Nido Petroleum has made an offer to acquire Otto Energy‘s 33% working interest in the Galoc oil field in the Philippines for $108m.

Galoc Production Company WLL holds the Otto’s interest in the Galoc oil field, which is situated 60km north-west of Palawan under the Philippines Department of Energy (DOE) service contract 14C1.

The oil field was discovered in 1981 and production started in October 2008.

The water depth ranges between 290m and 400m at the Galoc field with oil located in a turbidite sandstone reservoir at depth of approximately 2,100m below the sea surface.

"Nido’s increased participating interest and appointment as operator will put the company in a controlling position as the joint venture moves forward towards a further potential expansion of the Galoc oil field."

Nido plans to fund the acquisition via a combination of existing cash reserves and debt.

The company’s major shareholder, Bangchak Petroleum has committed to provide a revolving debt facility of $120m.

Nido’s stake in the Galoc oil field will increase to 55.88% if its offer is successful. The company will also assume operatorship of the project.

The transaction will increase Nido’s production base to more than 4,000 barrels of oil per day.

Nido Petroleum managing director Philip Byrne said: "Acquiring Otto’s stake in Galoc is a logical growth opportunity for Nido and one that fits neatly with the strategy Bangchak communicated upon taking majority ownership of the company earlier this year.

"Nido’s increased participating interest and appointment as operator will also put the company in a controlling position as the joint venture moves forward towards a further potential expansion of the Galoc oil field."

Nido owns a 22.88% working interest in the Galoc oil field and also holds significant acreage in the north west Palawan, the Penyu and west Natuna basins in Indonesia.

Energy