Otto Energy Ltd. may complete its divestment from the Galoc oil field offshore Palawan early next year, according to its disclosure to the Australian Securities Exchange (ASX).
The Australian oil and gas company is set to sell its entire interest in Galoc Production Company WLL (GPC) to Nido Petroleum Ltd. under a $108-million deal.
GPC owns a 33% interest in the Service Contract (SC) 14 — located in waters northwest of Palawan — which covers the Galoc oil field.
In its report to the ASX, Otto said “completion of the Nido transaction is conditional on Otto shareholder approval.”
The company said a general meeting intended for the matter will be held in January next year.
Otto’s disclosure comes a week after Nido announced a cash offer for the Galoc shares.
Nido had said it intends to fund the acquisition through a combination of existing cash reserves and debt.
Otto last September executed a $101.4-millon deal with Risco Energy Investments Pte. Ltd. that was supposedly for the sale of its interest in GPC.
However, Nido’s proposal was superior.
Otto said Risco waived its right to match Nido’s offer, hence, the earlier deal was terminated.
“The directors of Otto unanimously recommend the Nido transaction to Otto shareholders, in the absence of superior proposal,” Otto had said.
Apart from its stake in SC 14, Otto also holds interests in two other exploration projects in the Philippines. These are SC 55 in waters west of Palawan, where it has a 33.18% stake, and SC 73 offshore Mindoro island, a contract it owns 100%.