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Otto Energy placed to raise $2.2m

WEST Perth-based mining company, Otto Energy Ltd, will raise $2.25 million through a placement to UK and Asian investors to fund the construction of a new rig for its Calauit oil field in the Philippines. The placement will consist of 15 million shares with 7.5 million attaching 20-cent listed options, and will facilitate the first payment of a bare boat charter, with the rig due to be completed by October 2007. The company has also revised its farm-in arrangements with Vital Resources Corporation, the successor to Canada-based Bentley Oil International Ltd, giving Vital a 35 per cent interest in the oilfield and 30 per cent of two additional exploration licences. In return, Vital will pay approximately $16 million of the estimated $26 million needed to get Calauit on production. Vital will also be required to pay for the initial seismic surveys and 42.5 per cent of the first well in both additional licences, as well as paying an entry fee of $1 million in four equal instalments to participate in Calauit. Vital, as Bentley, acquired a 30 per cent interest in the oilfields in July for $12.5 million.

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