Otto Energy acquires interest in ST 235 in the Gulf of Mexico


WEST PERTH -- Otto Energy Limited has announced that Houston Energy has been awarded the South Timbalier 235 (ST 235) lease under Gulf of Mexico Central Lease Sale 249.

Houston Energy bid a total $210,999 in relation to the ST 235 lease and was the apparent high bidder in August 2017 as part of Central Lease sale 249. Under BOEM bid adequacy procedures, an apparent high bid is subject to a bid adequacy review which can take up to 90 days. This review process has now been completed and Houston Energy have been awarded the lease.

The lease is adjoining with and immediately south of South Timbalier 224 (ST 224) lease where Otto Energy is currently participating in the drilling of the highly prospective ST224 #1 exploration well.

Under an agreement with Otto Energy and others involved in ST 224, Otto Energy has the right to acquire a 25% working interest in the lease from Houston Energy and intends to exercise this option.

Maximum water depth within ST 235 is 60 m(197 ft).

In July 2017 the U.S. Federal Government announced that a 12.5% federal royalty rate would apply for subsequently awarded leases that sit in less than 200 m of water (656 ft), compared to the previous prevailing rate of 18.75%. ST 235 qualifies for the 12.5% rate, further enhancing economics.

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