- Otto Energy (OEL) has reached an agreement on the sale of its subsidiary Borealis Alaska and Alaskan assets to Pantheon Resources
- In exchange for its subsidiary, Otto will receive 14.3 million shares in London Stock Exchange-listed Pantheon, valued at US$8.02 million (A$10.4 million)
- Following the transaction Pantheon will hold the entire working interest in the Talitha Unit in Alaska, enabling it to progress exploration and development more efficiently
- On the other hand, by shedding its Alaskan assets Otto will be better able to focus on its assets in the Gulf of Mexico while retaining an interest in Alaska through its new shareholding in Pantheon
- The sale is still subject to approval from the Alaskan Department of Natural Resources
- OEL shares have been trading flat at 1.1 cents
Otto Energy (OEL) has reached an agreement on the sale of its subsidiary Borealis Alaska, and its Alaskan assets, to Pantheon Resources.
In exchange for its subsidiary, Otto will receive 14,272,592 shares in London Stock Exchange-listed Pantheon, valued at US$8.02 million (A$10.4 million).
At present, Borealis holds a 10.8 per cent interest in the Talitha Unit in Alaska which covers nearly 44,500 acres. Talitha is operated by Pantheon and earlier this month, the company spudded the Talitha #A well.
Following the transaction, Pantheon will hold the entire working interest in the Talitha Unit, enabling it to progress exploration and development more efficiently.
Otto will, however, retain 0.5 per cent of 8/8ths overriding royalty interest in any future production from the unit. The oil and gas explorer and producer will also retain exposure to Alaska via its new shareholding in Pantheon.
Otto Executive Chairman Mike Utsler said the sale of the company’s working interest in the asset provides an opportunity for Otto to participate in Panthoen’s broader Alaskan portfolio.
“We would like to congratulate Pantheon on the successful advancement of the Talitha Unit and wish them success with the Talitha #A well and with their other Alaskan projects. We look forward to being a Pantheon Resources shareholder,” he added.
The divestment will also allow the North America-focused oil and gas company to concentrate on its core assets in the Gulf of Mexico.
The sale is still subject to approval from the Alaskan Department of Natural Resources.
Shares have been trading flat at 1.1 cents at 2:37 pm AEDT.