• Otto to participate in drilling the high-impact Bivouac Peak gas/condensate prospect at 40% WI
• 32 MMboe1 high quality, amplitude supported conventional gas/condensate prospect in the highly productive Atchafalaya Bay transition zone of Southern Louisiana
• Drilling to commence late August 2018 and is expected to take approximately 75 days
• Rapid tie-back to production and future follow up Bivouac Peak Deep prospect in a success case

Otto Energy Limited has elected to participate in the initial test well, Weiss-Adler et. al. No. 1, on the Bivouac Peak East prospect which is expected to commence drilling from a barge-mounted rig in the second half of August 2018. The estimated cost for the 18,294 ft MD/18,000 ft TVD well is US$10.8 million (100% dry hole cost). Otto will earn a 40% working interest by paying 53.33% of the costs of the well to reach the earning depth or up to a cap of US$5.33 million, whichever occurs first, after which Otto will revert back to paying 40% of all future costs.

The well will be funded from internal cash flow from Otto’s SM 71 oil project which is strongly cash flow positive generating free cash for Otto of over US$3 million per month.

The operator has substantially progressed the permitting and rig procurement activities that will allow drilling to commence in mid-August. With Otto’s positive election into the well, the joint venture has now committed to all of the available equity and funding to allow the well to progress.

Otto’s Managing Director, Matthew Allen, commented: 
“Otto is excited to be participating in the highly prospective Bivouac Peak East exploration well which will commence drilling in August 2018. This well continues a program of Gulf Coast exploration drilling with the operator of Otto’s flagship Gulf of Mexico SM 71 development project, Byron Energy.

“Bivouac Peak East is a high quality, amplitude supported conventional gas/condensate prospect that sits in a very rich basin with nearby production analogues. Success at the initial exploration well would result in production in a very short timeframe and complement Otto’s growing position in the Gulf of Mexico.”