VR 232

Location:                   Offshore Gulf of Mexico

Area:                          18.31 km2

Otto’s Interest:        50.00% - Earning via staged farm-in with Byron Energy Inc. (Operator)

VR 232 is adjacent to Otto’s 50% owned SM 71 oil field and adds drilling opportunities which increase Otto’s potential upside around the SM 71 facilities. The lease is subject to a 12.5% Federal Government royalty. 

The Operator, Byron Energy, has mapped a gas and gas condensate prospect on the block with in-house calculated gross prospective resource potential of 11 Bcf and 170,000 barrels.  This prospect could be tested from Otto’s SM 71 F platform. There are currently no plans to drill VR 232 until production levels at the platform would allow a successful VR 232 well to be produced efficiently.  The Operator has also identified two other prospects in VR 232 which require further geophysical evaluation before a drilling decision is made.

Byron evaluated this blocks with the same high-quality Reverse Time Migrated 3D seismic data and proprietary Inversion processed seismic data used in the discovery of oil and gas at SM 71 in 2016. Upon transfer, Otto’s working interest will be 50% and net revenue interest will be 43.75%.

Pursuant to the terms of a Participation Agreement, Otto must pay an amount equal to a gross one hundred thirty-three percent (133%) of Otto’s fifty percent (50%) interest share of lease acquisition costs and the initial test well (dry hole costs) plus a gross fifty percent (50%) of other past costs paid by Byron.