Red Emperor signs Philippino Farm-in with Otto Energy

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THE ROADHOUSE BOWSER: Red Emperor Resources (ASX: RMP) has signed a Farm-in Agreement with Otto Energy Philippines, a wholly-owned subsidiary of Otto Energy (ASX: OEL) to farm in to the offshore Philippines Block, SC5.

Under the terms of the deal Red Emperor will earn a 15 per cent working interest in offshore Philippines Block, SC55, by participating in the upcoming Hawkeye-1 exploration well, which is designed to test hydrocarbon potential of the Southern Palawan Basin.

Red Emperor said Otto Energy, as operator, is anticipating a spud date for Hawkeye-1 early in Q3 2015 and is targeting a structure assessed to contain in excess of 100 million barrels (MMbbls) of Gross Best Estimate Prospective Resources (approx. 15MMbbls net to RMP).

The company declared commercial success in the Hawkeye well would unlock a sizeable region for exploration, the heart of which is covered by Block SC55.

A further drill-ready gas target (Cinco) also exists within Block SC55, which has been assessed by Otto to have Gross Best Estimate Prospective Resources of 1.6 trillion cubic feet (208 billion cubic feet net RMP) of recoverable gas.

Red Emperor will carry out a $2.13 million placement, after which it anticipates to be fully funded to participate in the Hawkeye-1 exploration well and other potential opportunities.

“The Board of Red Emperor are delighted to have been able to complete on a transaction that has the potential to completely redefine the company,” Red Emperor Resources managing director Greg Bandy said in the company’s announcement to the Australian Securities Exchange.

“After extensive review of many potential projects, the Red Emperor Board have not only taken advantage of a depressed oil market that has seen drill rig rates halve and farm-in promotes reduce significantly, it has concluded the robustness of the Hawkeye prospect, and leverage to success in follow-up potential, a compelling investment opportunity for Red Emperor and its shareholders.”

Website: www.redemperorresources.com