Otto raises $20m

Otto Energy has tapped investors for $20 million, with the proceeds set to be spent on drilling programs across the company’s projects.

The capital raising comprises a $10 million placement, a retail entitlement offer worth $7 million, and a $3 million institutional entitlement offer.

Under the placement, Otto has issued 169.5 million shares at 5.9 cents each, while 51.6 million shares were issued under the institutional offer and 118.5 million shares for the retail offer.

Morgans Financial is acting as lead manager and underwriter to the entitlement offer, Adelaide Equity Partners as financial adviser and Allens acting as legal adviser.

Managing director Matthew Allen said the funds would be used on the company’s exploration program over the next 18 months, including the Gulf Coast package, Bivouac Peak and Alaska.

“The support of our existing institutional shareholders is very pleasing and is an endorsement of Otto’s strategy in the Gulf of Mexico,” he said.

“I would also like to welcome the new institutions on to our register and look forward to a rewarding 18 months drilling the Hilcorp portfolio, Bivouac Peak and Alaska.”

On Monday, Otto announced that it had entered into a joint venture with Hilcorp Energy which will see it earn a 37.5 per cent interest in an eight well portfolio of prospects in the Onshore/Near Shore USA Gulf Coast (Gulf of Mexico).

Shares in Otto were up 3.12 per cent at 6.6 cents each.