Under the conditional farmin agreement with Canadian-based Oromin Energy, Ottoman will fund a US$1.4 million drilling program consisting of two or three wells planned for mid-next year, it said.
Managing director Jaap Poll told EnergyReview.net that Argentina could be the company maker Ottoman’s been looking for.
“The structure we’re looking at could contain hundreds of millions of barrels,” Poll said.
“And with over 30% interest, imagine what this could do for a company like Ottoman.”
Poll said that Ottoman’s core area in Turkey was unlikely to lead to a major find.
“Turkey’s our ‘bread-and-butter,’ with its small targets that have high chances of success,” Poll said.
“But Turkey’s never going to excite. It’ll never be our company-maker. Turkey provides us with the cashflow to drill other projects without us having to go to the shareholders.”
Poll said Ottoman’s assets in the Philippines did have company maker potential, but were proving too much of a financial liability for the junior company to wear.
“The Philippines was a good opportunity, but we didn’t like the associated costs – it would have diluted our company too much,” he said.
“This was why we decided to merge our assets with our partners’ into the one company – NorAsian.”
For US$1.4 million in Argentina, Ottoman will pay for drilling up to three exploration wells to a 1,250-metre depth on the crest of the identified Santa Rosa dome – a 220square kilometre structure mapped during recent seismic surveys, according to Poll.
“For a relatively modest cost and 32% of the deal, we’ve good a good chance of significant oil production,” he said.
While the western part of the Cuyana basin has been estimated to have originally contained 1.2 billion barrels of oil, the eastern part – containing the 7,694 square-kilometre Santa Rosa block – has been largely unexplored, according to Western Australian-based geoscientist Peter Kirk.
“The prospect to be drilled, the Santa Rosa dome, has potential to be a very sizable resource, which could contain several hundred million barrels of oil in an area with relatively low exploration and development costs,” Kirk said in an independent assessment.
Ottoman also has the option to acquire an additional 8.76% interest in the block, bringing its total stake to 41.42%, by paying Oromin a further US$897,381.
