Otto Energy Ltd has been advised by the Australian Securities Exchange that the announcement of the maiden reserves booking for SM-71 made on 7 July 2016 has not complied with all of the requirements of Listing Rule 5.31. This is an updated release containing the original material and supplemental material in order to comply with Listing Rule 5.31.
Otto has advised that it has received the independent reserves report on the SM-71 discovery in the shallow waters of the Gulf of Mexico from Operator, Byron Energy Limited (ASX: BYE) (Byron).
The independent reserves estimates were prepared by Collarini Associates (Collarini), based in Houston, Texas, USA.
SM-71 is a joint venture between Byron and Otto, as initially announced to the ASX on 11 December 2015. Byron is the operator of SM-71 with each company having a 50% working interest and a 40.625% net revenue interest in the project.
The reclassification of the now discovered D5 sand from Prospective Resource to Reserves has been offset by the inclusion of a newly matured opportunity in the B65 sand within the Prospective Resource category. The B65 sand overlies the D5 sand reservoir in the vicinity of the SM-71 #1 well and is a prolific oil producer on other portions of the SM-71 salt dome. This target forms additional upside that can be evaluated in future drilling programs at minimal additional cost. The joint venture will continue to incorporate the results of the recent drilling campaign into its understanding of the salt dome play to identify further potential upside.
Oil prices used in the reserves report represent NYMEX base, starting on 1 July, 2016 of US$50.21 per barrel with a final price of US$59.97 per barrel on 1 December, 2023 and held constant thereafter; gas prices used in this report represent Henry Hub base, starting on July 1, 2016, of US$3.10 per million ft3, rising to a final price of US$4.68 per million ft3 on 1 December, 2029 and held constant thereafter.
Otto’s Managing Director, Matthew Allen said:
“Otto is very pleased to report its maiden reserves in the Gulf of Mexico portfolio acquired in late 2015. The SM-71 discovery has delivered a very significant reserve base to Otto for a very low finding cost of US$2.11/boe. With additional near field drilling opportunities being identified, the SM-71 lease is proving to be very value accretive for the joint venture. We look forward to bringing this discovery into production in 2017 and return to being a cashflow producer.”
For further information please visit http://www.ottoenergy.com/irm/PDF/2022/IndependentReservesReportedforSM71UpdatedRelease
Adapted from a press release by Louise Mulhall
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/20072016/otto-energy-has-reported-independent-reserves-for-sm-71/