Otto Energy starts add’l production from Galoc field

MANILA, Philippines - Otto Energy Ltd., an oil and gas company listed at the Australian Stock Exchange, said it has started production at the Galoc-5H and 6H wells in offshore Palawan.

In a disclosure to the Australian Stock Exchange, Otto Energy said the two wells are under the second phase development of the Galoc project.

“Initial production is 14,500 barrels of oil per day and the four well system is expected to be operated at 12,000 barrels of oil per day going forward,” Otto Energy said.

So far, Galoc has produced more than 11 million barrels of oil since it was commissioned in 2008.

“Ultimate recovery from the field, with the addition of Galoc-5H and 6H, is expected to be approximately 25 million barrels of oil with end-of-field life extended beyond 2020,” Otto Energy said.

Otto Energy chief executive officer Gregor McNab said the commencement of production from the second phase of Galoc represents a milestone for the company.

“For Otto Energy shareholders this represents a significant milestone, with our share of cash flow from Galoc set to increase substantially, providing the company with additional funds to finance our exploration and development studies in Southeast Asia and East Africa. It also represents a major validation of our capability as an operator as we consider new ways in which to grow the company and deliver returns to shareholders,” McNab said.

The Galoc joint venture partners, led by Otto Energy, approved last year the Galoc Phase 2 development and commenced drilling in June 2013.

Total investment cost for the Phase 2 project is $188 million, of which Otto Energy’s share is $62 million representing its 33 percent interest.

The Phase 2 development required the drilling of two subsea wells, tied back to the existing floating production, storage and offloading facility.

Otto holds a 33 percent direct ownership in the Galoc project through Galoc Production Co. Other partners are Nido Production Ltd., Oriental Petroleum & Minerals Corp., Linapacan Oil Gas & Power Corp., the Philodrill Corp. and Forum Energy Philippines.