Australian oil and gas company Otto Energy Ltd. is adding to its position along the Texas Gulf Coast.

According to recent company release, Otto agreed to participate in two exploration prospects located onshore Texas in Colorado and Lavaca counties. Participation in the two prospects, which will tests the regionally proven Wilcox play, is expected to cost Otto roughly $1.1 million, both to be funded from Otto’s existing cash reserves.

“Otto is excited to be participating in these two onshore prospects, which deliver limited cost exposure but excellent potential leverage to the current strong gas price environment,” Otto Energy Executive Chairman Mike Utsler commented in the release on Oct. 14. “Both prospects have strong associated liquids, and significant upside.”

Otto already has a portfolio of production, exploration and appraisal assets in the U.S. Gulf of Mexico, where the company exploration activities has led to the discovery of two of the 12 largest Gulf of Mexico and onshore fields, according to the company website. The company also holds an equity interest in Alaskan-focused oil and gas producer Pantheon Resources. 

The prospects Otto recently acquired a participating interest include the Schindler Well in Colorado County and the Eaves Well in Lavaca. In addition to the Wilcox, the Eaves well will also test a shallow Yegua objective.

In the release, Otto said it assessed the Schindler Prospect as having unrisked mean success volumetrics of 21 Bcf of gas and 804,000 bbl of condensate at a 54% geological probability of success. The company projects that the Eaves Prospect has unrisked P50 success volumetrics of 2.5 Bcf of gas and 12,500 bbl of condensate at a 75% geological probability of success.

“We continue to screen a large number of opportunities against our targeted risk‐return evaluation framework,” Utsler added in the release.

Both wells are to be drilled on a “turn‐key” basis to minimize drilling cost exposure, according to the release, and are planned to be drilled during the fourth quarter of calendar year 2021. If successful, the wells will be completed and connected to nearby pipelines.

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