Location: Offshore Gulf of Mexico
Area: 18.31 km2
Otto’s Interest: 50.00% - Earning via staged farm-in with Byron Energy Inc. (Operator)
Byron rebid lease, Vermillion Area Block 232 (“VR 232”), at the Gulf of Mexico, Outer Continental Shelf (“OCS”) Lease Sale 250 (“Lease Sale 250”) held in New Orleans, Louisiana on 21 March 2018.
Byron was the apparent high bidder on the block. An apparent high bid is subject to OCS bid adequacy review and under the BOEM rules may be rejected if deemed inadequate. The BOEM review process can take up to 90 days.
If VR 232 is ultimately awarded to Byron, Otto will have a right to acquire a 50% WI / 43.750% NRI. Should Byron ultimately not acquire VR 232, Otto will have a right instead to acquire a 50% WI of SM 74, on same terms, for an amount equal to a gross one hundred thirty-three percent (133%) of Otto’s fifty percent (50%) WI share of certain acquisition costs, including the Dry Hole Costs of an Initial Test Well (as defined in the Participation Agreement between Byron and Otto) incurred by Byron plus an amount equal to a gross fifty percent (50%) of certain other acquisition expenses (as defined in the Participation Agreement) incurred and paid by Byron.
Otto’s rights to acquire one such newly acquired asset under the Participation Agreement has been satisfied by the participation rights noted above and have otherwise expired effective 31 March 2017.
The SM 74 or VR 232 block will increase Otto’s footprint near its existing SM 71 discovery.