Otto Energy set to start drilling 1st well in Leyte

MANILA, Philippines - Otto Energy Ltd. of Australia will start the drilling of its first petroleum exploratory well anytime soon at offshore Northwest Leyte, a Department of Energy (DOE) official said.

Energy Undersecretary Ramon Oca said Otto Energy, through its subsidiary NorAsian Energy Ltd., will commence with the “spudding” activities at Duhat-1 well at a depth of 1,000 meters.

According to Oca, based on the report submitted by the company, it would be spending about $5 million for its Service Contract 51 or for the drilling of the Duhat-1 well.

“The contract is onshore so the drilling cost is cheaper than offshore. 

They’re hoping to find oil. We’re hoping to see minimum, if positive, of two million barrels to as high as 18 million barrels,” Oca said.

The DOE official said the Duhat 1 drilling will take around 25 days to complete.

Otto, being the mother firm of NorAsian Energy, serves as an operator of SC 51 which covers 3,320 sq. km.

SC 51 comprises of two areas, onshore Northwest Leyte in the north and the islands of Cebu and Bohol in the south.

In January this year, Otto Energy, however, announced that it executed a farm-out agreement for SC 51 to Swan Oil and Gas Ltd. for a 40-percent stake.

NorAsian’s other partners in the contract area are Trans-Asia Oil and Energy Development Corp., Alcorn Gold Resources Corp. and Petro-energy Resources Corp.

Earlier, NorAsian signed a land rig contract with DESCO Inc. for the exploration drilling.

Also earlier this year, the DOE gave the group a go signal to drill Duhat-1 well as it will satisfy the work commitment under the 3rd sub-phase of the service contract.

Otto Energy earlier said it has elected to not continue in the South block, containing the Argao prospect, giving SWAN 80 percent working interest in the Southern block.