AUSTRALIAN firm Nido Petroleum Ltd. has hiked its stake in the Galoc oil field following the completion of a $108-million deal with Otto Energy Ltd.
THE OFFSHORE Galoc oil field northwest of Palawan is shown in this photo available on the Web site of Otto Energy Ltd., the former operator of the service contract. — WWW.OTTOENERGY.COM
“[T]he Company has completed its acquisition of 100 per cent of the shares in Galoc Production Company WLL,” Nido told the ASX.
Galoc Production Company (GPC) owns a 33% interest in Service Contract (SC) 14C1 — located in waters northwest of Palawan — which covers the Galoc oil field.
GPC was a wholly owned subsidiary of Otto, another Australian oil and gas firm that has operations in the Philippines.
Otto, in a separate disclosure to the ASX, said it has completed the divestment from the service contract.
The transaction resulted in the increase of Nido’s stake in the contract area to 55.88% from 22.88%, Nido said.
Matthew Allen, Otto’s chief executive officer, said the closing of the sale is a significant milestone for the company, which has been weathering depressed oil prices.
“Otto has a very strong balance sheet and is well advanced on prospective exploration activities in both the Philippines and Tanzania,” Mr. Allen said.
“Pleasingly, we have the financial capacity to undertake these high impact exploration activities and to pay a significant capital return to Otto’s loyal shareholders,” he added.
Part of the funds from the sale of Otto’s stake in GPC will be utilized by the company for its SC55 exploration program and license in Tanzania.
The SC 55 consortium led by Otto just last November secured a 12-month extension — up to December this year — to drill an exploration well in the contract area offshore Palawan. Otto is looking for joint venture partners to carry out this commitment.
“The planned farm-down of Otto’s SC55 acreage together with the funding of $24.5m from BHP Billiton positions Otto favourably for the drilling of the Hawkeye-1 exploration well,” Otto said yesterday in the disclosure.
Production from the Galoc oil field averaged at 6,703 barrels of oil per day (bopd) in October to December last year versus the 7,780 bopd a quarter earlier.
The other stakeholders in SC 14C1 are Galoc Production Company No. 2 Pte. Ltd. (26.84%); Oriental Petroleum & Minerals Corp. and Linapacan Oil & Gas Power Corp. (7.79%); The Philodrill Corp. (7.21%); and Forum Energy Philippines Corp. (2.28%).
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