Otto Energy abandons Duhat 2 drilling

Australian energy firm Otto Energy Ltd. has decided to terminate its exploratory drilling at the Duhat 2 well in San Isidro, Leyte for safety reasons.

In a disclosure to the Australian Stock Exchange, the company said that after reviewing the flow and pressure information it obtained since drilling started, "forward plan is to plug and abandon the well.”

“This is primarily a safety based decision as the identified risks  of drilling ahead in this location have been deemed unacceptable which has been supported by the Department of Energy," it said.

Otto Energy is the operator and holder of 80 percent of the Service Contract 51 joint venture, which includes the Duhat 2 site. The remaining 20 percent is held by Trans-Asia Oil and Energy Development Corp., Alcorn Gold Resources Corp. and PetroEnergy Resources Corp.

The drilling at Duhat 2 was supposed to continue for 31 days, but the day after drilling operations started on July 24 high-pressure brackish water with high chloride content started flowing from the well.

"The presence of a high pressure, water bearing, permeable section was not seen in the Duhat-1 well located some 440 meters away. Seismic data through both the Duhat-1 and Duhat-2 wells provided no warning of the  presence of this overpressure interval," the company said.

The company said that Duhat 2 is estimated to contain up to 88 million barrels of oil and is one of “several growth catalysts” in its portfolio. — BM, GMA News