15/05/2008 - 09:01

Otto Energy to source $15m for drilling

15/05/2008 - 09:01

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West Perth based Otto Energy Ltd are planning to raise $15 million to fund drilling preparations, site surveys and costs associated with its two permits in Po Valley, Italy.

Otto Energy to source $15m for drilling

West Perth based Otto Energy Ltd are planning to raise $15 million to fund drilling preparations, site surveys and costs associated with its two permits in Po Valley, Italy.

Otto will issue over 38.4 million shares at 39 cents per share, in an effort to raise $15 million.

The funds will be used toward drilling preparations at the company's recently awarded Argentinean permit, while cash will also be put toward site surveys in the Philippines.

Full announcement below:

The Board of Otto Energy Limited is pleased to announce
that it has arranged a placement of 38.46 million shares to be issued at
price of $0.39 per share to raise $15.0 million.

The capital raising is being managed by Euroz Securities Limited. The
placement has been very strongly supported by institutional, professional and sophisticated clients of Euroz Securities Limited.

The placement shares are proposed to be issued in tranches as outlined
below (subject to receiving the necessary approvals):

- Otto intends to issue 14.7 million shares immediately under the Company 15% capacity limit;

- 22.95 million shares subscribed for by two of the Company's existing international investors, will be issued, subject to receiving FIRB approval; and

- 0.77 million shares are proposed to be issued to Otto's recently appointed Director, Mr John Jetter. The issue of shares to Mr Jetter is subject to shareholder approval at a general meeting of the Company. A Notice of Meeting in this regard will be sent
to shareholders shortly.

The proceeds of the placement will be used to:

- Fund drilling preparation in the recently awarded Argentinean permit;
- Fund costs associated with the Company's 50% farm-in to two permits in Po Valley, Italy;
- Undertake site surveys in the Philippines in preparation for drilling; and
- Working capital purposes in the period up to first cash flow from Galoc.

Alex Parks CEO of Otto Energy said, ""We are very pleased with the resounding support our shareholders and investors have shown. This allows us to maintain our growth momentum during the next couple of months, in the lead up to first cash flow from Galoc."

 

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