Home Sports Otto Energy (ASX:OEL) temporarily suspends operations at Green Canyon 21 well, Mexico...

Otto Energy (ASX:OEL) temporarily suspends operations at Green Canyon 21 well, Mexico – The Market Herald

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  • Otto Energy ( OEL ) is temporarily suspending operations at its Green Canyon 21 (GC21) well in Mexico following “operational issues” in the area
  • The company says weather events such as currents and Hurricane Ian in the Gulf of Mexico forced it to demobilize the rig from the site
  • Otto says this gives it the opportunity to purchase the additional equipment needed to turn on the well, with first production scheduled for the first quarter of 2023.
  • Otto shares fell 11.8 percent to trade at 1.5 cents at 12:58 a.m. ET

Otto Energy ( OEL ) has temporarily suspended production at the Green Canyon 21 (GC21) well in Mexico following “operational issues” in the area.

The company said weather events such as currents and Hurricane Ian in the Gulf of Mexico forced it to demobilize the rig from the site. In particular, Otto said he discovered a problem with the hull suspension caused by strong loop currents.

Therefore, the company called for the demobilization of the drilling rig from the site and will now work on the purchase of additional equipment needed to bring the well into operation.

First production of the GC21 is scheduled for the first quarter of 2023.

In addition, Otto’s current cost estimate for the field has exceeded initial expectations and is now expected to be between US$12 million and US$16 million (AU$19 million and AU$25 million). The company’s previous cost estimate (AFE) was US$5.9 million.

However, Executive Chairman Mike Astler said that with zero hedging and no debt, Otto is well-positioned to “take full advantage” of the production growth that has been achieved by its recent asset growth.

Otto shares fell 11.8 percent to trade at 1.5 cents at 12:58 a.m. ET

https://themarketherald.com.au/otto-energy-asxoel-temporarily-suspends-operations-at-green-canyon-21-well-mexico-2022-10-14/

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