Pryce Gases Inc., a unit of Pryce Corp. has acquired 10 percent participating interest of Otto Energy Philippines Inc. in Service Contract 55 (SC55).
This is for the exploration, development, and exploitation of petroleum resources in the offshore area of Southern Palawan.
Otto Energy Ltd said its subsidiary Otto Energy Philippines Inc. (Otto Philippines), has signed a farm-in option agreement with Pryce Gases Inc. (Pryce Gases) to earn a 10 percent working interest in SC55.
Following this farm-in, Otto will retain a participating interest of 68.18 percent in SC55.
Pryce Gases has agreed to a farm-in option to SC55 to earn a 10 percent working interest
by participating in the drilling of the Hawkeye-1 exploration well.
This farm-in option, along with the $24.5 million funding committed by BHP Billiton and the Red Emperor Resources NL farm-in announced in March 2015 for a 15 percent working interest, ensures that Otto is fully funded for the drilling of Hawkeye-1, which is estimated to cost between $30 million and $35 million.
Load-out of the Maersk Venturer drilling rig has been completed and the Maersk Venturer has moved to the Hawkeye drilling location.
“Drilling will commence over the coming weekend once the rig has been accurately located over the required drilling location,” said Otto.
It is expected that the well will take approximately two to three weeks to be drilled to the reservoir interval, at which time Otto would report key information obtained during drilling.
Pryce Gases, which is 98 percent owned by Pryce Corp., is engaged in the manufacture and distribution of industrial and medical gases and liquefied petroleum gas (LPG) under the trade name “PRYCEGAS.”
The Company operates in Mindanao and Visayas areas.
SC55 is a deep-water block in the middle of a proven regional oil and gas fairway that extends from the productive offshore Borneo region in the Southwest to the offshore Philippine production assets Northwest of Palawan.