By Juzel L. Danganan
MANILA, Aug. 17 (PNA) – Australian-listed Otto Energy Ltd, operator of service contract no. 55 off Palawan, said on Monday it found Hawkeye-1 well was not commercially viable.
“The Hawkeye-1 exploration well has proven the existence of hydrocarbons in SC55. The hydrocarbon size discovered is however at the very low end of expectations and is not economic to develop,” Otto Energy managing director and chief executive officer (CEO) Matthew Allen said in a disclosure from the Australian bourse Monday.
The upstream oil and gas company noted the well, which had reached its target depth of 2,920 meters, will be plugged and abandoned. It is located in offshore Palawan.
Otto Energy reported hydrocarbons were logged between 2,710 meters and 2,737 meters, which had a reservoir sequence of good quality from log observations.
Otto Energy’s partner Palawan 55 Exploration and Production Corp. told the Philippine Stock Exchange (PSE) that the log interpretation on the rock below 2,737 meters had good quality reservoirs that were water-saturated.
Palawan 55 added Otto Energy would evaluate the implications of the findings from Hawkeye-1 to the prospectivity of the Cinco well and the other leads in the block.
The company added the drilling phase was executed smoothly, ahead of schedule and also ahead of budget. It had an estimated drilling cost of USD 30-35 million.
However, with the well not commercially viable, Otto Energy said it would move on drilling its other assets in Alaska and Tanzania.
Earlier, the oil and gas company reported that Hawkeye-1 was well spud, with the metallic pipe casing cemented into place on July 31.
The firm holds the majority share at 83.18 percent in SC 55, while Palawan 55, a subsidiary of Trans-Asia Petroleum Corp., has a 6.82 percent participating interest in the petroleum block.
Otto Energy is an international oil and gas company, engaged in exploration, development and production. It has projects in the Philippines, Alaska and Tanzania. (PNA)