With a drill rig contract in hand, Otto Energy (ASX: OEL) will embark on drilling exploration well Duhat-1 in the first comprehensive structural test conducted on the island of Leyte in the Philippines.
The area is well documented for oil seeps and substantial exploration prospects.
Drilling is expected to commence by early March of 2011 and will take about 27 days to complete.
The Duhat-1 well is designed to reach a total vertical depth of 1,000 metres and will test the hydrocarbon potential of the San Isidro anticline, primarily in Miocene Tagnacot Formation limestone and sandstone targets.
The area has an estimated resource potential of 1 to 62 million barrels recoverable oil.
The drilling of the Duhat-1 well was approved by the SC51 Joint Venture (Otto 80%) and the Philippines Department of Energy.
Production from the Galoc Oil Field located offshore the northwest Palawan basin provides cash flow for the company and commenced production in October 2008.
Otto is currently one of the largest landholders of prospective acreage in the Philippines, through the company’s wholly-owned subsidiary NorAsian Energy Ltd.