Perth-based oil and gas junior Otto Energy has announced a $US18.7 million deal to increase its stake in the Galoc oil field in the Philippines to 33 per cent.
Otto previously held a 18.78 per cent stake in the project, which is currently producing 6,800 barrels of oil each day.
Under terms of the transaction, Otto will assume 100 per cent ownership of the company currently operating the Galoc field, the Galoc Production Company, taking its stake to 59.84 per cent of the project.
Otto will then on-sell a 26.84 per cent of its interest in GPC to Singaporean energy investment firm Risco Energy, bringing its stake down to 33 per cent.
The $US18.7 million transaction is subject to Philippines government approvals.
“This acquisition represents an attractively priced, low-risk opportunity for Otto to increase its share of revenue from Galoc, as well as to better leverage the expertise within the group through assuming Operatorship,” Otto acting chief executive Matthew Allen said.
“Galoc is a proven producing asset that we know well and that complements our high potential Philippines exploration portfolio.
“The revenue from Galoc continues to provide a valuable source of funds for reinvestment and this is set to grow as we move towards a Phase 2 expansion of the project.
“We look forward to working with our joint venture partners and the Philippine Department of Energy to advance the successful Galoc project under Otto’s Operatorship.”
At 11:35AM Otto’s stock had gained 11.4 per cent, to trade at 8.8 cents.
