Perth, Sep 23, 2008 AEST (ABN Newswire) - Otto Energy Limited (ASX:OEL)(PINK:OTTEF) is pleased to advise that the Company has estimated the contingent resources at 8.5bcf (mid case), in the Edirne Licence, located in the Thrace Basin of Western Turkey.
The play concept and geological interpretations to date have resulted in six discoveries made in the six structures drilled. The as yet undrilled structures also have the potential for a further 15.7 bcf of gross prospective resources (mid case).
Otto's updated estimate on the volumetric Gas Initially In Place ("GIIP") ranges for the prospects are stated below with recoverable estimates based on a 70% recovery factor (RF). The resource estimates include the results from the recent drilling program completed in July 2008. Whilst robust, these figures are internally generated by Otto and have not yet been independently certified.
---------------------------------------------Discovered Gas Contingent Resources Initially In Place Recovery Factor (70%)(GIIP) ---------------------------------------------Low Case 5.3 bcf 3.7 bcfMid Case 12.2 bcf 8.5 bcfHigh Case 20.4 bcf 14.3 bcf------------------------------------------------------------------------------------------Prospective GIIP Prospective Resources(undiscovered) Recovery Factor (70%)---------------------------------------------Low Case 7.4 bcf 5.2 bcfMid Case 22.4 bcf 15.7 bcfHigh Case 58.5 bcf 41.0 bcf---------------------------------------------
The main reservoir target in the Edirne Licence is at depths of between 250 and 500 metres, with the hydrocarbon accumulations being modest in size, but with proven multiple pay zones.
All six discoveries on the licence are in close proximity to each other and there are also a number of to yet-to-be drilled leads and prospects on the block with amplitude anomalies. Such proximity will allow cost-effective multiple-pool development of the field quickly and at relatively low-cost.
All four gas discoveries drilled in the 2008 drilling campaign encountered substantially greater net gas pay than the pre-drill estimate, with three of the wells testing at rates of between 1.93 and 3.8 mscf/d (one well was not tested at this time as it will not be part of the initial development; it will be tested in the next drilling program). These are excellent flow rates given the shallow pools and hence low reservoir pressures.
The project is proceeding rapidly to commercialisation with Front End Engineering and Design (FEED) study underway. First gas sales are expected mid-2009. Based on production rates of 8-10MMscf/d, it is estimated the cash flow stream net to Otto will be approximately US$5-10 million per year once on production.
Otto CEO Alex Parks said, "The gross resource estimates of 24.2 Bcf (mean case), gives us confidence that we have a commercial gas project capable of development. With Turkey's robust domestic gas price of over US$14.00 per thousand cubic feet, this development should prove very profitable and we look forward to it being Otto's second producing asset commencing approximately mid 2009. "
The partners in the Edirne Gas Project are Otto Energy (35%) and Joint Operators Incremental Petroleum (55%), and Turkish partner Petraco (10%).
GLOSSARY
TOTAL GAS INITIALLY IN PLACE (GIIP)
The quantity of gas estimated to be contained in known accumulations, plus those estimated quantities in accumulations yet to be discovered. Gas-initially-in-place quantities may constitute potentially recoverable resources since the estimation of the proportion which may be recoverable can be subject to significant uncertainty and will change with variations in commercial circumstances, technological developments and data availability.
CONTINGENT RESOURCES
The quantities of gas which are estimated to be potentially recoverable from known accumulations, but are not yet considered commercially recoverable.
RECOVERY FACTOR
The percent of the in-place gas discovered that is technically recoverable.
Contact
Jill Thomas
Investor Relations Manager
Tel: +61 (8) 6467 8800
Mobile: +61 439 440 016
Email: thomas@ottoenergy.com
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