- Otto Energy (OEL) temporarily suspends operations at its Green Canyon 21 (GC21) well in Mexico following “operational challenges” in the area
- The company says weather events such as loop currents and Hurricane Ian in the Gulf of Mexico led it to demobilise the drilling rig from the location
- Otto says this gives it the opportunity to procure the additional equipment needed to bring the well online, with first production now slated for the first quarter of 2023
- Shares in Otto are down 11.8 per cent and trading at 1.5 cents at 12:58 pm AEST
Otto Energy (OEL) has temporarily suspended operations at its Green Canyon 21 (GC21) well in Mexico following “operational challenges” in the area.
The company said weather events such as loop currents and Hurricane Ian in the Gulf of Mexico led it to demobilise the drilling rig from the location. Specifically, Otto said it discovered an issue with the casing hanger caused by strong loop currents.
As such, the company has made the call to demobilise the drilling rig from the location and will now work to procure the additional equipment required to bring the well online.
First production from GC21 is now slated for the first quarter of 2023.
Further, Otto’s current field estimate costs have exceeded its original expectations and are now expected to land between US$12 million and US$16 million (A$19 million and A$25 million). The company’s earlier authorisation for expenditure (AFE) estimate was US$5.9 million.
Nevertheless, Executive Chairman Mike Ustler said with zero hedging and no debt, Otto was well-positioned to “fully capitalise” on the production lift delivered by recent growth activities across its assets.
Shares in Otto were down 11.8 per cent and trading at 1.5 cents at 12:58 pm AEST