Otto Energy (ASX:OEL) has received US$21.3 million from BHP Billiton (ASX:BHP) in relation to drilling costs for the recent Hawkeye-1 exploration well in the Palawan Basin offshore Philippines.
This represents the bulk of BHP’s contribution of up to US$24.5 million with the final payment to be received this quarter once total well cost is confirmed.
Hawkeye-1 intersected hydrocarbons between 2,710 metres and 2,737 metres in reservoir of variable quality.
Cuttings provided indications of fluorescence, usually an indicator of liquid hydrocarbons.
Separately, the company made a final payment of US$7 million to Great Bear Petroleum to earn an 8% and 10.8% working interest in two areas of Alaskan North Slope acreage.
Otto will participate in a future drilling program with a total capped exposure of US$6 million in up to three wells.
The company currently has over US$30 million in available funds to pursue its growth strategy, or cash backing of about A$0.04 per share.
This is well above OEL’s last traded price of $0.029.
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