Allens is advising Nido Petroleum Limited on its acquisition of Galoc Production Company WLL (GPC) from Otto Energy Limited.
GPC is the holder of Otto's 33 per cent working interest in the Galoc oil field, located in the North West Palawan Basin in the Philippines. GPC is currently the operator of the field. The transaction is subject to Otto shareholder approval.
Otto had previously announced an agreement to sell GPC to a third party. The Otto Board has unanimously recommended the Nido transaction to Otto shareholders (in the absence of a superior proposal) and terminated the agreement with the third party.
Nido will pay Otto US$108 million to acquire GPC, based on the value of GPC as at 1 July 2014. Nido intends to fund the acquisition through a combination of existing cash reserves and a revolving debt facility provided by Nido's major shareholder, Bangchak Petroleum Public Company Limited of Thailand.
Nido will assume all production rights and liabilities associated with Otto's working interest in the Galoc oil field (including abandonment costs) with effect from 1 July 2014. By acquiring GPC, Nido will increase its working interest in the Galoc oil field to 55.88 per cent and assume operatorship of the field.
Allens Partner Andrew Pascoe, who led the Allens team on the transaction, said:
'This transaction is indicative of the M&A opportunities we are seeing opening up in the current capital constrained, low oil price environment. We expect this trend to continue into 2015 with companies, like Nido, who have a strong growth strategy seeking to take advantage of acquisition opportunities, while others look to consolidate their position by divesting non-core assets.'
Andrew said that the matter once again showcased the firm's capability to assist its clients on complex and fast moving cross-border transactions.
The deal also showcased Allens' expertise in advising on oil and gas transactions in the Asia Pacific region.
Allens legal team
Andrew Pascoe – Partner, Tracey Greenaway – Partner, Matthew Ireland – Managing Associate, Alex Purtill – Senior Associate, Dominic Blaxill – Associate, Helen Dolling – Associate and Eloise Birch – Lawyer.
Notes for editors.
Allens is a commercial law firm working throughout Australia and Asia. Through its integrated alliance with Linklaters it provides clients access to 40 offices in 28 countries around the world.