Otto Energy Ltd., Perth, has agreed to sell its interest in the Galoc oil field in service contract (SC) 14C1 offshore Palawan basin in the Philippines to Singapore-based Risco Energy for $101.4 million.
Risco has paid a $10.14 million deposit and has assumed all production rights and liabilities backdated to July 1.
Otto says it will divest 100% of its shares in the Galoc Production Co., the entity that holds 33% interest in the field.
The deal will require shareholder approval at a meeting timed for later this year, said Chief Executive Officer Matthew Allen.
Proceeds of the sale will help fund Otto’s exploration program for the next 2 years as well as pay a proposed capital return of 6¢/share to shareholders. The company is looking to expand its existing position onshore Tanzania as well as focus on its service contract 55 offshore Philippines.
The deal comes on the heels of Thai oil refiner Banchak Petroleum’s buyout of another Galoc interest holder, Nido Petroleum Ltd., Perth, for $113 million (Aus.) cash earlier this month.
Galoc field was discovered in 1981 and is producing about 8,000 b/d of oil following completion of a Phase 2 development plan last year. It has an expected production life out to 2020.