Hawkeye well drilling starts

MANILA, Philippines - The consortium operating Service Contract (SC) 55 in offshore Palawan has started drilling the Hawkeye-1 exploratory well and expects to yield oil or gas in the next two weeks.

In a disclosure to the Australian Stock Exchange (ASX), Otto Energy Ltd. said the Hawkeye-1 exploration well was spud July 31.

Otto Energy, an ASX-listed oil and gas company, has a 68.18 percent interest in SC 55 through wholly-owned units Otto Energy Investments Ltd. (33.18 percent) and Otto Energy Philippines Inc. (35 percent).

Publicly-listed Trans-Asia Petroleum Corp. of the Phinma Group disclosed yesterday it was informed of the drilling progress.

“Water depth at the well location is 1,788 meters. Programmed well total depth is 2,887 meters below sea level and anticipated drilling duration is about three weeks. The well may be deepened depending on results,” Trans-Asia said.

Trans-Asia holds a 6.82 pecent participating interest in SC 55 through its subsidiary, Palawan55 Exploration & Production Corp.

Other partners in the SC are Century Red Pte. Ltd. with 15 percent and Pryce Gases Inc., the latest addition to the group, with 10 percent.

After the initial drilling, Otto Energy said it will connect the blow-out preventer, a device to monitor oil and gas pressure, to the wellhead to test the pressure before drilling again above the primary target reservoir.

“The next update will be provided once the 12” section is drilled into the primary target reservoir, anticipated to occur about two weeks from now,” it said.

The Hawkeye well has a significant oil prospect, with an estimated 480 million barrels of oil identified on 2D seismic originally acquired by Otto in 2007 and further defined with the 600-km 3D seismic acquisition in late 2009.