Otto Energy Says Galoc Oil Field Transaction Moving Ahead
Otto Energy confirms that it is on-track with completing the recently announced acquisition of a 31.38% shareholding in Galoc Production Company W.L.L. which holds a 58.29% working interest in the Galoc Oil Field. Otto will thereby acquire an 18.28% indirect interest in the Galoc Oil Field development project in the Philippines.
As previously announced, Otto has agreed to acquire two single asset companies; Team Oil Limited and Cape Energy Philippines SA, who each own a 15.69% interest in GPC.
As a result of this transaction Otto will acquire a 31.38% shareholding in GPC, the operator of the Galoc Oil Field development project in SC14c, offshore Philippines, with a subsidiary of the Vitol Group owning the remaining stake (68.62 %). Commenting on the status of the transaction Alex Parks CEO of Otto Energy said "GPC and its main shareholder Vitol have warmly welcomed Otto to the partnership and I'm sure the working relationship will be a productive one. The Galoc development is progressing on schedule and Otto is confident in GPC as an operator. The joint venture companies are looking forward to 'first oil' around the end of the first quarter 2008."
The acquisition is scheduled for completion by December 14, 2007, with Otto shareholders to vote on the resolution to issue new shares to pay the consideration for the acquisition of Cape and Team at an AGM on 30 November 2007.
As previously advised Otto intends to fund the Galoc Oil Field acquisition by placing 226 million new shares at a price of 30c per share to raise A$67.8 million in two tranches as follows:
- 31 million Shares at 30c per share (raising A$9.3 million) have been issued under the Company's 15% capacity, pursuant to ASX Listing Rule 7.1; and
- 195 million Shares at 30c per share to raise a further A$58.5 million will be issued subject to shareholder approval at the Company's annual general meeting. A Notice of Meeting in this regard has been sent to shareholders.
Euroz Securities Ltd has underwritten the placement, with Max Capital Pty Ltd acting as corporate advisors to Otto.
After completion, Otto will have an indirect interest in Galoc through GPC, however, until formal completion of the transaction to acquire Team and Cape in December 2007, Otto is not a participant in the project and consequently will not make any ASX releases on the progress of the Galoc Oil Field, except where it relates to the progress of the transaction.
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