Otto Energy oil sales up on Galoc; sees rise in cash flow

Otto Energy Limited, which operates the Galoc field off northwest Palawan, generated more revenue in the fiscal year ending June 2013 as it continued full operation of the Philippines’ only oil producing project.

The company expects more cash flow from the expanded Galoc operations in fiscal year 2014 (July 1, 2013 to June 30, 2014).

In its annual report, Otto said its revenue from oil sales for fiscal year 2013 rose to $60.18 million from $30.59 million in 2012.

The net profit from continuing operations before tax grew by 31 percent to $20.26 million (from $15.44 million) but capital gains taxes pulled down net profit after tax by 36 percent to $9.44 million from $14.79 million in the previous year.

“The 2012 net profit after tax was higher due to the $20.19 million gain on deemed disposal of associate upon GPC becoming a controlled entity,” Otto Energy said.

For the coming financial year, Otto Energy plans to maintain a “high level of activity.” Highlights for the coming period include the delivery of the first oil from Galoc Phase II (from two additional subsea wells) in November 2013, drilling on the “high impact” Cinco exploration well in the ultra-deepwater SC55 offshore Philippines and the completion of the acquisition of a 500-km seismic survey in Tanzania.

“The expected increased cash-flow from Galoc augurs well for Otto Energy’s capacity to capture opportunities for FY2015 and beyond and early identification of such opportunities will also be a focus in FY2014,” chair Rick Crabb said in the annual report.

CEO Egor McNab noted that Otto Energy’s balance sheet remained strong, which was a “major achievement” given the very significant investment program across the full production, development and exploration life cycle.

McNab said the company aimed to increase production, mature its exploration drilling programs and progress on exploration. “Exploration is critical to the growth of any oil and gas company, and so we have continued to drill and to restock our inventory of prospects,” he said.