Oil and Gas News

Otto strengthens project pipeline with funding package

Otto Energy has secured a three-year, $US55 million ($79.6 million) debt facility with Macquarie Bank to fund its current and future developments.

The company’s asset base that will benefit from the funding agreement include Green Canyon 21 (United States), Lightning (United States) and any new discoveries arising from the remainder of its current programs.

Following an assessment of bank and non-bank debt financing options in Australia and abroad, Otto chose the funding package from a major institution that provides a competitive interest rate and terms with flexibility for expansion and repayment.

Otto’s initial commitment under the financing is $US35 million, with an additional $US20 million subject to further credit approval from Macquarie.

Managing director Matthew Allen said the financing would allow Otto to immediately progress the Green Canyon 21 development following the successful Bulleit well drilling program completed in August.

“In addition, the facility is designed to provide significant funding flexibility for further expansion from Otto’s growing portfolio of quality assets,” Allen said.

Allen said the quantum of the proposed facility and the rigorous due diligence process undertaken validated the quality of the company’s asset suite, and its ability to maintain and service appropriate debt levels.

“The funding facility is an important component in delivering on the strategic goal that Otto is working towards by the end of 2020,” Allen said.

Otto’s strategic goal is to become a producer of 5000 barrels of oil equivalent per day from its asset suite.

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