Reflect CEO David Lamb (left) with Otto Marine CEO Lee Kok Wah. Photo courtesy of Otto Marine

OTTO MARINE’S high-spec offshore vessel charter strategy appears to be well received by the market.

39.2 million Otto Marine shares changed hands on 16 Nov, a week after the leading offshore vessel builder announced plans to integrate upstream with its first seismic vessel.

Ottto Marine (market cap: S$632 million) has tied up with a team of geophysics veterans to form Reflect Geophysical, which charters its seismic vessel for collecting geophysical survey data that is used to analyze potential petroleum reservoirs.

The joint venture is 74% owned by Otto Marine ( and has secured a high-profile contract from New Zealand’s Ministry of Economic Development to acquire over 7,000 km of 2D seismic data in the Pegasus Basin.

This first contract is estimated to be worth about US$10 million for work carried out between Nov 2009 and Feb 2010.

Since 2005, the New Zealand government has acquired over 14,000 kilometers of seismic data and given this away free to exploration companies to promote block offers.

This initiative has been hugely successful, opening up new areas to explorers and has led to companies such as Exxon Mobil, OMV, PTTEP, Origin Energy, AWE, Hyundai and Mitsui taking up new acreage.

Trading volume surged after Otto Marine announced its seismic vessel JV.

Being in New Zealand waters puts Reflect on the radar for new contracts from offshore exploration companies, according to the joint venture’s CEO, Mr David Lamb.

Mr Lamb is also excited that this summer, New Zealand is heading into its busiest offshore drilling program with the Kan Tan IV and Ensco 107 drilling rigs, which are committed to drill at least 7 wells.

If any of these wells are successful, then he forsees further seismic data will be urgently required.

In 2008, New Zealand gained sovereign rights to an area of seabed three times the size of France.

This has extended New Zealand’s entire offshore area to 4 million square kilometers.

Interest in the stock is now revived, after languishing for half a year with volume seldom exceeding several million shares a day
OSK-DMG also initiated coverage on the stock last week (26 Nov) with a ‘buy’ call and target price of 52.5 cents.

This translates to a 38% upside based on the stock’s last close price at 38 cents.

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