Otto Energy has entered into a joint venture with Talos Energy which will see it earn a 16.67% working interest in the Green Canyon 21 (GC-21) lease in the Gulf Mexico through paying 22.22% of the cost of the drilling of the 'Bulleit' appraisal well in GC-21. The well will be drilled by Talos Energy, a highly experienced Gulf of Mexico operator based in Houston. Talos has the Noble Don Taylor drillship contracted to undertake thedrilling of the Bulleit prospect with drilling expected to start in the middle of Q2 2019.
The Company is undertaking a capital raising for approx.y A$31 million via an A$11 million Placement to institutional and sophisticated investors and a fully-underwritten, 1 for 5 acceleratednon-renounceable Entitlement Offer to raise ~A$20 million. The funds raised will be used in conjunction with cash flows from Otto’s 50% owned SM 71 oil field and future cash flows from the Lightning development to fund Otto’s US$9.0 million share of the GC-21 drilling program, redeem US$8.1 million of the convertibles notes currently on issue and for working capital including contingent development wells.
Otto’s Managing Director, Matthew Allen, commented: 'Otto is today taking another significant step in accelerating its business growth in the Gulf of Mexico. Participation in drilling of the Green Canyon 21 'Bulleit' oil discovery, provides Otto access to one of the best drilling opportunities that the Otto team has screened with a high quality and proven operator in Talos Energy.
Otto has successfully identified and captured farm-in’s to some of the best opportunities available within its core focus area since establishing the Gulf of Mexico only three years ago. Discoveries at the South Marsh Island 71 and Lightning projects have established Otto’s production and cashflow generating base with significant, high-impact drilling planned for the remainder of 2019 that is set to continue the rapid delivery on our stated strategy'
