- Otto Energy (OEL) further validates its growth strategy after safely drilling the A0391 #1 well on the Oyster Bayou South prospect in Louisiana
- The A0391 #1 well has encountered 68 feet true vertical thickness (TVT) of net pay, which is consistent with the company’s pre-drill mid case prospective resource estimate
- The well is being completed and is scheduled for first production during Q4 2022
- Oyster Bayou South represents Otto’s third consecutive exploration success in the last six months, presenting a “robust” technical and commercial proof point to apply its capital investment framework to potential new opportunities
- Shares in Otto are up 8.33 per cent, trading at 1.3 cents as of 1:47 pm AEST
Otto Energy (OEL) has delivered further strong validation of its growth strategy after it had safely drilled the A0391 #1 well on the Oyster Bayou South prospect in Terrebonne Parish, Louisiana.
The A0391 #1 well was safely drilled to target depth of 14,137′ measured depth, ahead of schedule.
The well has encountered proved net gas pay of 68 feet true vertical thickness miocene pay, which is consistent with the company’s pre-drill mid case prospective resource estimate.
Currently, the well is being completed and is scheduled for first production during Q4 2022.
Executive Chairman Mike Utsler commented it is another “excellent result” for both the Oyster Bayou South and the preceding Mosquito Bay West prospects.
“Both wells were also drilled safely and ahead of schedule, and we congratulate Castex Energy on their continued strong operating performance.
“We look forward to first production from these discoveries over coming months, directly into current high-priced oil and gas markets and delivering a significant positive impact to Otto free cash flow.”
Oyster Bayou South represents Otto’s third consecutive exploration success in the last six months.
This presents a robust technical and commercial proof point for successful application of Otto’s capital investment framework to potential new opportunities.
The company said it continues to review opportunities in the market applying the same capital investment framework to additional new ventures opportunities and will update the market when deals are concluded.
In addition to these discoveries, Otto’s production base is expected to be further boosted during H2 2022 via the recompletion of the SM 71 F2 well into the J1 sand and the recompletion of the GC 21 Bulleit well into the DTR-10 sand.
Meanwhile at Mosquito Bay West, the first production is on schedule for the current September quarter which means cash flow within four months of exploration spend, further validating the company’s commercial and technical framework for evaluating new ventures opportunities.
Shares in Otto were up 8.33 per cent, trading at 1.3 cents as of 1:47 pm AEST.