May 21, 2010 2:41PM

EVERYONE who has called today has opened the conversation with the state of the market.

Yes, it is awful, and this pain will last for some time yet.

But Pure Speculation, after a momentary weakness of the knees this morning, has managed to stiffen the old spine and again see beyond the temporary turmoil.

Just in the past week, in print and online, this column has reported on (a) the McKinsey projections India's growth over the next 20 years and the new enormous demand it will create for raw materials and (b) how China's global search for energy will replicate in size its snaring of metals around the world.

And now we've found one commodity which is already in short supply in China and of which Australia has plenty. Our lips are sealed until you go out and spend $1.50 to buy Monday's The Australian

In his latest weekly client note, Warwick Grigor at BGF Equities takes another swing at the man he calls Kevin Chavez and further pins down the argument that the new super tax can't work and that the Prime Minister wont be able to explain it to the increasingly worried electorate.

But Grigor also points out there is an upside to the shrinkage of the Australian dollar's value, caused by the collapse of confidence in the way this country is run and the consequent repatriation of money from Australia.

But the falling Aussie dollar is, he says, going to underwrite huge cash flows for coal and iron ore producers, whose output is sold in US dollars but produced in Australian dollars.

"Investors have been bailing this week, but sensible analysis would suggest they may come back aggressively when they consider the cash flows," writes Grigor.

Keeping in a positive mood, Dave Wall at Hartleys has today put a "buy" on Otto Energy (OEL), a stock selling at 8.4c.

Wall said Otto had undergone significant transformation during the global financial crisis and had emerged in a strong position. OEL has $23 million in cash, no debt, production of 1730 barrels of oil and 4m cubic feet of gas a day from part-owned operations in the Philippines and Turkey, along with a prospective exploration portfolio.

A deal in the Philippines with BHP Billiton (BHP) fell apart at the height of the global financial crisis, but subsequently the major has re-entered and agreement, is paying for 3D seismic and may elect to farm-in later this year or in early 2011. This would enable Otto to be free-carried for two deepwater exploration wells.

"We interpret BHP's willingness to re-enter negotiations as bullish for a farm-out and consider it likely that a deal will be finalised," Wall writes.

[boysy]

As known by many here Nido petroleum commisioned GC&A to do an independent reserves assesment of galoc the figures speak for themselves you have to wonder if or when Otto will use these updated figures for reserves estimate.

http://www.nido.com.au/reserves.html

2p reserves estimated to be 18.8 mmbl as of the
31 dec 2009 and this figure doesnt include the aquired 3d over galpoc done recently. At last report leaving 14.7 mmbl after taking into account production up unitl the 31 dec 2009.The last update on reserve estimate at the 2p level was 1.46 mmbl net to otto or at the time indicate gross 2p for the entire galoc field at 7.7 mmbl.

So if GC&A figures are to be belived over Ottos figures we should have around as of 31 dec

1p 1.277 mmbl net to Otto remaining
2p 2.76 mmbl net to otto remaining
3p 4.375 mmbl net to otto remaining

IF we take the figures from GC&A and take off a 1.3 miillion barrels produced since dec 2009 whch would reduce net reserves to otto by 0.25 mmbl.

This sohould mean as of today we should have 1 mmbl 1P 2.5 mmbl 2P and 4 mmbl 3P

Current MC = ~$100
cash should be greater than $25 million
EV = 75 million
If this value was galoc alone and we valued our reserves on a 2P level that would indicate a value of $30 per barrel held in reserve. that gives no value to Upside potential from farm ins farm outs of SC 55 which if BHP signs and drills 2 wells is worth over US$150 million.
Nido seem pritty confident that reserves will increase further once newly incorporated 3d over galoc is interperated. Bring on Galoc Phase #2 the FID should be due in the next few months and with a price tag of US$20 mill otto should have no problems funding this sort of cash before 1st Q 2011 as long as Galoc and Turkey keep Pumping.

Reserve figures taken off
http://www.nido.com.au/reserves.html

also quick mention of galoc on
http://www.nido.com.au/production.html

When will Otto accept these figures one must ask the reserve estimate by Otto was done in house and the one commisioned by NDO was done independently.

[boysy]

Valuation 21st May 2010 by heartleys very indepth some 25 pages 6 month price target A$0.15

http://www.ottoenergy.com/IRM/Compan...eName=Hartleys Initiates Coverage

[boysy]

Trans-Asia, Frontier Gasfields sign equity-option deals GMANews.TV - Friday, June 4Send IM Story Print
Trans-Asia Oil and Energy Development Corp., whose shares are traded on the Philippine Stock Exchange (PSE), has signed farm-in option deals with Frontier Gasfields Pty. Ltd. of Australia.

A unit of the Phinma Group, Trans-Asia said in a disclosure to the PSE that the agreements with Frontier Gasfields cover its service contracts (SC) 55 and 69 for petroleum exploration.

The deal gives Frontier Gasfields a 150-day option to buy from Trans-Asia a 5-percent equity in SC 55 once the first exploratory oil well in the Marantao prospect, near the Malampaya oil and gas field in Palawan, is completed.

Malampaya is the Philippines' largest producer of condensate gas.

SC 55 covers a 9,000-square-kilometer area in offshore southwest Palawan. The Marantao prospect is estimated to contain 1.812 trillion cubic feet of gas and 567 million barrels of oil.

Seismic data from SC 55 have been collected by various groups in the 20 years to 1990, but no well has so far been drilled in the area.

Trans-Asia holds a 15-percent stake in SC 55 with Australian oil and gas firm Otto Energy Ltd. holding 85 percent of the contract.

Otto acquired its 85 percent interest in SC 55 when it bought NorAsian Energy Ltd. in 2006.

The agreement over SC 69, on the other hand, gives Frontier Gasfields the option to buy a 15-percent participating interest, Trans-Asia said.

SC 69 is a 7,040-square-kilometer area in offshore Central Visayas bounded by the islands of Cebu, Bohol, and Leyte. Otto Energy, which holds 79 percent of the contract, is also with Trans-Asia in the SC 69 consortium.

Frontier Gasfields may exercise its option under SC 69 within 182 days from the date it pays for the option fee, Trans-Asia said in its disclosure.

Trans-Asia posted a net loss of P39.6 million in the first quarter of the year from a net income of P178.8 million a year earlier, as lower revenue and higher costs and expenses hounded its operations for the first three months of 2010.

Its consolidated revenues dropped to P251.2 million from P385.9 million in the same comparable period after it lost the revenue stream from the power plant of CIP II Power Corp. when Manila Electric Co. took over the concession agreement with the developer of Carmelray Industrial Park II in Calamba, Laguna on April 11, 2009.

Trans-Asia’s consolidated costs and expenses amounted to P285.3 million from P180.7 million, the company said. —VS, GMANews.TV

[boysy]

Interesting presentation by Transatlantic for May

http://www.transatlanticpetroleum.co...esentation.asp

Has much more new information about Transatlantic buying out Zorlu and the assets the company will aquire. You have to wonder if Otto would be interested in getting in on some of the action the presentation also shows the equipment Transatlantic have in the region no update on drilling of somurcali-1 which is a bit dissapointing but on the flip side hopefully the recently shot 3d will yield some targets. it still appears they have plenty of 3d targets yet to drill in the NE of the basin so far tghey have been targeting modest gas volumes close to the plant if you look at page 10 of the presentation you can see the 3 large targets yet to be drilled all covered by 3d. Then theres the fracture simulation planned for the thrace basin could be plenty more to come out of turkey yet in my opinion.

[boysy]

Things heating up in the pines the majors certainly seem to be pouring money into the region lets just hope another success at sc 56 will hurry along BHP to farm into SC 55. Would be good to hear an update along the lines of potential farm ins SC 51 due by Dec 2010 and SC 50 by march 2011 clearly both could be delayed further untill some equity is farmed out in both.

http://www.manilastandardtoday.com/i...d=2010/june/11

ExxonMobil Corp. may spend an estimated $500 million in its Sulu Sea oil exploration, Energy Secretary Jose Ibazeta told reporters Thursday.

Ibazeta said he expected Exxon’s local exploration unit, ExxonMobil Exploration and Production Philippines B.V., to invest the amount in drilling wells at deep water levels in south Sulu Sea under service contract 56, which covers the Sandakan Basin.

“My estimate [is that] they will easily be putting in $500 million for their work program or just to explore. It takes a lot of money to bring up oil. That is just my estimate,” he said.

SC 56 covers an area of 8,200 square kilometers and is about 900 kilometers southwest of Manila and 200 kilometers northwest of Bongao, the capital of Tawi-Tawi province. ExxonMobil is drilling a third wildcat well as part of its appraisal of the reserves of the Sandakan Basin.

ExxonMobil has drilled two wells at a cost of $100 million each. It started preparatory work for the drilling of the third well.

A government report showed that the semi-submersible West Aquarius drilling rig spudded the Palendag-1 well on June 4 but plugged and abandoned it “after encountering drilling difficulties.”

ExxonMobil has since moved the West Aquarius rig to a nearby location, called Palendag-1A.

West Aquarius is the same that ExxonMobil tapped in drilling the first two exploratory wells in Sulu Sea.

ExxonMobil owns 50 percent of SC 56 while partners Mitra Energy Ltd. and BHP Billiton International Exploration Pty Ltd. held 25 percent each.

ExxonMobil completed drilling of the first two wells, namely Dabakan-1 and

Banduria -1, and is processing data registered from the operations. The drilling operations in the Dabakan-1 started in October last year and were completed in December. The Banduria-1 well, meanwhile, was completed in late February.

Energy Undersecretary Ramon Oca earlier said ExxonMobil did not report a flow rate in the first two wells, adding that it would take the company a longer time to evaluate the drilling data.

He said ExxonMobil’s first two wells, which showed signs of hydrocarbon find, had drawn the interest of foreign oil companies in the South Sulu area.

“There are many queries, especially in SCs near ExxonMobil. There are negotiations ongoing,” he said.

[shasta]

Things heating up in the pines the majors certainly seem to be pouring money into the region lets just hope another success at sc 56 will hurry along BHP to farm into SC 55. Would be good to hear an update along the lines of potential farm ins SC 51 due by Dec 2010 and SC 50 by march 2011 clearly both could be delayed further untill some equity is farmed out in both.

http://www.manilastandardtoday.com/i...d=2010/june/11

ExxonMobil Corp. may spend an estimated $500 million in its Sulu Sea oil exploration, Energy Secretary Jose Ibazeta told reporters Thursday.

Ibazeta said he expected Exxon’s local exploration unit, ExxonMobil Exploration and Production Philippines B.V., to invest the amount in drilling wells at deep water levels in south Sulu Sea under service contract 56, which covers the Sandakan Basin.

“My estimate [is that] they will easily be putting in $500 million for their work program or just to explore. It takes a lot of money to bring up oil. That is just my estimate,” he said.

SC 56 covers an area of 8,200 square kilometers and is about 900 kilometers southwest of Manila and 200 kilometers northwest of Bongao, the capital of Tawi-Tawi province. ExxonMobil is drilling a third wildcat well as part of its appraisal of the reserves of the Sandakan Basin.

ExxonMobil has drilled two wells at a cost of $100 million each. It started preparatory work for the drilling of the third well.

A government report showed that the semi-submersible West Aquarius drilling rig spudded the Palendag-1 well on June 4 but plugged and abandoned it “after encountering drilling difficulties.”

ExxonMobil has since moved the West Aquarius rig to a nearby location, called Palendag-1A.

West Aquarius is the same that ExxonMobil tapped in drilling the first two exploratory wells in Sulu Sea.

ExxonMobil owns 50 percent of SC 56 while partners Mitra Energy Ltd. and BHP Billiton International Exploration Pty Ltd. held 25 percent each.

ExxonMobil completed drilling of the first two wells, namely Dabakan-1 and

Banduria -1, and is processing data registered from the operations. The drilling operations in the Dabakan-1 started in October last year and were completed in December. The Banduria-1 well, meanwhile, was completed in late February.

Energy Undersecretary Ramon Oca earlier said ExxonMobil did not report a flow rate in the first two wells, adding that it would take the company a longer time to evaluate the drilling data.

He said ExxonMobil’s first two wells, which showed signs of hydrocarbon find, had drawn the interest of foreign oil companies in the South Sulu area.

“There are many queries, especially in SCs near ExxonMobil. There are negotiations ongoing,” he said.

Didn't take too long after our conversation that majors would be sniffing around did it!

Success at tindalo will have more than a few eyes on the flow rates, & this could generate alot more interest in the region, not just for NDO, but KIK & OEL as well.

I'm with you, i wish OEL would update us on there minimum work in program & set the drill dates - only exploration wells but still as a producer you want to retain a certain level of exploration (even if we are reliant on BHP at the mo).

No debt & consistent cashflows should be able to fund there ongoing commitments