The Board of Red Emperor Resources NL (“Red Emperor” or “the Company”) is very pleased to advise that, subsequent to the announcement made earlier today that it has signed an agreement to farm into the highly prospective offshore Philippines Block SC55, Otto Energy Philippines Inc. (a wholly owned subsidiary of Otto Energy Ltd, ASX: OEL) has entered into a Letter of Intent with Maersk to secure the Maersk Venturer ultra-deepwater drillship to drill the Hawkeye-1 exploration well.
As one of the most modern and advanced drillships in the world, this rig has the required capability to drill the Hawkeye-1 exploration well. The exploration well has been designed to reach the top of target reservoir approximately 1,000m below the sea bed floor and intersect the gas oil contact to prove or otherwise the presence of the oil leg.
The Maersk Venturer was commissioned in 2014 and was built at the Samsung Heavy Industries yard in Korea. Capable of operating in up to 3,600 metres of water and with dual drilling derricks, high capacity mud pumps and bed space for 230 personnel, the Maersk Venturer is one of the newest and most capable drillships in the world. The Maersk Venturer has recently completed work for Total Malaysia.
All required long lead items have now been procured and stored in yards in Labuan, Malaysia. Drilling of the Hawkeye-1 exploration well is expected to commence in early Q3 2015.
Detailed contractual arrangements with Maersk will be finalised in the coming weeks and a further announcement will be made in due course.
Otto Energy Ltd (ASX: OEL) (Otto) is pleased to announce that its subsidiary Otto Energy Philippines Inc. (Otto Philippines) has signed a farm-in agreement with Red Emperor Resources NL (Red Emperor) to earn a 15% working interest in SC55, offshore the Philippines.
Otto has also executed a letter of intent with Maersk Drilling, one of the world’s largest offshore drilling companies, to secure the Maersk Venturer ultra-deepwater drillship to drill the Hawkeye-1 exploration well.
Hawkeye Exploration Prospect
Hawkeye is a large turbidite clastic prospect identified on modern 3D seismic acquired in 2010. The Gross Prospective Resource Best Estimate for Hawkeye is 112 MMbbl (Net Prospective Resource 74 MMbbl to Otto). Success at Hawkeye will unlock a significant new hydrocarbon play in the deepwater Southern Palawan with material follow-up potential in the carbonate leads and prospects (Gross Prospective Resource Estimate ~11 Tcf and ~400 MMbbl of Condensate) also identified on 3D seismic. With drilling now to occur in Q3 2015, Otto shareholders will participate in this exciting and material opportunity.
Red Emperor Farm-in
Red Emperor, listed on the ASX and AIM (ASX: RMP, AIM: RMP), has agreed to farm-in to SC55 and earn a 15% working interest by participating in the drilling of the Hawkeye-1 exploration well. Key terms of the farm-in agreement are outlined in Appendix 1.
This farm-in, along with the US$24.5m funding committed by BHP Billiton and the expression of interest received in January 2015 from PNOC-EC for a further 15% working interest, ensures that Otto is fully funded and has mitigated significant financial risk associated with the drilling of Hawkeye-1.
Letter of Intent for Maersk Venturer Drillship
Otto Energy Investments Ltd (a 100% subsidiary of Otto and Operator of SC55) (OEIL) has entered into a Letter of Intent with Maersk Drilling to secure the Maersk Venturer ultra-deepwater drillship to drill the Hawkeye-1 exploration well. Maersk Venturer is one of the most modern and advanced drillships in the world, this rig has the required capability to drill the Hawkeye-1 exploration well.
The Maersk Venturer was commissioned in 2014 and was built at the Samsung Heavy Industries yard in Korea. The Maersk Venturer is one of the newest drillships in the world, capable of operating in up to 3,600 metres of water, with dual drilling derricks, high capacity mud pumps and bed space for 230 personnel. The Maersk Venturer has recently completed work for Total Malaysia. Detailed contractual arrangements with Maersk Drilling will be finalised in the coming weeks.
All required long lead items have now been procured and stored in yards in Labuan, Malaysia. Drilling of Hawkeye-1 is expected to commence in Q3 2015.
Matthew Allen, Otto’s CEO said: “Otto would like to welcome Red Emperor to the SC55 joint venture. Along with our existing joint venture partner, TransAsia Oil and Energy Development Corporation and PNOC-EC, the SC55 joint venture looks forward to delivering the highly important Hawkeye-1 exploration well on behalf of the Philippine Department of Energy.
Securing a drillship of the capability of the Maersk Venturer for the drilling of Hawkeye-1 in Q3 2015 is a major event for Otto. We are now finalising preparations to begin drilling and we look forward to updating our shareholders during 2015 as this activity is undertaken”.