Granby announced on October 29 the sale of its 9.14% indirect interest in the Galoc oil field, offshore Philippines, to Otto Energy Ltd. The total cash consideration payable to Granby is USD$25.5 million, comprising US$16.66 million payable at Completion, repayment of existing Shareholder Loan amounts to GPC of approximately US$2.59 million, and repayment of the approximately US$6.3 million deposit held in escrow with Banca Intesa as security for the project financing. In addition, Otto will issue to Granby one million shares in Otto (to be held in escrow for a period of 12 months) and four million options at an exercise price of 34 cents per share (to be held in escrow for a period of 12 months) and which lapse if not exercised within 24 months from their issue.
At the completion of the transaction Granby is expected to have approximately £15 million of cash available to fund further growth of the business.
David Grassick, Managing Director of Granby Oil and Gas, said:
"The successful sale of Galoc, which Granby was instrumental in transforming from a formerly stranded discovery into a commercial development that is currently drilling, very clearly demonstrates our ability to create value for shareholders through the integration of our technical, commercial and financial skills.
Granby has an active drilling program spanning exploration, appraisal and development with three wells currently drilling, and is preparing for at least three more wells in 2008. Following the sale of Granby's interest in the Galoc field, Granby is well positioned to pursue its strategy to acquire other appraisal and development opportunities in the North Sea, onshore Europe and in other areas of interest."
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