Scaled down but in line with the original farm-in terms, Vital will retain a 1% working interest in SC50 (Calauit Field) by paying 2%.
In other changes to the farm-in terms, Vital will exit SC 51 & SC 55 completely, with no refund or reallocation of payments made to date. Otto will also hold Vital's voting rights within the SC 50 joint venture going forward. The original entry fee has not been reduced, however Vital will issue 4 million common shares to Otto nominally equating to the value of the remaining deal fee payments, which were scheduled for payment over the next six months.
Otto intends to complete the current Trinity seismic program across all three Filipino license areas as planned, and then seek a new farm-in partner(s) for the projects prior to commencing the exploration drilling campaign.
Otto Energy CEO Alex Parks said, "This situation creates an opportunity for Otto to use the current 2D and 3D seismic programs to add significant value to our blocks prior to negotiating a new farm-out deal pre-drilling. There has been a lot of recent interest in our acreage, and in the Philippines in general, with new entrants to the area including Exxon, JAPEX, Petronas, TAP Oil, Salamander Energy and Pearl Energy. I am confident Otto will be readily able to find one or more alternate farm-in participants for this prospective acreage while retaining advantageous terms for Otto and its shareholders."
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