- Otto Energy (OEL) has provided an update on the production status of its Green Canyon 21 Bulleit Field in the Gulf of Mexico
- The company explained the Bulleit well continues to produce from the deeper MP sand, but data indicates a smaller reservoir than originally anticipated
- As a result, the plan is to re-complete the well in the shallower DTR-10 sand and move away from the MP sand altogether
- The company will need to procure several long-lead items, which are expected to cost approximately US$3.5 million (around A$4.54 million) for the move
- Re-completion is then expected to occur in mid-2022, with production from the DTR-10 sand expected later that year
- Shares in Otto Energy are trading steady at 1 cent per share
Otto Energy (OEL) has provided an update on the production status of its Green Canyon 21 Bulleit Field in the Gulf of Mexico.
The energy stock has a 16.67 per cent working interest and a 13.33 per cent net revenue interest in the lease and project.
It used today’s update to explain the Bulleit well at Grand Canyon 21 continues to produce from the deeper MP sand on a managed basis.
The production rates from the MP sand have remained relatively consistent since the first oil, with a technical assessment of the production performance now completed.
It shows that bottom-hole pressure and reservoir performance data collected after hook-up and first production indicate a smaller reservoir than originally anticipated
As a result, Otto said the favoured plan was to move away from the MP sand and execute a re-completion of the well in the shallower DTR-10 sand.
Recompletion is expected to occur in mid 2022, with production from the DTR-10 sand expected later that year.
The move will also require the company the buy several long lead items, which are expected to cost approximately US$3.5 million (around A$4.54 million).
“Otto remains confident and excited in the potential of the shallower DTR-10 sand, which can be accessed from the existing well bore and requires no additional infrastructure to bring online,” Executive Chairman Mike Utsler said.
“The timing required by the operator to procure the long lead equipment, secure a deepwater rig aligned with and available against the weather and current constraints will result in delaying contribution to Otto’s bottom line until 2022,” he explained.
“This will actually enable Otto to continue to strengthen its balance sheet and pursue growth opportunities in the nearer term,” Mike added.
Shares in Otto Energy are trading steady at 1 cent per share at the close of market on Wednesday.