Definitive agreements have been executed for Otto to go to 22.5% working interest Large prospect to be drilled in early 2019
Otto Energy Limited (ASX:OEL) (“Otto” or the “Company”) is pleased to advise that, via its wholly owned subsidiary Borealis Alaska LLC, it has executed definitive agreements with Great Bear Petroleum, along with the Consortium Partners, 88 Energy (Captivate Energy Alaska, Inc) and Red Emperor, to acquire the majority of Great Bear's working interest in exchange for drilling a commitment well on the Western Blocks prior to 30 May 2019.
The Western Blocks contain a 3D seismic defined oil prospect in the successful Nanushuk play fairway with a gross best estimate prospective resource volume of 400 MMbbls and a geological chance of success in the range of 25-30%. Otto's 18.75% net revenue interest (before Great Bear 10% back in – refer table below) in the prospect would be 75 MMbbls. Please note that information in relation to the prospective resources was first released on 25 June 2018.
Prospective Resource Cautionary Statement: The estimated quantities of petroleum that may be potentially recovered by the application of a future development project relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration, appraisal and evaluation are required to determine the existence of a significant quantity of potentially movable hydrocarbons.
Pursuant to the agreement, the Consortium Partners have funded their share of a US$3,000,000 performance bond to the State of Alaska and a US$500,000 cash payment to Great Bear as part of the consideration for the acquisition of the working interests in the Western Blocks.
The details of the working interests are described in the below table:
Current Working Interest
Working Interest (before back-in)
Paying Interest (before back-in)
Net Revenue Interest* (before back-in)
Working Interest (after back-in)
88 Energy (Drilling Management)
Great Bear Petroleum**
State of Alaska
*Government royalty of 16.67%. **Currently Operator of record on leases.
For further details related to the transaction, please refer ASX announcement dated 25 June 2018. Please note that information in relation to the prospective resources was first released on 25 June 2018.
Internal interpretation by incoming operator 88 Energy of the 3D seismic over the Western Blocks has confirmed the original interpretation by Otto's technical team, which identified the 400 million barrel prospect. A location to optimally test the prospect has been selected and permitting is underway, ahead of scheduled drilling in the first quarter of 2019.
Visit source siteOtto Energy88 EnergyAlaskaDrillingASXGreat Bearonshore