Australia-listed Otto Energy Ltd. said it obtained the Department of Energys (DoE) approval granting it a two-year moratorium on exploration activity earlier required by the regulator covering a deep-water exploratory well in the South China Sea. The company had sought the reprieve in January or five months after announcing plans to plug and abandon Service Contract 55 (SC55) after its drilling there yielded no oil.
The moratorium is good until December 23, 2017, Otto said in a statement.
Otto owns 78.18% of the service contract, a drilling permit issued by the DoE for the Hawkeye 1 well. It had said it will assign its working interest to its joint venture partners Century Red Pte Ltd., which owns 15%, and Palawan 55 Exploration and Production Corp. with a 6.8% stake.
"Otto has indicated to the remaining joint venture partners that it will not continue with further activity in SC55, Otto said in the statement.
"The joint venture will undertake a specialised geophysical study in the interim period to determine if further drilling activity is warranted in SC55.
Frustrating but it will be another opportunity to take shares off the table at 5p in the next 12 months. That would give me £1million to play with. It has its risk but looks a solid bet on any future venture
"compliment current assets in the portfolio" I like that line, we only really have one real asset now and that's on a go slow for 2 years. This share is a real dog, why did I ever invest here? Bandy you suck at evaluating opportunities. Others seem to be picking up all sorts but not you. I'll pop back in 24 months and see if we will loose the contract on our last asset due to nothing being done. Good luck all. Except you bandy. You just need to pull your finger out and do something productive.
The two year moratorium allows Rmp to hold 37.5% of sc55 at no cost or work commitment. The hope is that they can farm this down in an improving market. Otto got out of the Phillipines at the low oil price as they know majors won't be spending on exploration in the short term. Remember Bhp wanted to drill cinco and have spent over $50m on 3D. It's one that will attract majors at a $80 oil price
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