Otto Energy said that commerciality has been declared at the Galoc oil field, offshore Philippines, as it has achieved debt-free status.
Under the terms agreed with the Philippine Department of Energy for the Galoc project, Galoc Production Company (GPC) on behalf of the Galoc joint venture has issued a formal declaration of commerciality following the completion of the extended testing period.
In 2007, when Otto Energy acquired its interest in GPC, it inherited a share of project finance debt facility already in place to fund the GPC portion of the development costs of the Galoc project.
Primarily via receipt of production revenues, GPC has serviced the debt repayments, and Otto Energy’s share of the debt (both non-recourse and recourse portions) is now fully repaid.
The data obtained during the extended test phase proved invaluable in providing sufficient confidence of the reservoir performance to justify the commencement of long-term production.
Otto Energy now expects to receive regular dividend payments from GPC from production net proceeds.