Otto Energy Limited (ASX:OEL) Development Drilling To Commence - Thrace Basin, Turkey

Monday January 5 1:20 PM

Perth, Australia, Jan 5, 2009 - (ABN Newswire) - Otto Energy Limited (ASX: OEL.AX)(PINK:OTTEF) through its wholly owned subsidiary Edirne Energy Ltd ("Company" or "Otto"), is pleased to announce that the Ikihoyuk-2 development well in the Edirne Licence in Turkey is expected to be spudded on 7 January 2009.

The objective of the drilling programme, undertaken in conjunction with Joint Venture partners Incremental Petroleum and Petraco, is to confirm and develop the western extent of gas bearing Danismen and Osmancik reservoirs within the Ikihoyuk structure.

In 2008, the Joint Venture had considerable drilling success and the Ikihoyuk-2 well is designed to produce gas from a proven reservoir defined by the 2008 drilling campaign.

The gas fill has been proven by the discovery well Ikihoyuk-1, which flowed at dry gas rates of up to 3.8 MMscf/d. The reservoir targets are sandstone units of the Osmancik and Lower Danismen Formations. Additional gas bearing reservoirs may exist at shallower levels.

The current planned total depth is approximately 500 metres. The well will be drilled with Incremental's rig and is expected to take approximately 12 days to drill. Both wells would then be tied back to a central facility.

Commercialization of the Edirne gas project is progressing, with first gas sales anticipated in the second half of 2009. Negotiations are ongoing with three substantial Turkish parties to purchase the gas. Bids have been received for all long lead items.

The Joint Venture has resolved that the two exploration wells initially planned to be drilled in this drilling programme be deferred. The two deferred exploration wells are not required for the first planned phase of production. A 100 sq km 3D seismic survey initially planned for mid 2009 has also been deferred.

The Company will provide further ASX announcements as results from the current drilling programme becomes available.

Joint Venture Interests in the Edirne Permit:
Otto Energy (Edirne Energy Ltd) 35%
Incremental Petroleum (PEMI) 55% (Joint operator)
Petraco Petroleum 10% (Joint operator)

For more information about Otto Energy Limited visit www.ottoenergy.com

About Otto Energy:

Based in West Perth, Otto Energy Limited (ASX: OEL.AX) is an international exploration and production company that has assembled a balanced portfolio of oil and gas assets in the Philippines, Turkey, Italy and Argentina.

As of mid 2008, Otto expects to receive revenue from production at the Galoc Oil Field in the Philippines which will be used to fund further development and exploration across all of the Company's highly prospective assets. Otto is opportunity rich with an exploration portfolio that includes additional discoveries that are under development, approximately 20 drillable prospects covered by new 3D seismic and well over 60 exploration leads which are being matured as follow-up potential. Consequently, Otto has an active exploration and appraisal drilling program in 2008/2009.


Contact:
Jill Thomas
Investor Relations Manager
Tel: +61-8-6467-8800
Mobile: +61-439-440-016
Email: thomas@ottoenergy.com
 


Source:

Otto Energy

Copyright (C) 2009 ABN Newswire. All rights reserved.
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