By Leslie D. Venzon
MANILA, Dec. 12 (PNA) – Nido Petroleum has offered USD 108 million cash for Otto Energy’s 33 percent working interest in the Galoc oil field in Northwest Palawan Basin.
”Nido Petroleum Limited and Otto Energy Limited are pleased to announce that the companies have executed a Sale and Purchase Agreement (SPA) whereby Nido will acquire 100 percent of the shares in Galoc Production Company WLL (GPC), the holder of Otto’s 33 percent working interest in the Galoc oil field,” Nido Petroleum Limited said in a disclosure with the Australian Stock Exchange Friday.
Nido said the amount was recommended by Otto Energy’s board, higher than the previous SPA signed with Risco Energy Investments last Sept 22, which amounted to USD 101.4 million.
Based on the deal, Nido will provide an initial deposit of USD 10.8 million, 10 percent of USD 108 million.
Last July 1, Nido Petroleum has already paid USD 1 million, while another USD 9.8 million was scheduled to be paid within 10 days, according to Otto Energy’s disclosure at the Australian bourse.
With the completion of the USD 10.8 million payment, Nido had assumed all production rights and liabilities, completely absorbing Otto Energy’s 33 percent working interest share.
It has increased Nido’s share in the Galoc Field to 55.88 percent, enabling it to become SC 14’s operator.
Consequently, it has added to Nido’s production base, soaring to more than 4,000 barrels of oil per day.
However, the completion of the transaction is still dependent on the decision of Otto’s stockholders.
Another aspect of the deal to be decided by shareholders is whether there will be a loan security package, over the company’s account for receipts from the Galoc production. It will be voted upon the incoming Annual General Meeting in 2015.
Nido’s current cash reserves and debt facility, through Thailand listed — Bangchak Petroleum Public Company Limited of Thailand — will pay for the transaction. It owns 81.41 percent of Nido.
Nido said the loan will reach USD 120 million, to be paid with an initial annual interest rate of 6 percent plus LIBOR.
In a separate disclosure, Otto Energy said Risco Energy Investments will not match Nido Petroleum’s present offer.
Based on Otto Energy’s production and financial summary, For the 3rd Quarter of 2014, Galoc yielded 715,783 oil barrels (bbl)and a net production of 236,208 barrels in the 3rd Quarter this year. SC 14C has an average production of 7,780 barrels per day.
Revenues for Service Contract 14-C was noted to increase by 2.57 percent from March 2014’s USD 21.676 million to USD 22.232 million in September.
Otto Energy is an oil and gas company listed in the Australian Stock Exchange, engaged in exploration, development and production. It has projects in the Philippines and Tanzania.
Further, Bangchak Petroleum is involved with refining, marketing and selling of petroleum products in Thailand.
Meanwhile, Australia-listed Nido Petroleum, is a South East Asian oil and gas exploration and production company. (PNA)