Otto Regains Working Interest in Three Philippines Service Contracts
Otto Energy Limited (ASX: OEL) has regained working interest in Philippines Service Contracts SC50, SC51 & SC55, through negotiation with current joint venture participant Vital Resources Corp. Otto's working interest will now revert to 99% in SC50, 80% in SC51, and 85% in SC55.
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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Company: Vital Resources Corp. more info
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