AUSTRALIA-BASED Otto Energy remains confident the farmout of Service Contract (SC) 55 drill project will push through even if the heads of agreement with BHP Billiton Petroleum (BHBP) had already lapsed.
Otto said discussions with BHPBP continue despite the lapse of the heads of agreement.
Otto said the draft contract with BHPBP was conditional on a number of obligations before the end of March, including farm in and joint operating agreements as well as the necessary government and joint-venture approvals.
In December last year, Otto signed a conditional contract to farm out 60% of its interest in SC 55 for which BHPBP agreed to reimburse back costs and pay the full cost of a three-dimensional (3D) seismic program and the drilling of two deep water exploration wells.
SC 55 covers 9,000 square kilometres of an oil block in the southwest Palawan Basin in the middle of an oil and gas fairway that goes from the productive region offshore Borneo to the Philippine production assets in the northeast.
Otto estimates the value of the farmout to cost about $150 million.
“This farm out is in line with Otto’s exploration strategy in the Philippines, and BHPBP’s interest and involvement in this project is a strong endorsement of our belief in the petroleum potential of the Philippines,” Parks said.
Parks also noted that BHPBP is one of the largest and most successful companies in the resources sector and in the event of a discovery of either oil or gas, the company could not hope for a better partner to operate such a development.
He also said that they anticipate the 3D seismic survey will be carried out and interpreted by next year and drilling to follow in 2010.
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