Otto Energy Ltd has announced that the sale of Galoc Production Company W.L.L. to Nido Petroleum has been completed.
Final proceeds were received from Nido on 17 February 2015.
The final proceeds from Nido reflect adjustments from the effective date of the transaction, being 1 July 2014.
The Board of Otto intends to increase the proposed capital return to shareholders to AUS$0.064 per share (previously A$0.06 per share), which would utilise AUS$73.9 million of Otto’s cash reserves.
Otto is seeking a class ruling from the ATO to confirm the taxation treatment of the proposed capital return.
Following receipt of the ATO ruling, the Board of Otto will meet to make a final decision on the proposed capital return.
The proposed capital return will then be considered at a shareholder meeting and, if approved, funds will then be returned to shareholders.
An indicative timetable for the capital return will be issued following the receipt of the ATO ruling and final decision by the Board.
Otto will utilise cash reserves remaining after payment of the proposed capital return to undertake the forward exploration programs at SC55 in the Philippines, and two licences onshore Tanzania. The planned farm-down of Otto’s SC55 acreage together with the funding of US$24.5 million from BHP Billiton positions Otto favourably for the drilling of the Hawkeye-1 exploration well.
Matthew Allen, Otto’s CEO said: “Delivering financial close of the GPC sale is a significant milestone for Otto in this environment of depressed oil prices. Otto has a very strong balance sheet and is well advanced on prospective exploration activities in both the Philippines and Tanzania. Pleasingly, we have the financial capacity to undertake these high impact exploration activities and to pay a significant capital return to Otto’s loyal shareholders.”
Adapted from press release by Joe Green