Nido Petroleum buys Otto's Galoc oil field for $108 million

Nido Petroleum buys Otto's Galoc oil field for $108 million

WEST PERTH, Australia -- Otto Energy has executed a superior sale and purchase agreement with Nido Petroleum to divest Galoc Production Company (GPC) for $108 million (A$131.09 million) on the same terms and conditions as the Risco SPA.

On Sept. 22, 2014, Otto had executed Risco SPA to divest 100% of the shares in GPC to Risco Energy for $101.4 million. GPC is the holder of Otto's 33% interest in the Galoc oil field (Galoc Interest).

Risco has waived its right to match the Nido sale and purchase agreement (Nido SPA) and the Risco SPA has been terminated.

Under the Nido SPA, Nido has agreed to pay Otto $108 million (A$131.09 million) as at Jul. 1, 2014. Nido has paid a $1 million deposit, with a further $9.8 million to be paid within 10 business days. Nido will assume all production rights and liabilities associated with the Galoc Interest (including abandonment costs) with effect from Jul. 1, 2014.

Similar to the terminated Risco transaction, completion of the Nido transaction is conditional on Otto shareholder approval. Otto will issue a notice of meeting seeking shareholder approval for the transaction, with a general meeting to be held in January 2015.

The Directors of Otto unanimously recommend the Nido transaction to Otto shareholders, in the absence of a superior proposal.