Otto Energy reports strong hydrocarbon pay zones at SM71 lease in Gulf of Mexico

Otto Energy (ASX: OEL) has come out of a trading halt to announce a significant hydrocarbon discovery within the South Marsh Island 71 (SM71) lease in the Gulf of Mexico.

Drilling intersected 40 metres true vertical thickness of net hydrocarbon pay in the primary D5 sand interval.

The F5-ST well, operated on behalf of the joint venture by Byron Energy, was designed to accelerate oil production at SM71.

Preliminary data

Based on a preliminary evaluation of logging-while-drilling gamma ray and resistivity data acquired over the prospective portions of the well-bore, hydrocarbons were identified in the D5, I2 and I3 sand intervals.

While most of the drilling operations proceeded smoothly, Otto’s acting chief executive officer Phil Trajanovich noted that a bypass hole would need to be drilled following a technical and mechanical issue when retrieving the drill string.

After repeated attempts to free the stuck pipe, it was decided to cut the drill pipe and cement the well below 1,120m measured depth.

Bypass process

“Otto Energy is encouraged by the net pay encountered in the D5, I2 and I3 sand intervals, though it is disappointing to have encountered drilling issues after this pay was logged,” Mr Trajanovich said.

“We have elected to participate in the bypass proposal and look forward to making progress redrilling and logging these intervals in a new hole close to the previously logged pay.”

Otto Energy and Byron Energy each hold a 50% working interest and a 40.625% net revenue interest in the SM71 lease.

Costs for the well were reduced as it was side-tracked from the existing F5 well-bore, which Otto participated in during 2020 and is currently temporarily abandoned.