Otto Energy Ltd. reports that the Hercules 205 jackup drilling rig has been mobilized to the SM-6 #2 well location in the Gulf of Mexico. The company says it was advised of the mobilization by Byron Energy Inc., the operator of the project.

The rig move is expected to take one day. The well is expected to spud about six days after mobilization. Once on location, the rig will install new 30-in. conductor guides on the existing 72-in. caisson, drive the 30-in. conductor pipe, and then commence drilling the SM-6 #2 well.

The SM-6 #2 well is the first well to be drilled as part of Otto’s farm-in transaction with Byron announced in December 2015. The SMI-6 lease is part of a portfolio of low-cost, high-chance of success, conventional oil and gas opportunities located both onshore and offshore the Gulf of Mexico, which Otto has the option to participate in as part of the transaction.

Otto’s Managing Director Matthew Allen said: “We are very pleased to have commenced operations in respect of the SM-6 #2 well. The well location is situated in shallow water and surrounded by existing infrastructure. In the success case, the well will be completed for production with development by way of low-cost tie in, meaning that the project is economically robust even in the current low oil price environment. With production likely to commence around mid-2017, any improvement in oil price conditions will yield significant further value.”