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Wednesday, May 25, 2011

Otto to Commence Abandonment Ops at Duhat Sidetrack

- Otto to Commence Abandonment Ops at Duhat Sidetrack

Wednesday, May 25, 2011
Otto Energy Ltd.

Otto provided the following update on the progress of the Duhat-1A sidetrack well, located in the Philippines.

Since the last update, the well was drilled to 321 m TVD (True Vertical Depth) in the 12 ¼” section before becoming stuck, again due to unstable hole conditions (similar to those experienced in the Duhat-1 nearby well).

The well was subsequently plugged back to 200 m TVD and abandonment operations have commenced.

Information obtained during drilling from both Duhat-1 and the Duhat-1A sidetrack are very encouraging. In both wells, high general background gas levels have been observed during drilling, consistent with the presence of an oil generative area. These high gas levels, in formations of relatively weak rock strength coupled with unexpected shallow overpressure in the Miocene Tagnocot interval require further study prior to the recommencement of exploration in the block.

Drilling further ahead in Duhat-1A is now considered to be imprudent on safety grounds and abandonment is now in progress.
Otto Energy Ltd and its partners in SC-51 are excited by the geotechnical results of this initial drilling campaign and further work will be programmed once the data from recent operations have been fully analyzed.

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