Otto Energy Limited (ASX: OEL) has announced promising results from its F5-ST Bypass well at the South Marsh Island 71 (SM 71) lease in the Gulf of Mexico shelf.
The well, operated by joint venture partner Byron Energy Inc., reached a depth of 7,219 feet Measured Depth (MD) and 6,439 feet True Vertical Depth (TVD) as of October 27, 2024.
Preliminary evaluation of Logging While Drilling (LWD) data revealed significant hydrocarbon presence across multiple sand intervals:
- I2 Sand: 14 feet of net hydrocarbon pay
- I3 Sand: 24 feet of net hydrocarbon pay
- D5 Sand: 133-177 feet of net hydrocarbon pay
These results indicate substantial potential for oil production at the SM 71 lease.
Otto Energy has elected to participate in the completion of the F5-ST bypass well, with operations already underway.
The company estimates an additional cost of $3 million for well completion and hook-up to the SM 71 F platform.
Key steps in the completion process include:
- Installation of 7″ production casing
- Running 2 7/8″ production tubing
- Implementing sand control completion for the D5 sand
The completion process is expected to take approximately 14 days, with an additional seven days anticipated to bring the well into production.
Despite the additional costs incurred during drilling and completion, Otto Energy remains optimistic about the economic potential of the well.
Phil Trajanovich, Acting CEO of Otto Energy, stated: “The company believes the results from the last few days provide a robust economic case for continued participation in the bypass well and completion of this well.”
Otto Energy and Byron Energy each hold a 50 per cent working interest (WI) and 40.625 per cent net revenue interest (NRI) in the SM 71 lease.
With production expected to commence in November 2024, Otto Energy anticipates a positive impact on its operations.
The company has committed to providing further updates on the well’s progress as it moves towards production.
This development represents a significant milestone for Otto Energy in its Gulf of Mexico operations and could potentially lead to increased oil production and revenue streams in the near future.
