Otto Energy Ltd subsidiary, Otto Energy Philippines Inc. (Otto Philippines), has signed a farm-in option agreement with Pryce Gases Inc (Pryce Gases) to earn a 10% working interest in SC55, offshore the Philippines. Following this farm-in, Otto will retain a participating interest of 68.18% in SC55.
Pryce Gases Farm-in Option
Pryce Gases, a subsidiary of the Philippine Stock Exchange listed entity, Pryce Corporation (PSE: PPC), has agreed to a farm-in option to SC55 to earn a 10% working interest by participating in the drilling of the Hawkeye-1 exploration well. Key terms of the farm-in option agreement are outlined in Appendix 1.
This farm-in option, along with the US$24.5 million funding committed by BHP Billiton and the Red Emperor Resources NL farm-in announced in March 2015 for a 15% working interest, ensures that Otto is fully funded for the drilling of Hawkeye-1, which is estimated to cost between US$30-35 million.