NIDO Petroleum is the new operator of the Galoc oilfield, located offshore the Philippines, after buying Otto Energy’s 33 per cent stake in the project for US$108 million.

The acquisition, through its purchase of Otto subsidiary Galoc Production Company, lifted Nido’s stake in the oilfield to 55.88%, with its production base increasing to more than 4,000 barrels of oil per day.

Risoc Energy Investments had made Otto an offer of US$101.4 million for the stake in September, but declined to match the Nido offer when asked, leading to its termination, and the refund of a US$10.14 million deposit.

Nido paid Otto a US$10.8 million deposit and will assume all production rights and liabilities associated with Otto’s 33% working interest with effect from 1 July 2014.

Nido will fund the acquisition through existing cash reserves and debt provided through Bangchak Petroleum Public Company of Thailand, which holds an 81.41% stake in Nido.

Nido managing director Philip Byrne said acquiring Otto’s stake in Galoc was a logical growth opportunity and fit neatly with Bangchak’s strategy for the company.

“Nido’s increased participating interest and appointment as operator will also put the company in a controlling position as the joint venture moves forward towards a further potential expansion of the Galoc oilfield,” he said.

In its quarterly report, Otto said the 16,300 hectare oilfield had recorded a production average of 6,703 barrels of oil per day during the quarter.

It is located in Service Contract area 14C1 in the Philippines.