NIDO Petroleum will buy Otto Energy’s 33 per cent stake in the Galoc oilfield, in the Philippines, for US$108 million, after a rival for the stake declined to match the bid.

The acquisition will see Nido wholly acquire Otto’s Galoc Production Company, which holds the stake, in an offer unanimously recommended by the Otto board.

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

Nido paid Otto a UD$10.8 million deposit and will assume all production rights and liabilities associated with Otto’s 33 per cent 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 81.41% of Nido.

Nido said its interest in the Galoc oilfield would increase to 55.88% if the offer were accepted, with its production base increasing to more than 4,000 barrels of oil per day.

The company would also become operator of the project.

Nido’s managing director Philip Byrne said acquiring Otto’s stake in Galoc was a logical growth opportunity for Nido 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.

Completion of the SPA transaction is conditional on Otto shareholder approval.