Otto Energy takes full control of Galoc
Australian firm Otto Energy Ltd. has acquired the entire stake of its partner in Galoc Production Co. WLL (GPC), allowing it to gain full ownership of the company that operates the Galoc oil field off Palawan.
In a regulatory filing, Otto Energy said it had acquired the 68.62- percent stake of the Vitol Group in GPC.
GPC, operator of the Galoc oil field, meanwhile holds a 59.84-percent interest in Service Contract 14C.
Prior to the acquisition, Otto Energy only had a 31.38-percent direct interest in GPC and an 18.78 indirect interest in SC 14C.
Otto Energy’s direct interest in the SC 14 license would have gone up to 59.84 percent since it already assumed full ownership of GPC. However, a portion of this stake, 26.84 percent, was sold to Singapore energy investment company Risco Energy Pte Ltd.
After all the acquisitions, Otto Energy now owns a 33-percent direct interest in SC 14C; Risco Energy holds 26.84 percent; Nido Petroleum Ltd., 22.88 percent; Oriental Petroleum and Minerals Corp. and Linapacan Oil Gas and Power Corp., 7.79 percent; The Philodrill Corp., 7.21 percent; and Forum Energy Philippines Corp., 2.28 percent.
These transactions are still subject to relevant Philippines government approvals.
“This acquisition represents an attractively priced, low-risk opportunity for Otto to increase its share of revenue from Galoc, as well as to better leverage the expertise within the group through assuming operatorship,” said Otto Energy acting chief executive officer Matthew Allen.
“Galoc is a proven producing asset that we know well and that complements our high potential Philippine exploration portfolio. The revenue from Galoc continues to provide a valuable source of funds for reinvestment and this is set to grow as we move towards a Phase 2 expansion of the project,” Allen explained.
Otto Energy noted that becoming the new operator of the field was a crucial step in its development from an exploration to an integrated oil and gas company.
The acquisition will also realize cost synergies as Otto moves to consolidate the operating office of GPC in Manila with its Perth office.
