Letter of intent signed for Philippines drill rig

The Board of Red Emperor Resources NL has advised that, subsequent to the previous announcement that it has signed an agreement to farm into the highly prospective offshore Philippines Block SC55, Otto Energy Philippines Inc. 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 1000m 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 3600 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.

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”.

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 million bbls. 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 also identified on 3D seismic. With drilling now to occur in Q3 2015, Otto shareholders will participate in this exciting and material opportunity.

Adapted from press release by Joe Green

Published on 03/03/2015

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