"Our Galoc oil field will start production in mid June," he said.

"We have about $24 million in debt. We expect Galoc will clear that within a few months and from that point on Otto will be self-funding."

Galoc, in the SC14-C permit, was bought last year as a development and near-term production asset to provide some balance to the company's inventory, which is weighted towards high-cost offshore exploration blocks.

At Galoc, Otto acquired equivalent 2P reserves of about 4.3 million barrels at a cost of about $US9.2 per barrel, and shortly after this deal was concluded the oil price began its inexorable climb, Parks said.

In addition to Galoc, the SC14-C has permit upside 3P reserves of 41.9MMbbl and exploration upside in three additional structures, Parks said.

But Otto's other Philippines permits have much greater exploration potential. These four blocks - SC50, SC51, SC55 and SC69 - hold a range of targets, many with company-making potential, according to Parks.

"In the next two years Otto will participate in four potential company-making wells that could transform Otto into a significant mid-cap company," he said.

Otto has large equity stakes in these blocks so it can farm-out large stakes while still maintaining material positions for itself, Parks said.

SC 50 holds the Calauit oil field, an old discovery that rising oil prices have made commercial. Calauit has proven and probable (2P) reserves of 5.9MMbbl, and Parks expects the field to come onstream late next year at 12,000-15,000 barrels a day.

SC 55 is in very deep water and is elephant country. It holds the giant Marantao prospect, which Parks says could hold a multi-trillion cubic feet gas field or a billion barrel oil field.

SC 51 is somewhere in between. In moderately deep water, it offers mid-sized targets.

Otto has acquired modern3D and 2D seismic over three blocks and has reprocessed old seismic, reducing risk and adding value for prospective farminees. Parks said the company was confident it would finalise some farm-ins before the end of the year.

It will need farm-in partners as these offshore prospects are very expensive to explore and develop.

In order to balance its portfolio, the company has acquired a suite of low-risk, low-to-medium cost onshore projects in other parts of the world.

Parks said Otto was happy to let other companies develop its Turkish, Argentine and Italian projects. The company did not wish to put a lot of effort into them. It was seeking steady cashflow and news flow to balance the expensive and lumpy nature of its Philippines development pipeline.

Parks said Otto is now developing and firming up a work program for Argentina where it is aiming to drill a high-risk but low-cost and high-impact oil exploration well early next year.

In Italy, it will drill the 100 billion cubic feet target Gazzata-1 well in October.

In Turkey, the company is looking for cashflow from its gas fields in mid 2009.

Meanwhile, work goes ahead on the Philippines projects.

"Otto is strategically placed," Parks said.

"We have funding via imminent production, a strong management and experienced technical team, a highly prospective asset portfolio and an active exploration program.

"Together, with a little bit of luck and exploration success, this will translate into significant shareholder return."