Australia's Otto Energy raises stake in Galoc Production to 100%

Australia-based Otto Energy Ltd. gained 100 percent control of Galoc Production Co. (GPC), operator of the northwest Palawan Galoc oil field, for $18.7 million. In turn Otto will have a 33-percent stake in Service Contract 14C, which involves other oil and gas exploration companies. Otto Energy announced its acquisition of GPC Friday in a disclosure to the Australian Securities Exchange. It increased its share in GPC from 31.38 percent to full ownership via a buyout of the Vitol Group’s 68.62 percent equity. “This acquisition represents an attractively priced, low-risk opportunity for Otto to increase its share of revenue from Galoc," Otto acting CEO Matthew Allen said in his report to the ASX. The energy firm will use part of its cash reserves to fund the acquisition. Completion of the purchase agreement is expected to happen before Sept. 30. While Otto’s stake in the Galoc field contract stands at 59.84 percent, this state of affairs will be temporary because Otto said it will sell 26.84 percent of the Galoc contract to Singapore’s Risco Energy Pte Ltd. The Australian energy explorer did not say when it will pass on a part of its stake to Risco. “Recent performance at Galoc has been encouraging with current production at approximately 6,800 barrels per day. The field has delivered 23 offtakes to refinery customers to date… has had an average operating uptime of 100 percent over the past four months," Otto also said in its disclosure. Galoc production royalties remitted to the National Treasury since June 2009 amounted to at least P976 million, according to the Department of Energy. — ELR/VS, GMA News