South East Asia - Philippines
Red Emperor has entered into a Farmin Agreement with Otto Energy Philippines Inc. (a wholly owned subsidiary of Otto Energy Ltd) to farm in to the highly prospective offshore Philippines Block, Service Contract 55 (“SC55”).
SC55 is located in the southwest Palawan Basin, covers an area of 9,880km2 and was awarded to Otto Energy Investments Ltd (formerly NorAsian Energy Ltd) in 2005. It is a deep-water block in the middle of a proven regional oil and gas fairway that extends from the productive offshore Borneo region in the southwest to the offshore Philippine production assets northwest of Palawan.
SC55 contains a number of distinct exploration play types including the Hawkeye turbidite clastic prospect and the material Cinco carbonate gas/condensate prospect, as well as a number of follow-up leads. The permit provides a material opportunity and a series of possible drill targets in an exploration campaign that will be undertaken during the remaining term of the service contract.
Red Emperor will earn its 15% working interest in SC55 by participating in the upcoming Hawkeye-1 exploration well that will test the significant hydrocarbon potential of the Southern Palawan Basin.
Drilling is expected to commence in Q3 2015 with an initial target of 112 MMbbls of Best Estimate Prospective Resources. Otto Energy has entered into a Letter of Intent with Maersk to secure the Maersk Venturer ultra-deepwater drillship to drill the Hawkeye-1 exploration well.
The Hawkeye prospect is covered by extensive and high quality 3D seismic which indicates the strong chance of a gas cap sitting above a sizeable oil leg (>100m). Independent report from Jordan & Pay Exploration Consultants has described the prospect as a “robust, attractive exploration target with a good geological chance of success (32%)”.
Cinco is a further drill ready gas target that exists within Block SC55, assessed by the Operator to have Gross Best Estimate Prospective Resources of 1.6Tcf of recoverable gas.